Blockchain can be a powerful tool for transforming green finance, knowing that transparency and traceable information are key to measuring and monitoring climate impact …
The benefits of blockchain for green finance
Financing the transition to a low-carbon future could find new momentum thanks to the blockchain. In fact, the technology uses a database capable of keeping a complete record of any transaction that has taken place within a network. It can be useful in a number of areas, including maintaining a land register, medical records, but also green finance. To this end, it can help improve the carbon emissions market, clean energy distribution, climate finance flows, greenhouse gas emissions monitoring and reporting … In addition, revenues generated by various blockchain projects they can be used for various charitable causes. The Philcoin platform is an example of this, allowing you to generate passive income streams, but also to donate accumulated funds to various NGOs, in compliance with the 17 United Nations Sustainable Development Goals. There are other initiatives such as SolarCoin which offers tokens to people who install solar energy.
The “NFT” plantation model.
Tokenization of trees, as part of a regenerative finance program, can help decarbonise the atmosphere. Smart Forest, a Polish startup, is an example of investing in forests using the power of the blockchain. The company offers entrance fees starting at € 40 to subscribe to a plantation through the acquisition of an NFT. On its plantations in Romania, where the land is more accessible, Smart Forest cultivates paulownia. According to the company, one hectare of planting of this variety can save “up to 30 hectares of natural forest” thanks to its high productivity. Veritree, a Canadian company operating on the same blockchain reforestation model, aims to plant 1 billion trees by 2030. It uses technology that can monitor, verify and track plantations. This company has partnered with many companies, including the Korean multinational Samsung.
Improve the traceability of wood
Illegal logging and the “under the radar” timber trade are a problem for the authorities, who cannot monitor everything. Governments suffer in terms of lost revenue and damage to the environment. With its improved security and data traceability, blockchain can help certify supply chains for timber and other natural resources. Not to mention it can facilitate real-time timber tracking and traceability.
Tokenized “carbon credits”
Large companies find in the purchase of carbon credits, the way to achieve carbon neutrality by offsetting their CO2 emissions, a real devastation of modern times. Indeed, this practice can encounter several pitfalls, including duplication with different organizations often claiming credit for the same project. By moving these credits to the blockchain, regenerative finance projects hope to make transactions more transparent with irrefutable evidence released to investors, suppliers and regulators. This is the case with Moss.earth, a Brazil-based climate technology that aims to persuade landowners to grow trees rather than crops or livestock, by luring carbon credits. These credits are a way to make your forest land expensive. Single.Earth follows the same logic by offering tokens to encourage landowners to keep trees on their land rather than razing them for the benefit of agriculture. Specifically, the landowners put their properties on the Single.Earth platform and the company sends biologists to assess the ecological value of the plantation. Once certified, investors buy them, obtaining carbon credits in the form of tokens in exchange. In France, as Les Échos recently pointed out, the Château de Chambord is looking for a partner to enhance its vast forest by selling CO2 credits …
Still limits …
Emitting carbon credits on the blockchain can raise other environmental problems, as mining cryptocurrencies can consume significant amounts of energy. Additionally, blockchain isn’t necessarily the silver bullet for green planning given the volatility and instability of cryptocurrencies. If prices continue to fluctuate as much as some crypto assets, planning and sustainability becomes difficult … Continue!