Environmental Governance with Blockchain Technology

Jointly organized by EKLA-KAS, the International Intelligence Unit of the Getulio Vargas Foundation (FGV), ICLEI – Local Governments for Sustainability, Nature Invest and Climate Ledger Initiative, a design thinking workshop aimed to advance the debate on how Blockchain Technology can support environmental protection took place on July 24-25, in Lima, Peru.

The concept of distributive economics isn’t something new, but it became a significant reality only in 2008 after the publication of the article "Bitcoin: A Peer-to-Peer Electronic Cash System" by Satoshi Nakamoto, which represents the mainstreaming of cryptocurrencies and blockchain. Blockchain functions as a "trust protocol", or a “large ledger book”, in a shared and universal way, promoting consensus and trust in the direct communication between two or more parts without the mediation of institutions. Innumerable applications for this technology are in progress, and environmental conservation and sustainable governance at all is a propitious field to explore these benefits.

In his introductory lecturer at the open debate, Sven Braden, Director Climate Ledger Initiative explained what is the Blockchain Technology and which are its many applications in the field of climate change. Besides getting familiar with the Blockchain language, his presentation focused on its decentralized, transparent and immutable character and on case studies, such as the various technologies such as internet, smart phones and blockchain being used to track deforestation in timber supply chain.

Next a panel on “Beyond Bitcoin: How can Blockchain-Technology support environmental protection?”, with the participation of Leonardo Paz Neves, of the IIU Getulio Vargas Foundation, Michael Becker, of the NatureInvest, Rodrigo Perpétuo, of ICLEI South America and Christian Hübner, Head of EKLA-KAS focused on specific blockchain applications in:

• Climate Finance: the use of the technology to enhance transparency in climate finance initiatives, avoiding corruption;
• Blockchain and Local Governments: a tool for cities and states in developing their climate plans and controlling GHG emissions. Its importance lies in the NDC implementation being highly dependent on climate change measures at the local level, but subnational governments face limited resources;
• Blockchain and Agriculture Supply Chain: decentralized tool to track the supply chain of agricultural products aiming to control and implement social and environmental regulations;
• Blockchain and Governance: technology as a tool for democracy development. That is a need for participation of the private and public sectors;

During the Q&A session, blockchain benefits such as the verification of investments, data transparency, monitoring and empowerment; as well as its challenges in regard of energy consumption and trust were discussed. Additional topics related to the need to be aware of blockchain hype and of the traditional problem of inequality in Latin America. An important concern relates to the question if Blockchain is a tool for more equal development or will it increase inequality, taking into account the need for digital inclusion for example.

Our main motivator was to discuss how to translate blockchain climate change applications into public policy. Built from a previous workshop that discussed the potential contributions of the Blockchain technology to greater transparency in climate finance, this workshop focused on:

• The Amazon Protection with Cryptocurrency:

Its main goals was to discuss the use of cryptocurrency for Amazon protection; present the ongoing pilot project of blockchain applications at the Amazon Fund; explore other possible applications of blockchain to support environmental compensation mechanisms; get to know good practices or innovative models on development; promote the articulation of engaged key-actors and define guidelines and conceptual basis for future projects. This workshops aimed to illuminate innovative practices already in progress, and at the same time to promote the articulation between the different stakeholders and technology providers in the private and governmental scope, to benefit the development of projects that favor biodiversity conservation and environmental compensation policies in South American region.

• Transparency in the Agricultural Chain Value:

Its objectives were to explore the possibilities of the “trust protocol” in the agribusiness sector. It analysed the exchange of information between the actors of the agricultural supply chain and its implication to third-party certifiers. It aimed to understand how blockchain can improve this process in a context of taking into account that the consumer’s interest in food origins, use of pesticides, labor aspects, and food quality is continuously increasing; understand how blockchain can foster a social control of producers sharing the same supply chains; and find out how biodiversity and agriculture interlinked in a blockchain environment.

Future EKLA project on the topic will focus on Blockchain and Energy. More information comming soon.