Newly evolving technologies, such as blockchain technology, have the potential to accelerate global action towards the Paris Agreement agenda and the Sustainable Development Goals. This is the premise under which the UNEP DTU Partnership outlines a number of potential applications for blockchain technology in the climate space, and sets the stage for the partnerships future involvement in the research area.
Blockchain can address challenges
The rapid development of the blockchain technologies makes it nearly impossible for strategic decision-makers to fully comprehend the alternatives that the technologies can offer, let alone the costs and benefits associated with using them.
Key features of blockchain technology, such as an immutable audit trail of transactions, cheap and borderless transfer of values, and automated execution of contracts, can help address challenges to climate action implementation.
More specifically, this technology can act as a transparency mechanism that incentivizes emission reductions in carbon markets, and can provide a decentralized infrastructure enabling new applications in carbon transparency and markets, climate finance, and clean energy generation.
UNEP DTU Partnership work relating to blockchain aims to identify and analyse concrete use cases within the Paris Agreement agenda and the Sustainable Development Goals arena.
Scientific models are needed to critically analyse whether a blockchain is indeed the appropriate technical solution for a particular application scenario and then guide the selection process towards a specific technology. This where the expertise of UNEP DTU Partnership comes in.
Use cases needed
If the world is to reach the goals set forth in both the Paris Agreement and the Sustainable Development Goals, we need to enable greater ambition, and climate actions need to be accelerated.
For this to happen a number of present challenges need to be addressed; blockchain technology can provide some of the many needed solutions:
- Carbon markets:
Blockchain technology could potentially be applied to both, the certification of mitigation outcomes (tracking all relevant information, such as origin, timestamp, methodology applied, verifier), as well as provide a platform for trading these outcomes. Blockchain based trading could reduce transaction costs and increase speed, while also providing robust accounting.
Combining longstanding UNEP DTU Partnership expertise on climate transparency and carbon markets with new research in blockchain application offers great potential.
- Climate finance:
Blockchain can facilitate and enable climate-smart investments. Automated micropayments and an enhanced traceability of financial flows facilitates results-based finance and enhances trust between actors.
Research could be based on lessons learned from past UNEP DTU Partnership projects like the ADMIRE and FIRM (LINK) projects to define the diverse barriers linked to climate finance.
- Clean energy:
Blockchain can establish decentralized energy systems through enabling peer-to-peer energy transactions resulting in better energy prices for both consumers and producers.
Building this research on existing UNEP DTU Partnership projects like the Technology Needs Assessment project, or on the expertise of the Copenhagen Centre on Energy Efficiency and the global energy efficiency hub of Sustainable Energy for All provides a one-of-kind base for research into blockchain use case application.
As an internationally leading provider of research-based advisory on climate and energy action, UNEP DTU Partnership is uniquely positioned to analyse blockchain use cases that strengthen climate action, particularly in developing countries.
Building on the partnerships’ current competence areas and country engagements, the partnership will focus on the assessment of specific climate and development projects to evaluate if the application of a blockchain solution is beneficial.