In its recent remarks, the World Economic Forum (WEF) released authored a paper, 'Building Block(chain)s for a Better Planet.' This study, crafted alongside PWC and Stanford University's Stanford Woods Institute for the Environment, paints a promising picture for blockchain and outlines several impactful applications it could have.
According to the report,
Solutions with blockchain applications that stand out particularly for their relevance in environmental contexts tend to align with certain overarching themes: aiding the shift towards cleaner and more streamlined decentralized networks; facilitating resource or permit trading directly between peers; improving transparency and management throughout supply chains; introducing new financial models for environmental objectives; and harnessing non-financial value and natural capital in effective ways.
One of the most captivating ideas mentioned in the statement above is this notion of 'non-financial value.' In today's world, there seems to be a relentless pursuit of profit, often neglecting the true essence and value of money.
World Economic Forum Is Optimistic About Blockchain's Potential
Despite the somewhat dry style of its writing, the report brings forward environmental concerns that rarely gain spotlight in the media. Blockchain has the capacity to tackle inefficiencies, which in turn could offer substantial advantages to our planet's ecosystem.
The document continues by stating, 'Even though we have witnessed significant economic growth (real output expanded 20-fold, lifting 700 million individuals into the middle class), this progress has often come at the cost of our natural environment; the drive for economic growth, and thus rising demand, is mounting pressure on our environment,' which is a point worth considering.
Getting Past the Hype
There's been a significant amount of buzz around blockchain.
The term ‘blockchain’ was almost interchangeable with cryptocurrencies until recently when the broader capabilities of Distributed Ledger Technology (DLT) came to light. The WEF report attempts to dispel the illusions that have ensnared many and shifts focus towards blockchain's genuine potential in altering various sectors of trade.
The WEF cited the energy sector and utilities as a fertile ground for blockchain innovations. Out of the plethora of ICOs introduced over the past year, less than 1% involved the energy or utility sectors. The WEF document uncovered 65 blockchain use cases, many prevalent in the energy field.
Top 4 Areas Where Blockchain Can Drive Change
The WEF pinpointed 8 areas where blockchain might emerge as a groundbreaking technology—a quartet of which could spur new enterprises that yield tangible social value.
ONE Transparent Supply Chains
The WEF might be a little late to the blockchain trend within the logistics domain . They perceive blockchain as heralding a new era in how global supply chains operate, aligning with platforms that firms like IBM are currently implementing.
Read: Blockchain & Supply Chain Management
TWO Sustainable and Decentralized Resource Allocation
A centralized model for distributing resources was once the most efficient approach. In an era when coal or natural gas formed the backbone of the power grid, centralized management by expert entities was likely the optimal choice. Now that unconventional energy systems are viable, it may be time to rethink how we distribute power.
THREE Fresh Approaches to Finance and Investment
The global financial system is ripe for comprehensive reform. Blockchain seems tailor-made for microfinance and microlending, potentially revolutionizing how individuals gain access to financial resources. Rather than green energy providers vying for loans at existing market rates, blockchain could allow individuals to offer loans on favorable terms to companies they wish to support.
FOUR Blockchain Fosters Reward-Driven Circular Economies
Guess what?
Purchasing a product packaged in plastic doesn't reflect a fair cost. Several factors contribute to this, one being the substantial tax incentives granted to oil companies.
There is minimal motivation to recycle most plastic items, which explains the vast amount of plastic adrift in the Pacific Ocean. IBM is already utilizing blockchain to encourage the collection of the ocean's garbage patch, and numerous other areas could benefit from the same technology.
