Blockchain’s Potential To Improve Environmental Sustainability

by | Apr 17, 2023 | Green Investments

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In today’s world, the pressing need to address environmental challenges has become more urgent than ever. As concerns about climate change, deforestation, pollution, and other environmental issues mount, the search for innovative solutions has gained momentum. One technology that has been generating significant buzz in recent years is blockchain. Although widely known for its applications in the field of finance, blockchain’s potential to improve environmental sustainability is garnering attention for its promising capabilities to revolutionize how we approach and tackle environmental problems.

Blockchain, the distributed ledger technology that underpins cryptocurrencies like Bitcoin, offers a unique set of features that can potentially drive positive environmental impact. With its decentralized and transparent nature, blockchain has the potential to disrupt traditional systems, provide accountability, and enable traceability, creating new opportunities for environmental sustainability. From carbon credits and supply chain management to renewable energy trading and conservation efforts, the application of blockchain in the environmental sector is gaining momentum as a promising tool to address some of the most pressing environmental challenges we face today.

In this article, we will delve into blockchain’s potential to improve environmental sustainability. We will explore how blockchain can empower individuals, organizations, and governments to make a meaningful impact in areas such as climate change mitigation, resource management, conservation, and more. Join us as we uncover the fascinating ways in which blockchain technology is unlocking new possibilities and transforming the landscape of environmental sustainability.

What is Blockchain?

Blockchain is a decentralized, digitally distributed ledger that aids in transaction tracking and validation from a technical standpoint. Even though Blockchain is best recognized as the technology that powers cryptocurrencies like Ethereum and Bitcoin, environmental experts are already discovering other applications for it in combating the climate issue, from tracking pollution to the sustainability of products. Large-scale, worldwide sustainable development projects have become highly complex, which has led to delays and backlogs.

Processes and systems that use blockchain technology can manage transactions very effectively and efficiently. Investors are interested in sustainable development and other climate-related activities for this reason. Processes and platforms powered by Blockchain can assist in managing stakeholders who serve multiple purposes. As a result, sustainable development related to climate change will significantly benefit private investments, boost efficiency, and decrease transaction costs. In this article, we will learn more about Blockchain’s potential to improve Environmental Sustainability.


According to a United Nations Environment Programme (UNEP) report, Blockchain’s distributed ledger technology can offer essential enhancements by enabling investors, developers, and buyers of renewable energy projects to work together on a common platform with established international standards for compliance due diligence.

An Australian technology company called Power Ledger has begun investigating the potential effects of Blockchain. In Uttar Pradesh, India, the group created a trial project. They allowed homeowners who installed solar panels on their rooftops to sell electricity to other grid users. Real-time price setting and blockchain-based transaction implementation are required for this. The use of renewable energy can be expanded with the aid of these technologies.

How Can Blockchain Improve Environmental Sustainability?

Sustainable and eco-friendly supply chain practices can also be implemented using blockchain technology. By making supply chains transparent, technology can follow products from the point of manufacture and prevent waste and inefficiency. Blockchain can also give customers more insight into the manufacturing and delivery processes for the products. As a result, they will be able to choose environmentally friendly options.

A blockchain-based App called Foodtrax aims to eliminate food loss caused by incorrect handling and storage by tracking food from its origin to the shelf. Food Trax has coupled data temperature loggers with equipment measurement and monitoring through its blockchain-based App, concentrating on creating a customizable system that transparently covers all supply chain-related activities.

Recycling is one aspect of environmental sustainability where Blockchain can make a big difference. Organizations can offer financial incentives to people through cryptographic tokens by implementing a recycling scheme on the Blockchain. This might be provided in exchange for depositing recyclable items such as plastic bottles, cans, and other containers. This makes it easier to monitor vital information like cost, volume, and profit and assess how an individual or business may affect the environment.

Numerous organizations are already developing such Blockchain-based recycling initiatives. For instance, The Plastic Bank, a company, uses IBM cloud computing and blockchain technology to create a program that can be used to generate revenue from ocean plastic. Plastic Bank effectively establishes collecting points around developing nations through its sustainability initiative, turning plastic waste into money. This enables individuals to deposit spent plastic in exchange for various rewards, including monetary rewards.

Users can access a reward and incentive system for recycling aluminum, plastic, and steel cans using the decentralized application (dApp) RecycleToCoin (RTC), built on the Blockchain. RTC encourages people to recycle more and receive rewards by collaborating with international offset and reward partners and using app-based collection points.

How Will Blockchain Drive A Sustainable Future?

1. Although it is still in its infancy, Blockchain, a secure and distributed electronic ledger, is frequently called “the most disruptive technology in decades.” Blockchain, created only ten years ago, is revolutionizing the way money is exchanged and has the potential to generate profits while promoting climate action through improved carbon emission trading, facilitated clean energy trading, improved climate finance flows, and improved tracking and reporting of greenhouse gas emission reductions.

2. We will be better able to fight the war on climate change on a global, not just local, scale as long as all players in the green finance field continue to believe in the convergence of cutting-edge technology and sustainable financial practices. Blockchain will make financing globally coordinated, sustainable development initiatives easier, such as “large infrastructure and power projects where multiple private investors, multilateral development finance institutions, and governments are involved in various phases of the projects,” according to the World Economic Forum.

3. Large-scale, worldwide sustainable development projects’ financial transactions are getting more intricate, leading to backlogs and delays. Platforms and procedures that use blockchain technology can handle many transactions more effectively. As a result, investors will be increasingly interested in sustainable development and other climate-related initiatives. “A wide range of stakeholders working in various capacities on various projects across continents may be managed efficiently by blockchain-enabled platforms and processes. According to the World Economic Forum, it will boost productivity, reduce transactions, and improve the investment appeal of infrastructure, other sustainable development, and climate-related projects.

4. “Climate action information may now be updated continuously from various sources thanks to blockchain technology. The International Institute for Sustainable Development article also advocates open and transparent data sharing. The Climate Change Coalition was established by the Secretariat of the United Nations Framework Convention on Climate Change (UNFCCC) in January 2018 to promote blockchain adoption. According to this group, Blockchain will enhance sustainable investments’ cost-effectiveness, transparency, and traceability while acting as a foundation for private institutions to build to advance SDGs.

5. Blockchain technology’s smart contracts, which boost autonomy and speed of execution for financial transactions, enable task automation and reduce the trapped currency in the value chain of a transaction. As a result, financial institutions can conduct worldwide green finance trade, strengthening international cooperation and the commitment to tackling climate change.

What Are The Pitfalls of Using Blockchain Technology?

Although using blockchain technology to address the environmental situation has numerous advantages, there are also many drawbacks. Some Bitcoin and Ethereum blockchains transactions take considerable electricity and computational power to process. In many nations where energy costs can be excessively high, this is a significant problem. Moreover, regulatory frameworks are necessary since they will be crucial in tackling the high price of processing power. Energy customers will likely participate in surplus energy trading using blockchain platforms since electricity pricing would have to change.

To Conclude

One of the numerous cutting-edge technologies that could aid in resolving some of the current environmental issues is blockchain technology. Blockchain applications can provide decentralized energy systems, common-pool resources, innovative financial instruments, supply chain monitoring and tracking, and peer-to-peer trade of tokenized goods. The analysis makes it clear that Blockchain technology may undoubtedly assist in finding solutions to the environmental challenge and enhancing sustainability in various ways. Yet, advancing digital infrastructure is necessary to promote the adoption of emerging technologies like Blockchain. Policymakers must adopt policies that can aid in designing future energy systems and prevent environmental hazards as Blockchain and associated digital technologies advance quickly.



  • Dr. Tanushree Kain

    Tanushree is a passionate Environmentalist with a Doctorate in Environmental Sciences. She is also a Gold medalist in Master of Science (M.Sc), Environmental Sciences. She has 6 years of experience as a guest faculty in Environmental Sciences. With her combination of technical knowledge and research expertise, she can create clear, accurate, and engaging content that helps users get the maximum information regarding environmental topics.

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