Web3.0 and sustainability: Green blockchain solutions – Digital Transformation

By Ravi Chamria

In a little over a decade, blockchain has shed its initial image as a power-intensive technology and is now playing a pivotal role in sustainability initiatives. The journey has seen significant shifts, from altering consensus protocols and hardware needs to setting a goal of achieving net zero emissions by 2030.  But the narrative is no longer confined to merely greening the blockchain. Instead, the spotlight is on harnessing the unique capabilities of it to craft robust solutions that will help build society’s much-needed sustainable infrastructure.

Blockchain Paves the Way for the most Sought-After Sustainable Energy Solutions

Firstly, let’s consider the transformation possible in energy distribution. What we mean is, channeling the energy produced now in a transparent and cost-effective manner. Think about it: Retailers barely own any of the grid infrastructure, their forte is managing services like billing and metering usage. Here’s where blockchain sneaks in, elbowing out the middleman and connecting users straight to the grid. We’re staring at a future where electricity comes at wholesale prices, slashing those hefty utility bills.

The average power loss during transmission from traditional power plants to your home can range from 8% to 15%. This is where microgrids come into play – these localized systems generate power right where it’s consumed, often leveraging renewables like solar and wind. Blockchain can elevate this setup, enabling peer-to-peer networks that allow you to sell your excess energy directly to the grid. Picture your surplus energy being tokenized, transformed into ‘energy tokens’, easily traded or converted back. 

Incentivizing clean energy is crucial for commercial viability too. While governments traditionally use subsidies and tax breaks, blockchain can incentivize at the consumer level. For instance, companies could reward customers with energy tokens for choosing clean energy.

Apart from better distribution, blockchain could be useful in offsetting the carbon footprints and its tracking. Today, we see companies hiding behind ambiguous metrics while boasting about sustainability. Blockchain can cut through this noise. With smart contracts, we’re looking at automating the carbon tracking process, making it public, and irrefutable. And using Zero-Knowledge Proofs, companies can prove they’re sticking to standards without revealing identities. 

Add the power of oracles to this and it unlocks a myriad of new use cases in clean energy: tokenized cash flows, trusted rating systems for green bonds,  automated energy conversion contracts, carbon credit systems derived from measurable carbon sequestration and many more. All these could help us meet the mission-critical sustainability goals of 21st century.

Projects including KlimaDAO and Toucan deliver tokenization of carbon credits, bringing about important discussion on the future of carbon markets and if and how they should be using blockchain technology.

Blockchain’s role in helping the environment can go far beyond the above though

Let’s cast our nets a bit wider and imagine a 2023 burgeoning with sustainability-focused systems. 

Let’s visualize a typical waste management scenario. It’s a linear journey: waste is produced, collected, transported, and finally disposed of. Accountability? Very low. And therein lies the problem – a system ripe for mismanagement and fraud. Blockchain could improve this by assigning a digital ‘tag’ to each item or batch of waste. From the moment it’s tossed into a bin to its final destination at a recycling plant, every step is recorded on an immutable ledger.

For instance, the recovered plastic from oceans can be verified with precise data, such as weight, GPS coordinates, and timestamps, all recorded on-chain. This eliminates ambiguity and greenwashing concerns.

It’s not just about tracking only. Imagine communities actively participating in waste collection, incentivized by a reward system of redeemable digital tokens. We’re talking about tokenizing waste. This turns your recyclables into something of value!

Better results we can get for water supplies and management also. Integrating blockchain with IoT can impact how we monitor and manage water resources. By employing a network of sensors to observe and report on metrics like water levels and quality, blockchain can assure that every drop is accounted for and used responsibly.

And yes, these are just a couple of instances. The scope is vast. From producers to regulators, everyone could be held to account, ensuring transparency and compliance. If we want to appeal to a much larger audience, we must focus on ESG initiatives. By knitting together these threads,…