Blockchain in the maritime sector

3 minutes read

Climate change is often associated with rising temperatures and carbon emissions. And to combat it, our intuitive action is to plant trees and take public transport. We should rethink those instincts.

Research tells us that it would be more impactful to focus our attention on the oceans. The Intergovernmental Panel on Climate Change (IPCC): Special report on the ocean and cryosphere in a changing climate (2019) highlights that the oceans cover 71% of the Earth’s surface and contain 97% of the total water on Earth. The oceans are integral for the cycling of essential nutrients like carbon, nitrogen, and phosphorous. And account for over eight times the amount of primary productivity than land does (16 x 1010 tonnes) (Encyclopedia Britannica, 2021, IPCC 2019).

The Earth’s oceans are under attack. Surface temperatures are rising at an unprecedented rate. Causing the polar ice to melt and enormous amounts of water flow into the ocean basins, which degrades and erodes coastlines. The consequences are catastrophic, coastal communities will be underwater, natural habitats will be lost, and ecosystems harmed. 

The balance of carbon between the atmosphere and oceans is changing. As the acidity of the oceans increases, they become less inhabitable for many creatures, and the total diversity drops (IPCC, 2019). The oceans fuel life, drive chemical cycles, such as the uptake of nutrients and gases and global export and circulation (Sigman, 2012). By targeting the oceans, we can mitigate the future impacts of climate change. But there is no time to waste.

Blockchain and distributed ledger technologies are already streamlining our mitigation techniques in sectors such as energy, carbon finance, and even biodiversity. However, there are concerns that the energy requirement of blockchain technologies is too high to justify their use in climate change mitigation strategies. For example, the energy needed for the Bitcoin network alone could result in a global temperature increase of 2 °C by 2050 (Howson, 2020). But innovation is addressing these concerns. Climate conscious initiatives such as SolarCoin use blockchain to reward solar installations. And it is hoped that this approach can power blockchain and bitcoin development (Howson, 2020). These developments highlight the progress made, but where does that leave blockchain and the oceans?

Within the maritime industry, which is a fundamental part of the oceanic network, there have been blockchain developments in landing, shipping, smart contracts, marine insurance, financial investment, supply chain, and workflow (MI News Network, 2021). It is a positive start, breaking down barriers within the marine shipping industry and reducing carbon emissions. But more can be done with blockchain to combat the direct impacts of global warming on the ocean. There has been much success through having a collective database where all parties in the maritime and shipping industry have improved the decision-making time, security, and transparency (Crawford, n.d.). The main setbacks noted by the industry so far have been the complexity, where it becomes challenging to incorporate all of the working parts without intermediaries, especially concerning maritime insurance (Crawford, n.d.). 

These breakthroughs in shipping are huge, but they are met with concerns about the effect of climate change on biodiversity, the health of the oceans, and the planet as a whole. Distributive ledger technology could promote transparent access to wastewater and emission impacts and facilitate increased market access and commodity exchange (Howson, 2020). Not only would this successfully drive the maritime and marine economy but also regenerate the entire ecosystem (Crawford, n.d.). 

The future of blockchain is exciting as it has the potential to aid and regenerate some of the most beautiful places on our planet. In our last-ditch efforts to preserve our marine and terrestrial environments, cutting out the expensive intermediaries is a hurdle we need to overcome.

Sources:

  1. Crawford, S. (n.d.). How blockchain is reducing the fluidiity of risk in marine insurance. Retrieved from EY: https://www.ey.com/en_ca/blockchain/how-blockchain-is-reducing-fluidity-of-risk-in-marine-insurance
  2. Encyclopedia Britannica. (2021, February 17). Biological Productivity. Retrieved from Britannica: https://www.britannica.com/science/marine-ecosystem/Biological-productivity
  3. H.-O. Pörtner, D. R.-D. (2019). Summary for Policy Makers: Special Report on the Ocean and Crysophere in a Changing Climate. IPCC.
  4. Howson, P. (2020). Building trust and equity in marine conservtion and fisheries supply chain management with blockchain. Marine Policy.
  5. Karen Czachorowski, M. S. (2019). The Application of Blockchain Technology in the Maritime Industry. Springer Nature Switzerland AG.
  6. MI News Network. (2021, January 11). 7 Major Blockchain Technology Developments in Maritime Industry in 2018. Know More.
  7. Sigman, D. M. (2012). The Biological Productivity of the Ocean. Nature Education.

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