An international team of authors with a diverse set of experiences and insights has produced a seminal report on blockchain/Digital Ledger Technology (DLT) for policymakers, Navigating Blockchain and Climate Action
The main benefits of blockchain technology are rooted in three main characteristics:
- Data records on a blockchain are immutable through a permanent ledger for increased transparency.
- Blockchain technology brings trust to peer-to-peer transactions – particularly important in the context of weak regulatory settings or under decentralised governance.
- Smart contracts – applications that can automatically execute the terms specified in a contract on a blockchain – increase efficiency and reduce transaction costs.
Building on a comprehensive analysis of the needs of the Paris Agreement, the authors identify three main areas where blockchain has the most potential to accelerate climate action:
- NEXT-GENERATION REGISTRIES AND TRACKING SYSTEMS: The decentralised nature of the Paris Agreement and its governance structure requires new approaches to registries and tracking systems to handle heterogeneous rulesets for accounting and reporting and to allow for trusted, networked carbon markets.
- DIGITISING MEASURING, REPORTING AND VERIFICATION (MRV): Digital technologies can unlock new, more accurate ways to measure, report and verify climate outcomes at lower transaction costs but with increased transparency. Smart contracts to enable automated issuance, transfer and payment of climate outcomes.
- DECENTRALISED ACCESS TO CLEAN ENERGY AND FINANCE: Individuals are empowered to produce and store their own renewable energy and trade with their neighbours. Blockchain technology combined with new fingerprint, iris or face recognition technology allow individuals who lack identity documents or bank account to access climate finance.
KEY FINDINGS FOR POLICY MAKERS
This report is a knowledge product of the Climate Ledger Initiative (CLI) published on an annual basis to track progress according to latest research and use cases – supporting CLI’s role as an international knowledge platform to accelerate climate action through blockchain based innovations. This report was published on 04 December 2018. For more information, please visit: climateledger.org
