Today, the focus of many governments, organizations, and individuals has shifted to how to deal with climate change. Although progress has been made in the struggle with climate change, there are still lots of areas where further actions are required. One of the organizations leading the need to fight climate change is IBM.
This international company is betting big on how blockchain can be used to combat climate change. Let’s check out some of the ways through which IBM bets big on fighting climate change with blockchain technology.
What is blockchain?
Before explaining how IBM is trying to use blockchain to deal with climate change, it is vital to explain the meaning of blockchain. Blockchain is also known as Distributed Ledger Technology (DLT) and is the main technology that facilitates how people transact cryptocurrencies. This technology is a form of digital ledger that ensures that crypto transactions are decentralized, immutable, and transparent.
So, when people sell or buy Bitcoin, Ethereum, and many other digital currencies, blockchain is the system behind the transactions. Notably, the use of blockchain transcends different industries.
How IBM is using blockchain to deal with climate change
Reducing carbon dioxide emissions
In a bid to reduce carbon dioxide emissions, various organizations are creating carbon offset credits. These credits serve as compensations for the carbon dioxide emitted. After the credits have been traded, the money gained is invested in the reduction of emissions. However, the process involved in the investment is not only difficult but is also time-consuming.
Fortunately, IBM and Veridium have introduced an easier and more effective way to reduce carbon dioxide emissions. These companies are using blockchain technology for the tokenization of carbon offset credits. While working with numerous third parties, the tokenized carbon offset credits are readily available and accessible.
The sister company of Veridium, InfinteEARTH also has an important role to play in this process. The company will sell tokenized credits to different organizations that are looking for ways to reduce or get rid of their carbon footprints.
It should be noted that the system will be automated to ensure the automatic calculation of the number of carbon credits needed by a company for dealing with its existing carbon footprint. With blockchain technology, the calculation will be seamless, quick, and accurate.
Handling the supply chains in a more eco-friendly way
The supply chain is another area that IBM is betting big on the use of blockchain to deal with climate change. Lots of products used in different parts of the world come from the Far East. Unfortunately, the physical shipping of items from one area to another is one of the leading causes of carbon emissions. Also, the paperwork involved in the shipping processes can be quite enormous.
However, documentation can be made easier with blockchain. As blockchain boosts the efficiency of documentation, there will a reduction in cost and an increase in productivity. Over time, this can also lower carbon dioxide emissions.
A few years ago, a blockchain system was used by IBM, Walmart, Tsinghua University, and JD.com to track the shipments of leafy vegetables. The system aided how shipments could be tracked at different stages of the supply chain until they reached the retailers. In the long run, this blockchain system improved food safety and security.
Improved tracking and reporting of emission situations
One of the major challenges we are dealing with is tracking and reporting emission reduction. Generally, organizations and governments can give false reports without anyone verifying them. Nonetheless, blockchain can be used to deal with this challenge.
Basically, when blockchain technology is used for reporting situations of emissions, organizations will be more transparent about greenhouse gas emissions and pollution. This is because blockchain makes it almost impossible for anyone to manipulate the reports; hence, they can be easily tracked for verification.
With time, this will have a significant impact on the decisions of policymakers. Besides, it can encourage them to incentivize the reductions of the emissions of greenhouse gas.
Improved flow of climate finance
Expectedly, the fight against climate change can only be successful if a suitable financial commitment is available. Unfortunately, banks and other conventional lending institutions often struggle with financing ecological projects. However, with the tools provided by IBM and other organizations, decentralized peer-to-peer (P2P) lending platforms can be easily created. These platforms will focus on financing ecological projects and, as such, dealing with climate change.
Without a doubt, IBM is already working hand-in-hand with different companies to bet big on using blockchain to fight climate change. It is noteworthy that many of these projects are still at their developmental stages. So, there are still lots of areas where they need to be improved to achieve the overall goal of combating climate change and making our environment safer.