Distributed ledger technologies cannot solve the climate change, but they can significantly contribute to meeting climate goals. Digital Asset Live Editor-in-Chief talked to Dr Martin Wainstein and Tom Baumann, co-chairs of the Hyperledger Climate Action & Accounting Special Interest Group.
Q1: Climate change is perhaps the main threat to the very existence of mankind. What do you think possible to do here with distributed technologies?
A1: Allow for a transparent mechanism that can keep all actors accountable for their climate pledges, from countries and their NDCs (Nationally Determined Contributions), to companies and subnational governments. In turn, to keep a trusted accounting system that can show how pledges are being met, but also to link climate value creation with financial opportunities.
Q2: At the Davos Forum, you have declared the establishment of a working group to help meet climate goals. How will this group function?
A2: Hyperledger is an open source community hosted by the Linux Foundation, so this group will function using the methods and best practices of any open source community. That means that anyone anywhere is welcome to get involved and contribute using the tools that have been provided for the group. There will be regular open calls, a mailing list people can subscribe to and a chat channel. If people are curious and just want to listen in, that’s great. But if people want to step up and do more, that’s great too — we welcome contributions of all types. Based on what we’ve seen from other Special Interest Groups focused on other industries such as healthcare and telecommunications, contributions could involve coding a proof of concept, writing a paper to describe how blockchain can solve problems that industries are facing, presenting about work they’ve done that others can learn from to help accelerate the adoption of this new technology and more.
The Hyperledger SIG will also liaise with related DLTs outside of Hyperledger and as many other climate initiatives as possible.
Q3: Who do you want to see as members to this group?
A3: The UN Principles for Digital Development provide important guidance on this point. Membership will not be limited to Hyperledger experts. Members should include both developers, users and researchers interested in the technological application and actors that are actively engaged in climate accounting (countries, subnational governments and companies) and understand the need for unified open standards and protocols for doing so. In essence, this SIG is open to a broad range of members.
Q4: Will the group develop recommendations to policy makers? Do you envisage concrete projects as outcome of the group’s work?
A4: The SIG will provide information to policymakers about the high level state and relevance of the technology. Direct recommendations to policymakers are expected to be done by specific task groups within the SIG as well as incubated climate projects within the HL ecosystem. An example of such a project that expects to provide recommendations to policymakers is the Open Climate project, currently hosted at Yale University.
Q5: Obviously, blockchain cannot solve the climate problem. What other technologies have to be employed, in your view?
A5: Blockchain and distributed ledger technologies bring features that are key enablers of climate change solutions. Trust, accountability and transparency are at the core of what Hyperledger platforms do and those three things are critical to establishing a way to track and reduce carbon emissions. Is a country meeting their reduction pledge? Is there a way to verify that using data that can be trusted? Can we verify that this data hasn’t been tampered with or altered? Hyperledger platforms lets us answer those questions. Technologies such as IOT and AI will compound the value of blockchain by providing further automation, and low-cost 3rd party (digital) verification of on-the-ground actions. The combination of IoT+AI+DLT is directly relevant for the digital transformation of what in climate jargon is called ‘MRV,’ the Monitoring, Reporting, and Verification of climate actions.
Q6: What was the response to your announcement so far by Hyperledger members? What was the immediate reaction at Davos?
A6: There was a lot of enthusiasm. And people have been talking with us about other ways they are using Hyperledger to address climate challenges. For example, we’ve heard about using Hyperledger to create smart energy grids and that will help us increase energy efficiency and integrate more renewables into our energy mix. And this is what makes open source communities so powerful — when there is an open forum where people can show up and contribute their ideas and energies and work with others that are also passionate about the same thing great projects can happen. And from the level of interest we’re seeing so far we’re excited to see what comes out of this effort.
Q7: Any timelines set up yet?
A7: Timelines are underway. We are happy to offer an update when there’s more detail to share.
Q8: Do you believe it is possible for nations to meet climate goals at all? Many doubt it, also not much progress so far.
A8: This question goes beyond blockchain and over to climate action goals. The WEF Global Risks Report 2020 identified “Climate Action Failure” as the #1 top risk. That is not a technology failure, rather it is a governance failure across economics (e.g., short-term profit maximization driven decision making), politics (e.g., short-term political cycles), and socio-cultural norms (e.g., consumer driven, immediate satisfaction, individualistic behaviour). By the numbers, roughly 400 billion tonnes remain in the 1.5C carbon budget. With approximately 8 billion earthlings, on the generous assumption that each earthling gets an equal share, that is equal to 50 tonnes each (recognizing developed country citizens have used up their carbon budget already – they have a hard argument to receive any of what remains). An average American, Canadian, Australia emits about 20-25 tonnes annually, 50 divided by that is between 2 to 3 years of the status quo, then zero-carbon. Not a likely scenario so, in our opinion, the goal of 1.5C is not possible. The 2C carbon budget provides a few more years, although still a major challenge for people, politicians and profiteers to change.