How Blockchain Technologies Fight Climate Action?

How blockchain technologies help fight climate action? The climate is changing rapidly due to no unknown reasons and several countries, governments, environmentalists and even individuals are worried about it.

However, there is a way out in which such a growing and serious issue can be handled.

As you may know, the new and innovative blockchain technology can be used for different purposes and one such purpose is to fight climate action.

The European Commission has also thought of using this digital innovation in blockchain technology for fighting climate change.

Blockchain technology is known to improve the transparency, traceability and accountability of greenhouse gas emissions.

It can handle and provide companies with all available data related to carbon emissions.

It can provide instant verification and authentication of real-time data with clearer records.

This data is more reliable, accurate, standardized, and, most importantly, are readily available.

When it is used through smart contracts the process of calculating, tracking and reporting on the diminution of the carbon footprint through the whole value chain becomes much easier.

Ideally, the blockchain technology helps in transforming disparate efforts of individual companies into a systemic and combined effort.

While doing that, it also helps in pinpointing the contributions of each actor to decrease their carbon footprints very clearly.

It also results in a healthy competition because market-based inducements are offered which eventually results in a win-win condition for all.

In this article you will come to know how exactly blockchain technology helps companies to fight climate action. So, read on.

How Blockchain Technologies Help Fight Climate Action?

How Blockchain Technologies Help Fight Climate Action

Climate changes have affected the entire world and especially the developing countries.

You will come across a lot of publications to find that at the current rate, the temperature of the globe will increase by not less than 2.7°C by the end of this century.

This is a catastrophic number. In order to keep the temperature to 1.5°C, it is required to almost reduce carbon emissions to half in the next eight years.

This can be done effectively with precise load monitoring. It is also needed to generate and distribute in the grid by using the data more efficiently.

Blockchain technology can play a significant role in it though it is known to be the technology that underpins cryptocurrencies.

The distributed and decentralized ledger will trace and verify multilayer transactions and help in monitoring real time pollution and the sustainability of products.

Therefore, blockchain is the key technology in fighting climate change but the developing countries know very little about the ways to use it, experts say.

However, other countries are using this technology extensively to reduce the bad effects on the climate by unlocking new opportunities.

This is corroborated in several reports from different organizations such as the United Nations Environment Program or UNEP, the Social Alpha Foundation or SAF, and others.

Established companies as well as the startups in clean technology play a significant role in fighting climate change.

These companies typically do so by creating platforms that run on blockchain basically to bring all the stakeholders together which may include different companies, governments, and citizens.

The desired depth and breadth is provided by the decentralized nature of blockchain which enables and engages everyone participating in the calculation.

With the use of blockchain technology it becomes easy to track and report on reduction of greenhouse gas emissions in the entire supply chain.

It may include suppliers, distributors, manufacturers, and consumers.

Therefore, it is very important both for the private and public investors to recognize the unique value of this innovative digital technology to clean up the climate by tracing CO2 emissions and neutralizing carbon footprint.

Given the current scenario, the world is facing the wrath of carbon dioxide emissions which is considered as the primary cause for climate change and global warming.

If you look at the different data and statistics provided by the United Nations you will be quite alarmed yourself.

According to this data, even if all the countries of this world successfully meet the targets set in the Paris Agreement, it can only remove one-third of the carbon emissions.

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Therefore, there is a lot needed to do and more involvement required from the people and companies from all corners of the world to meet the reduction required to make the world more sustainable.

The first significant step to take in order to deal with this grave situation of climate change is to work out and record the carbon footprint of each company.

Then, the necessary steps are to be taken to offset them individually. Using blockchain technology in this situation will be very helpful.

This technology will help in measuring the carbon footprints by using smart sensors that are compatible with Internet of Things or IoT.

The data generated can also be easily analyzed, aggregated, and cleaned or debugged on the blockchain.

Also, with the use of the blockchain trading tokenized carbon credits will be much easier for the public organizations and other companies for offsetting their carbon footprints.

The transparent and traceable information on the blockchain technology will offer a unique opportunity to reduce the effect of carbon emissions.

In fact, blockchain is supposed to be the most effective technology that will expedite the actions on climate change and the changeover to clean energy and prevent biodiversity loss.

Key Activities

Some of the most significant steps that most of the companies, individuals, the European Union and other governments are taking to harness the power of blockchain technology in order to fight climate action are:

  • Promoting the improvement and adoption of blockchain technologies that are most suitable to triumph over the tragedy of the commons
  • Incentivizing the participants to lower their carbon footprints and considering the impacts of their actions on the community on the whole
  • Developing and providing technical support and investment programs to blockchain-based innovations adapted to mitigate climate change
  • Accelerating solutions based on blockchain technology that set up an association between consumers and suppliers and also includes every societal stakeholder above and beyond the individuals
  • Backing up more sustainable finance initiatives and encouraging the use of blockchain technology for funding climate actions through fintech solutions, green bonds, and other alternative finance machinery
  • Supporting national agencies, governments, and countries to work together with the adaptation and development of solutions based on blockchain technology to combat climate actions and reduce greenhouse gas emissions
  • Building partnerships with tactical UN agencies, partners, and international financial institutions such as the European Investment Bank, the World Bank, and the European Bank for Reconstruction and Development and
  • Supporting the fortifying clean technology innovations ecosystem in the country and improving access to finance for the small and medium sized enterprises and startups for clean technology.

With such actions taken, it is clear that the world is now considering the climate change issue seriously and taking active measures to remedy it.

Ways to Use

While using blockchain technology in businesses there is one significant thing that you will need to keep in mind.

You will need to know the different ways in which you can use it successfully.

There are lots of prospective applications for blockchain technology to fight climate action. Here are a few of them.

It can be used in the carbon markets to enable the mechanisms for trading and accounting the outcomes of carbon mitigation.

It will help in maintaining an immutable audit trail of mitigation outcomes created and transferred.

It will also help in trading with different granularity units and levels as well as help in lowering the costs of transaction and management.

In addition to that it will increase the speed of transaction, ensure safety, and increase traceability of carbon emissions offsets and certificates.

Blockchain technology can also be used in climate finance to enable and facilitate investments in this specific field through better traceability of capital flows.

This will, in turn, help in enhancing accountability and facilitating all results-based finances that are earmarked.

Add to this, it will help in reducing transaction and management cost and at the same time enable automated micro-payments.

When blockchain technology is used in the clean energy sector it will enable decentralized energy systems and allow making peer-to-peer transactions.

The prices of energy will be more affordable for the consumer as well as the producers both.

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It will also help in the traceability of certification of renewable energy products and while adding incentives for energy generation.

Combining blockchain technology with smart contracts can also be used in several emergency supplies such as a wastewater processing facility.

This will connect all of the sensors placed on the pipes and the water treatment plant.

This will record the alarm when it is triggered for some reason and alert the regulator.

The best part is that it will issue a fine immediately in cryptocurrency.

Everyone authorized will know about it and these transparent records cannot be faked.

Previously everything was done manually right from reading the sensors to inputting data on the spreadsheet.

This report was then sent to the official regulator.

This means that when something unwanted happens, such as the waste parameter exceeding the officially permitted level and the alarm is triggered it will be recorded late and action will be taken by the regulator even days or weeks later.

And, of course, the alarm can be turned off or the spreadsheet itself can be manipulated to cover up the contamination occurrence.

Blockchain also facilitates carbon emission initiatives by supply chains.

The world today relies on supply chains and it has become more reliant on them after the pandemic especially.

When things come from faraway places it involves carbon emissions in the form of physical shipping.

It also involves a huge amount of paperwork when the goods move through several customs systems of different countries.

This is not only a wasteful process but is also very tedious and nightmarish.

Any simple error or missing out a checkbox to tick will result in costly frustration.

With the use of documentations based on blockchain, it will enhance efficiency, increase productivity, reduce costs, and decrease carbon emissions.

The power generation sector is currently going through a technological revolution and it is not produced in a large power station centrally any more.

Therefore, there is no national grid to distribute that power to the homes and offices.

Electricity as such is quite difficult to store and the central control room can bring online the backup power stations in situations like a fire or flood taking down a part of the system by simply turning on a switch to spin up the huge power plant.

Now, things have become much more complicated with irregular renewable energy making up a substantial part of the grid.

Use of solar panels or wind turbines anyone can generate electricity.

Nowadays, technologies such as DERs or Distributed Energy Systems are used that need complex computers to operate.

It needs tracking everything along with complicated payment systems to pay fairly and proper incentives to motivate.

Machine Learning and Artificial Intelligence are essential for such types of Internet of Things of the future to make a large number of bi-directional machine negotiations.

These things will not waste energy and operate when it is cheap.

However, it needs blockchain technology to track it, reduce transaction cost, and maintain transparency enhancing the efforts to fight climate change by reducing energy wastage.


There are lots of benefits of using blockchain to track carbon emissions and fight climate action such as:

It will offer more transparency while you create a social strategy to fight climate change.

Every transaction of carbon emission offset will be visible to anyone authorized to access it.

It will also reduce the cost of operation because blockchain technology is decentralized which will therefore not need any intermediaries to complete a transaction.

It will improve trading of carbon credits and offsetting carbon emissions as well with better compliance and control over carbon quotas.

The transactions will be completed at a much faster rate because the steps involved in their executions will be reduced.

It will improve and ensure better climate finance flows by facilitating the progress for renewable energy exchanges.

It will also improve tracking of carbon emission reports that is the key component to draft policies that will promote reducing greenhouse gas emissions.

Since blockchain technology assures more transparency it will eliminate chances of double counting while greenhouse gas emissions reporting.

Therefore, using blockchain technology in the energy sector will help in implementing the Nationally Determined Contributions or NDCs according to the Paris Agreement.

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This technology will help in verifying the activities regarding carbon offsetting that have actually occurred by tapping new information sources such as the Internet of Things.

The smart contracts will help in rewarding critical tasks verifying carbon emission reductions in a more efficient way at a local level.

Using blockchain will drive innovation since this technology is itself quite innovative.

It can help in generating renewable energy, selling them to the grid, accelerate deployment and help in moving away from less sustainable electricity subsidies.

With the use of blockchain technology the developers of the renewable energy projects can be brought together with the purchasers and investors on the same platform.

This will ensure more improvements and follow recognized international standards with due diligence.

According to an estimate of the United Nations Development Program, financing of about $650 billion per year is required in renewable energy in order to meet the Sustainable Development Goal 7 on it.

However, most of the renewable energy projects are often bogged down due to shortage of finances, absence of liquidity, and high investment costs.

With the use of blockchain technology every renewable energy project can be made more bankable with proper and safer cash flow by selling energy to different sectors and even receive cross-border payments without any need for beneficiaries or intermediaries between them and the investors.

Making the best use of the smart contracts the blockchain technology will be able to mitigate the chances of commitments related to climate slipping back, especially if there is a monetary deposit.

If in case any country fails to meet the set target of emission reduction according to the Paris Agreement, their deposit will be taken and distributed in the form of green coins to those who have successfully abated carbon emissions with any sort of climate action.

Using blockchain will not only be cheaper and easier to operate in comparison to the older methods while fighting climate actions but it will also be necessary for the future smart city.

It will help in monitoring huge amounts of data flows in real time and at the same time help in improving all sorts of negatives such as energy consumptions, carbon emissions, pollution, waste and recycling, traffic gridlock, and lots more.

The list of opportunities seems to be endless. Even the grid efficiency can be tracked by long range drones which will make operation of carbon footprints and credits and its maintenance much cheaper.

Finally, use of blockchain can also automate sustainable practices and incentivize them. In the developing countries there are monitoring difficulties of fighting climate change.

There are also a lot of unbanked people there. If they are paid to something that is green and good for the planet it will offer dual benefits.

It will reduce poverty as well as climate change.

Payments can be made easily without the need of traditional banks because everyone has a smartphone now and therefore they can be paid through smart contracts and a crypto token app.

More advanced systems based on blockchain technology can encourage more sustainable practices and projects.

However, continual research is conducted on other useful ways of integrating blockchain technology into other sectors so that they can also enjoy the benefits of sustainable development.

It is expected that in the following years, the benefits of implementing this innovative technology for climate change will be much more.


Developing management systems and solutions based on blockchain technology can help fight climate change significantly as it is pointed out in this article.

It will help in monitoring, analyzing and calculating carbon emissions and offset it with a more sustainable business model.