At the outset Eco Endeavourers Network wishes all its network followers, friends, those interested in the environmental service motto of ours viz. striving for the planet in peril and one and all a Happy, Prosperous, Eco-friendly and sustainability driven New Year 2018.
7th Jan, 2018
Blockchain technology in Sustainability and Energy Sector Event Primer
A warm welcome to the first event of this New Year 2018. Regardless of size, sector, industries, companies and geographies, blockchain technology is emerging as a latest buzz - for - action digital ledger platform in sustainability and energy domain. There has been a major transitional shift and awareness across businesses, industries, cities and across the globe about the environmental challenges. Innovative and emerging technologies are being devised and implemented to resolve the ever so major upheavals. With background, an online thought leadership, know-how and open for all event was conducted with the focal point being "How Blockchain technology matters in sustainability and energy sector" on 3rd January 2018 from 6:30 PM 8:30 PM. The event was open for students, researchers, sustainability practitioners, energy professionals and those interested in the know-how of sustainability and energy related development happenings.
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Introduction: In a rapid changing global world digital information within micro seconds gets distributed and yes not copied...and that is blockchain technology. A blockchain is a digital distributed ledger that records transactions in real time. The transactions are not just financial transactions but applied virtually across varied domains and sector and everything that has value. To put in simple terms we can consider blockchain as protocol for transferring value over internet without any intermediary. The technology makes the database more reliable, transparent and cannot be falsified at any stage, involves cryptographic security and is more often made with tokens /digital currency or a crypto currency with best example being "bitcoin". The event aimed an attempt to develop the knowledge base and disseminate information and application of blockchain technology and how it matters as a most valued not-corrupted digital ledger platform with application to sustainability and energy sector.
Blockchain technology applicability is virtually applied across varied sectors like retailing, oil and gas, healthcare, textile, banking and finance, manufacturing, power, energy utilities, transportation and infrastructure and many such sectors looped in.
Blockchain technology - Applications
Blockchain technology as a digital ledger of transactions with upright database encrypted and in no way be falsified provide a platform for strengthening sustainability metrics, bridging the gap between the manufacturer and consumer and no middleman concept being involved and in strengthening the supply chain. The key feature that makes blockchain an emerging option is: it being real time ensures Every financial transaction has an impact on cost efficiency, decentralized assures transparency to Environment, so buying greener products and customers and regulators, no /intermediary and it’s a investing in sustainable life style habits will go distributed ledger, a long way for the our planet and its resource As today's millennials are getting environmental and conservation. The Paris climate agreement socially conscious and responsible about the products they has subjected pressure and binding across purchase, blockchain technology is a latest tracking and countries to reduce their emissions. measuring digital platform for exchanging information of value.
Businesses, companies and governing bodies are increasingly under spotlight customers, investors, shareholders, employees and stakeholders at large to reduce their carbon footprint. There is growing awareness of demonstrating business models that are aligned with due consideration to lessen the impact on climate or for a stable climate per se. Transaction history aim is to form a chain rather than tacking via a paper based information without value to supply chain. For example Walmart action to improve food safety and keeping a check from the source itself...thereby doing strategic removals and making the consumers confident and happy of the product they are buying. It has enhanced the Walmart as brand through increased traceability by capturing the attributes of concern across multiple iterations.
Buy in and Sustainability Products that are ecofriendly Products that does contribute to social value and contributes to society (social commitment) Packaging being environmentally committed Buy in of products that you trust ; every buy in customers in a way help the manufacturing companies to produce products that are of value, help improvise, benchmarking future products that can be brought into market as per requirement; saving cost as well conserving resource.
Blockchain through buy in information obtained through recording transactions by digital ledger shall help in manufacturing sustainable products as well as building a brand of value to the company and customers who use it at large. It helps control our carbon emissions, thereby proving to be a carbon footprint tool for monitoring. It proactively helps in tracking the source or origin of the products as they move across the supply chain, thereby keeping a track of the safety and environmental issues and conditions and whether they are getting tampered. A per the World Economic Forum Report around 10% of GDP will be stored on blockchain by 2025. The Paris climate agreement aimed at countries to reduce their emissions and companies are increasingly under the same scrutiny from investors, shareholders, employees and customers to reduce their carbon footprint, demonstrating that their business models are aligned with delivering a stable climate. Consumers especially the socially conscious millennials with increasing buying power want to purchase greener products and companies want to invest in sustainable projects. Financial services firms and banks too are investing heavily in blockchain technology and aligning sustainability as a way forward. In the energy sector, sustainability professionals when benchmarking their companies’ sustainability best plus practices, energy utilities or renewable energy developers are looking for a more efficient way of pricing and selling clean power as a way forward. At the same time it helps in tracking the electricity thefts as well and makes its reach where it should be. In the case of distributed grid, for example, it might help to sell excess power in an open market, thereby helping where it is in need of. It also can be a bigger market for solution towards power supply during extreme power cuts and blackouts. Blockchain may also be used to generate RECs.
Blockchain technology is a big boom to sustainability professionals, who otherwise have to face challenges to manage, monitor, thereby increasing working efficiency.
At the global platform developing countries, too are increasing looking in for mitigation and adaptation options, along with policy, innovative and technological intervention. Though countries have advanced in their strategies towards climate change Companies like Nestle and Unilever have signed action, still there is long way forward to go. with IBM to track for blockchain technology for providing solutions. IBM has recently claimed that Carbon credits put a price on carbon reductions and blockchain could enable track the entire supply provide revenue. Companies and individuals can be chain of the products there by strengthening empowered to reduce or offset the negative impact value based services. It helps retailers to go in for of their business and choices on the environment. auditing, thereby strengthening transparency. By placing a value on the ecosystems that support There is growing demand of use of smart meters our planet, carbon credits internalize the costs and real time monitoring and IoT solutions for through everyday choices that we and allowing a energy management at domestic and commercial sustainable market place to thrive. Incentivizing the level, how grid interface along with use of consumers for valuing the ecosystem services and renewables can help solve energy problems. Few choice of sustainable options or products buy in energy sector online platforms are using Microsoft shall be win-win proposition for the consumers Azure for including blockchain features to its moving ahead. However, carbon credits as asset system. A startup in New York, LO3 Energy is has not been given much importance due to using the blockchain to manage clean power transparency issues and trust factor. Carbon trading across a solar-fed micro grid. IBM through currency as a way forward in terms crypto-currency, private cloud service assist organizations develop tokens, and bitcoins shall help strengthen carbon and get blockchain applications across varied market. Across Indian market this trend has not yet sectors. The Australian company Power Ledger evolved and it is in its initial phase of being accepted enables people to buy, sell, and exchange as future market for sustainability, energy, forestry, surplus renewable energy without middlemen or other various sectors and domain.
intermediary. The MIT Media Lab promoted “climate change and blockchain” worldwide at the UN COP 23 climate conference held in Bonn, Germany last year.
Just image a real world where in our carbon footprint is tracked, accountable with transparency and reliability. If such scenarios exist in India then through blockchain government can bring into purview carbon credits at retail sector as well as Another important criteria are Carbon credits as in manufacturing sector. Retailers will be able to sell the real world of climate change, there is a products which have environmentally and social growing realization about the impact that climate value and know the carbon impact it creates. change may do, not just to the developing countries, but vulnerable countries as well.
At the consumer level, buying environmental and socially responsible products will leave a huge positive impact – small transactions at individual level and when the whole society follows it, a huge impact is created. The emissions through purchase can be tracked, measured and traded for carbon credits. Imagine for leaving a positive impact through purchase of environmental and social responsible products we get discount tokens/points which we can exchange in during next purchase. In yet another example, the European Union has drafted a legislation which includes supporting the citizens to generate and trade their energy savings, - energy generated using solar panels at their residential buildings. India is trailing in experiments in blockchain technology options and opportunities in energy domain especially at forefront are micro grids platform. Example: Tech Mahindra, and peer-to-peer based energy trading platform, Power Ledger, have created a new service for its clients interested in micro grids. A major advantage with micro grids is: they integrate multiple energy attributes such as solar, battery storage, electric vehicle chargers and analytics to measure energy efficiency. They are a reliable option for electricity as well as have low carbon footprint. Another example is in the forestry sector through – International PEFC (Programme for the endorsement of Forest Certification) which is working towards application of blockchain technology to track / trace the origin / source of wood which can help check illegal logging and tree felling in forested areas.
Along with the already existing and advanced remote sensing and GIS tools for application in forestry, blockchain will be a buzz - for - action platform moving ahead. Blockchain can be applied to tracking not only wood but products bearing sustainability labels too.
PEFC aims to work through the entire forest supply chain to promote good practice in the forest by making sure timber and non-timber forest products are produced with respect for the highest ecological, social and ethical standards. PEFC is the world's largest forest certification system. Their standards transform approach through which the forests are managed globally and locally. It ensures that all of us have equal access to the environmental, social and economic benefits that forests offer. The Programme for the Endorsement of Forestry Certification, responsible for more than 700 million acres of certified forests, has been investigating blockchain as an alternative solution for tracing source. They demonstrate how forest certification can contribute to forest-related investment activity. As the world’s largest forest certification system, PEFC provide credible information on, and assurances of, the sustainable management of forest resources around the world, help in capturing opportunities and mitigating risks inherent to the financing of forest-related assets. It provide SMART solutions for strengthening trust and traceability throughout value chains, solution for wood traceability, making updated forest inventories in real time.
India joined PEFC as a national member in 2015, though late but at right time. With India being among the world’s most forested nations, forest certification will help in mainstreaming sustainability in forest management, India joined increased network with companies and consumers about the importance of sourcing and buying responsibly sourced wood products. The process to develop India’s forest certification system was launched at International conference on Forest Certification – Positioning India: conducted jointly by NCCF and PEFC and its here India joined PEFC as National member in 2015. Another example in forestry sector is for : Reducing Emissions from Deforestation and Forest Degradation (REDD) by the United Nations to create a financial value for the carbon stored in forest, thus offering incentives for developing countries to reduce emissions from forested lands and invest in low-carbon paths to sustainable development. When compared to REDD, “REDD+" goes beyond deforestation and forest degradation, and adds the role of conservation, sustainable management of forests and enhancement of forest carbon stocks. A way forward in forestry sector will be REDD+ being brought into value as a natural capital asset since it has components of conservation and management also included and blockchain shall prove to be a paradigm for future sustainable forestry.
A quote by William Mougayar says “How do we create new value? You create value by running services on the blockchain.”
Benefits of Blockchain Technology Transparent No middleman/no intermediary/no third party involvement Faster transaction Data accuracy High quality data As governance can be subjected to corruption and are unable to steer sustainability across company supply chain, despite the environmental crisis, technological innovation offering radical and tangible solutions through blockchain is a welcome way forward and move beyond business-as-usual.
Challenges Opportunities for digitization using blockchain technology, and especially for cryptocurrencies like bitcoin, are a much needed alternative, however the major drawback is its huge requirement of energy as it involves multiple iterations. Extreme complexity
Way forward from India’s Standpoint
Through blockchain technology the entire supply chain becomes visible, it presents an opportunity for early intervention of product improvement and benchmarking,
Emerging Indian business conglomerates, few banks are exploring and testing the application of blockchain technology in the domain of finance, digital payment gateways, and trade and discount options. However not much focus or rather blockchain in sustainability and energy sector has not yet emerged as a paradigm in In
A major landmark step was taken in November 2016 by the Indian Government, where in our Prime Minister Shri. Narendra Modi announced demonetization of Rs. 500 and Rs. 1000 banknotes to check and limit on corruption and fraud. A way forward to it is initial platform into being emerging is the market of crypto-currencies and bitcoins.
In the energy sector India is exploring and trailing power grids on blockchain. Leading IT giant in India Tech Mahindra with Power ledger, a peer- to – peer platform of energy trading has created service for its clients through micro grids and opening the avenue of incentivizing sustainable energy .
To a question on how the briefing of finance domain and banking interface in the way forward is relevant to sustainability? The answer is - every financial transaction does make an impact on Environmental, social and economic attribute and whether it is positive or negative and since the impact is hidden and value is concealed, we often do not know how much carbon footprint we leave when we buy a product. Once the market of adding carbon value to the products we buy in will turn into realty, there shall be more awareness among what we buy in, thereby reducing carbon footprint.
Blockchain shall allow companies to benefit on the increasing demands of their consumers, investors, and employees, stakeholders and the entire supply chain at large to demonstrate sustainability in a responsible way. Thus providing both ecological and financial profits.
With off grid decentralized solar power distribution, blockchain is emerging an an major way forward for renewable energy sector. Through the nodes on the network buying and selling of less and surplus energy may be available in the form of digital tokens. References: 1. www.worldeforum.org/ 2. https://www.greenbiz.com/tag/blockchain .
