Blockchain, Climate Change & Money - The Good, the bad and the ugly?

In this Blog post, I want to discuss the potential contribution of Blockchain to sustainable development on a very fundamental level. Using global climate change as an example I will argue that BC has the potential to tackle one of the underlying drivers of unsustainability in our economic system – our money.

Let’s start with a short sketch of the problem we are facing. In its special report “Global Warming of 1.5°C” the IPCC [1] states that if we stay on the track we are on now, it is likely that we reach 1.5°C increase in global average temperature already in the next 11 to 33 years. Well 1.5°C degrees does not sound too much – but actually this report was only written because scientist got more and more certain (and outright concerned) that a higher global temperature rise as 1.5°C would increase the risks for human suffering in such a way that we should do all we can to stay below 1.5°C.

So what changes will we already face with 1.5°C degrees global temperature rise? Here are three examples:

• Your day-to-day weather will become more and more unsteady and unpredictable. It will be hotter, the storms stronger, rain heavier. Leading to more damage on infrastructure and crops, increased health problems and climate-related deaths to name just some effects.
• Sea level will continue to rise. Projections suggest a range of 0.26 to 0.77 m by 2100 for 1.5°C of global warming – meaning that by latest 2050 either 40 or 140 million people are forced to migrate. If you are living in a coastal town, you could well be one of them.
• In the next 30 years Coral reefs are projected to decline by a further 70–90% and that already at 1.5°C. They will most certainly disappear (losses >99%) at 2ºC says the IPCC. In fact, it is very likely that we can already say goodbye to one of the most diverse and iconic ecosystems. Only in the most progressive adaptation scenarios, there will be Coral Reefs left on this planet.

The IPCC concludes that the pathways that limit global warming to max. 1.5°C require “rapid and pronounced system changes”. But are we on track? For the Paris Agreement States submitted their CO2 reduction goals. Well this is what the EU says about them:

These national climate action plans, communicated by 189 participating countries to date, will not be sufficient to meet the ambition level required to stay well below 2°C. [They] are not yet enough to keep global warming below 2°C […]. [2]

This shows that – while we have achieved some success – we are still far away of the “pronounced system changes” we need. One of the systemic problems that has to change with “high certainty”, as the IPCC would put it, is the paradigm of infinite growth underlying our current economy – with our debt-based monetary system as indivisible part of it. Whether we want economic growth or not, the capitalistic system needs growth to at least match interest repayments in order to remain stable – which is hardwired in the way our money works today. It is therefore no surprise that many local initiatives that have successfully started processes of transformation, have introduced local currencies as well. The Transition Town [3] movement and the Bristol Pound [4] can serve as well-known examples.

It is here where one of the big promises of blockchain comes in. With Bitcoin being the biggest – albeit not sustainability-related – an example of a successful blockchain based application the technology has shown its potential to create new monetary systems. They are self-organised not depending on higher level institutional support, controlled by the people using it and easier to upscale – even to a global level.

Could Blockchain be the chance to build new forms of currencies that will be the foundation of new sustainable economic systems? Well, this is one of the hidden promises of Blockchain. To lift its potential it will be necessary for a diverse community of IT and sustainability experts, scientists of different disciplines entrepreneurs, NGOs and many others to join forces and work together. With the [UN]Block3d project and conference we try to support this process through the creation of space and knowledge that enables system changing blockchain solutions for the common good to emerge and take off.

References:

Intergovernmental Panel on Climate Change (IPCC) [1]

Questions and answers on the Paris Agreement [2]

Transitionnetwork [3]

Bristol Pound Movement [4]

Published by Martin