Blockchain and our natural habitat

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This article originally appeared in Times Malta

Amid the constant barrage of bad news on the environment and the regular studies depicting, ever more distinctly, how close we actually are to tipping our climate beyond a point of no return, a sparkle of positivity shone throughout the corridors of Brussels last week.

During a highly anticipated, all-night meeting, the EU’s environment ministers agreed to bold climate-related measures that go beyond their current emissions reduction targets. As a result of the meeting, the union and its member states have now committed to cut their greenhouse gas emissions by at least 55 per cent by 2030, when compared to 1990 levels.

This pledge was also accompanied by a renewed, broader and more ambitious update to the bloc’s proposed ‘Nationally Determined Contributions’ (NDCs); the efforts of each signatory to the UN’s Paris Agreement to reduce emissions. While largely insignificant when compared to the dire state that our planet finds itself in, this was a clear and unequivocal message that the union intends to be a global leader in the race to combat the effects of climate change.

Among a myriad of activities being conducted by the EU to try reach its climate goals is the recent adaptation in November of the legal framework on ‘forest reference levels’.

The adopted levels act as benchmarks that lay out the impact on the climate of each country’s forests and provide a mechanism to compare the member states’ activities in forest management.

Together, these are part in parcel of the EU’s ‘Land Use and Forestry’ regulation on limiting the practice of deforestation, and on incentivising countries, through planting more trees and managing and monitoring forests more effectively, to increase their carbon capture from the atmosphere.

Despite the limited size of Malta’s woodlands and the minimal implications these developments will tangibly have on our island’s natural habitat, this new framework is particularly pertinent for one of our country’s most prized technological expertise: ‘Blockchain’.

“Blockchain-based systems can be developed to ensure that forests are monitored and protected

Famously labelled the ‘Blockchain island’, the country’s distributed ledger technologies (DLT) legal structure is internationally recognised and designed to govern virtual financial assets, crypto-currencies and other relevant technology arrangements and services. But blockchain technology can be used outside its most popular function of trading Bitcoin or Ethereum, and instead be deployed to come up with innovative solutions to help address wider environmental challenges.

At its core, blockchain technology is essentially a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a network. An asset can be tangible (a house, a car, cash, land) or intangible (intellectual property, patents, copyrights, branding). Virtually anything of value can be tracked and traded on a blockchain network.

In this specific instance, blockchain-based systems can be developed to ensure that forests are monitored and protected. Specifically, Blockchain can provide governments with the capabilities to track changes to their country’s forests by securing and guaranteeing that land records are unalterable.

Furthermore, by using blockchain technology, countries will have greater visibility of their wood supply chains. Cryptographic labels can be applied to the wood itself or to the supply’s transportation, enabling a chain of tracking from the moment of application to the time it makes it to its final destination. Moreover, by programming scanners to identify a wood’s type and species, Blockchain technology can recognise and signal when illegally traded wood enters the supply chain. If wood is sourced from a black-flagged supplier, the batch would be automatically identified and highlighted.

In addition to the above uses of blockchain, the technology is poised to have an effect on and foster the development of activities in a range of other climate-related sectors, such as national greenhouse gas inventories, greenhouse gas market trading, climate finance, green bonds, renewable energy, and biodiversity, among others.

While blockchain is in no way the silver bullet to all our environmental problems, increased usage of the technology will help lead to greater transparency, a better understanding of the issues at hand and prompt action by the EU and the international community to find novel ways to fight the impacts of climate change.


Matthew Lowell, Deputy Director of Development (Institutional Engagement)

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