The blockchain boom—tackling environmental issues

Environment analysis: As part of a series exploring the ‘blockchain boom’, David Brennan, partner and co-chair of global tech at Gowling WLG, considers how blockchain technology can address environmental issues

How can blockchain technology tackle various environmental issues, for example climate change, recycling and supply chain management?

Blockchain technology is already being used to tackle a range of environmental issues, such as recycling schemes which offer bitcoin-based reward tokens in exchange for those making the effort. However, the wider environmental benefits of using blockchain are, while possible, more challenging and complex in terms of their application.

For example, the current use of ‘smart grids’—which are designed to optimise energy consumption by detecting and reacting to changes in usage—is an ideal pairing with blockchain technology. Smart grid technology allows peer-to-peer energy exchanges between users on the same grid network. The use of blockchain technology will ensure that accurate user preferences are immutably logged and efficiencies are exploited, resulting in more energy being available across a network capable of delivering a customised and preferred level of energy to each user.

From a supply chain perspective, using blockchain to track the typically fragmented and complicated stages of the process has the potential to tackle discrepancies and revolutionise supply chain management. While all participants in a supply chain have the same goal in getting a product from the original source to the final customer, there is very often a lack of visibility and communication among supply chain participants. The traditional supply chain can therefore be inefficient, incredibly complex and expensive. Introducing blockchain technology to this process has the potential to:

  • create transparency
  • enable real time, immutable and validated information
  • allow for end-to-end ‘track and trace’ and a secure, validated record of the provenance of the goods—something that features high up the list for the modern, ethical consumer

Are there any other environmental issues, or aspects of environmental law, where blockchain could play a role?

Most certainly. For example, it can be difficult for the international community to hold a country to account for any legal obligations it has to heavily reduce its domestic impact on the environment—especially because information can be tampered with in order to create a false impression.

Blockchain has the potential to accurately track adherence to any promises by individual countries by tracking data and clearly showing whether obligations have been met. For example, the Blockchain for Climate Foundation has the aim of putting the 2015 United Nations Paris Agreement on the blockchain. The focus on a shared responsibility in delivering a reduction in greenhouse gases is a fantastic opportunity. Blockchain is assisting in delivering it by providing a solid ledger of activity and accountability around the deliverables signed up to within the agreement. So, as a process that is more resistant to fraud and misrepresentation, blockchain is helping to provide the assurance that any claims made are genuine, as the ability to fabricate any claims is automatically reduced as a result of using a far more transparent system of accountability.

What will be the key challenges to the adoption of blockchain technology for the environment, and what should environmental lawyers be aware of?

The main challenge to more widespread adoption by governments and large organisations or businesses is awareness of the technology and a willingness to commit to it—especially as traditionalists may well see it as a threat and something that falls outside of their comfort zone. We must also remember that the technology is still in its infancy. An element of trust must therefore attach to what is a ‘trustless’ system. However, following the crowd is still a viable route to increasing adoption, so by ensuring that the most influential in this space use the technology, others are more likely to follow suit.

This reluctance, however, is counter balanced by the commercial imperative for businesses to utilise the technology. Added efficiency means one thing that always seems to make people sit up and take note—a better, more transparent service and ability to collaborate, as well as an innovative route for peer-to-peer exchanges, where relevant. Uncertainty and complicated processes seem to rule administration of any movement, industry or sector and the environment and environmental law are not exceptions to the rule. Technology is infiltrating every aspect of our lives and all legal experts, not only those focused on environmental issues, need to think as laterally as possible about how to apply the technology and recommend applying it. Otherwise, the risk of being left behind (by clients and the industry itself) is heightened.

The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor.

Filed Under: Environment

Relevant Articles
Area of Interest