For the record
Dorry Price discusses how blockchain could help the UK transition to a low-carbon economy
Blockchain is among the most hyped technologies in recent memory. With climate change on the agenda of many governments and businesses, can it help to decarbonise the way we live and work?Blockchain employs shared databases, sometimes referred to as 'distributed ledgers', to record and verify information in a decentralised manner. Data is recorded in a shared database by a network of devices – or 'nodes' – that independently timestamp the data and verify that it matches data placed by other nodes. Once these nodes are aligned, the data is recorded in the database – a new 'block' is added to the 'chain'.
The technology allows transactions between different parties to be conducted safely and reliably, without intermediary agents. Importantly, it exhibits:
- Immutability: data is permanently recorded and no data can be altered without creating a new block
- Reliability: transactions are completed through a decentralised verification mechanism, allowing peer-to-peer transactions to be safe and reliable without the need for intermediary agents
- Efficiency: transactions only complete when necessary conditions are verified as having been met (for example, that the seller of an asset actually owns the asset), which prevents errors and reduces costs.
Blockchain has already been used in sustainability-related applications (as in a tool for embedding component traceability in textile supply chains), and with attention turning to accelerating the UK's transition to a low-carbon economy, there are opportunities for blockchain to be used in the following ways:
- Improving information on emission reductions. International climate change action relies on countries upholding their commitment to meet emission reduction targets, such as those mandated by the Paris Agreement. With blockchain, each country's progress against those targets can be maintained, verified and made accessible to the public. The reliability and transparency of such information could help to hold governments more accountable for their commitments.
- Streamlining renewable energy trading. Blockchain is being used in small-scale renewable energy grids to manage data on energy production and battery storage capabilities in real-time. This makes the grid more efficient and flexible, and should lower the cost of supplying renewable energy. LO3 in New York and Verve in London are two start-ups putting this technology into practice. Electronic 'smart' contracts can also use it to facilitate instant pricing and trading in response to supply and demand fluctuations.
- Improving the accounting and reporting of greenhouse gas emissions. Emissions accounting typically involves manual data collection, processing and verification – particularly for projects in remote locations. Blockchain could ensure that carbon footprints are more accurately calculated by recording information in real-time, avoiding double counting and enabling tamper-proof data transfers. It can also track embodied carbon emissions in large-scale infrastructure projects, transferring records through construction, operational and decommissioning phases. This could increase the reputability and transparency of these projects and reduce project costs.
- While blockchain's applications could be game-changing, the technology is still in its infancy. Large-scale applications are still at pilot stage, and more examples of success are required before many businesses and governments will be ready to commit. However, if blockchain continues to gain traction, it could be an exciting example of how technology can accelerate the low-carbon transition.
Dorry Price is a sustainability consultant at WSP and sits on the IEMA Futures Steering Group.
Photo Credit | iStock