At the start of the year, WSP USA identified blockchain as one of the five sustainability and energy trends to watch in 2018 for its potential to improve energy management and increase transparency in the supply chain. One of the numerous ways that this powerful technology helps achieve sustainability goals is by increasing the availability of material and product environmental impact information by embedding life cycle assessment (LCA) results. There are also numerous applications of blockchain in the circular economy, in the achievement of sustainability goals and in the energy sector.
Within the realm of LCA, one application of blockchain is tracking the origins and movements of products. If these assets are also tagged with their environmental information, this can increase transparency of environmental impacts. One way to achieve this would be to include the results of Environmental Product Declarations (EPDs) in tracked information. Other types of environmental data, like carbon accounting information, can also be tracked with a public blockchain. This is similar to the work already being done to track conflict minerals through blockchain. The creation of an immutable ledger of sustainability information could be very powerful. The security and higher-level of confidence in the validity of data increase the potential rewards to suppliers for participating in blockchain platforms.
Blockchain is already being used to help achieve the Sustainable Development Goals (SDG), such as eliminating poverty and inequalities in monetary systems, and enabling access to credit for low-income individuals in developing countries. Moreover, blockchain increases the likelihood of adopting principles of the circular economy, which is relevant to the SDG No. 12 on Responsible Consumption and Production, by providing a tool to track materials and other types of assets—such as office space or machinery—to optimize their use. You can read more about how blockchain technology can help achieve the SDGs in an article authored by WSP’s Robbie Epsom, based in the UK.
In the energy sector, the applications of blockchain technology are numerous and have the potential to radically alter how markets function. Greentech Media (GTM) reported in March that more than 120 startups are focused on energy applications of blockchain, ranging from renewable energy tracking to electric vehicle charging. The majority are focused on transactive applications, such as peer-to-peer energy exchange.
Taking the market for renewable energy attributes as an example, there are many potential benefits of using blockchain. They include:
• reducing transaction costs by eliminating or decreasing the need for intermediaries
• increasing consistency in tracking and reporting standards across political and geographic boundaries, enabling more
granular tracking of renewable energy allowing greater participation by smaller generators and buyers
• reducing or eliminating duplicate claims of attributes
• embedding real-time data about energy generation, such as avoided carbon emissions
• automating secure transactions in real time to help with load balancing and avoiding curtailment of renewables
Most blockchain applications, however, are still in the pilot stage and these benefits will take years to be fully realized. After energy blockchain startups raised record amounts of funding earlier this year, Greentech Media (GTM) reports that investor interest has begun to slow as the challenges inherent to disrupting the energy sector become more apparent. Energy markets are heavily regulated and users of many new blockchain platforms must still determine how they can comply and integrate with incumbent systems.
Time will tell which blockchain applications survive to reshape the energy marketplace, but some teams are building for the long haul. In 2017, Rocky Mountain Institute launched the non-profit Energy Web Foundation (EWF) to accelerate the commercial deployment of blockchain technology in the energy sector. EWF plans to identify, document and assess the most promising use cases of blockchain technology in the energy sector and launch a new energy-focused blockchain platform—known as the “Energy Web Platform”—that provides the functionalities needed to implement these use cases at scale. Currently this platform exists as a test network, but the non-profit recently performed demonstrations of its Origin application, which uses blockchain to track ownership of renewable energy. EWF plans to launch a full application in 2019.
There are many cross-disciplinary ways in which blockchain could support sustainability. Using blockchain to avoid double-counting of renewable energy for instance would result in the increased accuracy of LCA results for GHG emissions and energy use and spur enhanced interest in and advancement of renewable energy overall. The opportunities to use blockchain to help organizations meet sustainability goals are immeasurable and continue to increase over time.
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