World Economic Forum launches coalition to use web3, blockchain for positive climate action
The World Economic Forum is launching a new public-private partnership to leverage web3 technologies to better support positive climate outcomes as awareness of blockchain technologies’ impact on the environment gains momentum.
The Switzerland-based non-governmental organization announced on Wednesday the Crypto Sustainability Coalition, consisting of 30 partners at the intersection of sustainable development and web3, crypto and blockchain technologies, during a panel held in the US
The coalition plans to support research and development, share best practices and influence regulation and includes interdisciplinary members ranging from the blockchain platform Solana, to sustainability-focused non-profit organizations such as the Climate Collective, to the University of Lisbon.
Cryptotechnology recently made strides in sustainability, with the Ethereum Merge, which reduced the energy consumption of the second largest blockchain. However, the industry as a whole is still energy intensive. Bitcoin, the largest cryptocurrency by market capitalization, has an annual carbon footprint matching that of Greece, and its energy consumption is comparable to the United Arab Emirates, according to the Digiconomist Bitcoin Energy Consumption Index.
“The goals and the ways that the crypto industry needs to decarbonize are quite complex,” Amy Westervelt, regional director of the Americas at Energy Web, said during the web conference. Energy Web builds decarbonisation-focused open source, decentralized operating systems. “I think we need cooperation from established NGOs, from climate scientists, utilities and from those industries that are on the ground, so that we make sure that these really innovative and unique tools that we have are used in the right direction,” Westervelt added.
When less is better
A primary function of the coalition will be to analyze the crypto industry’s consumption of energy, and materials, to better understand its impact on climate and nature. However, the group also plans to proactively investigate ways web3 can help countries achieve lower carbon emissions targets.
Blockchain technologies in particular are well-suited as a home for carbon credit markets, according to Josh Knauer, co-founder of ReSeed Carbon Assets and chair of the coalition’s carbon credits task force. Reseed Carbon Assets is a company that sells what it calls “ReSeed Carbon Protection Credits,” which are digital tokens that point to blocks of farmland where an estimated metric ton of carbon is stored in vegetation and soil.
Using satellite imagery and artificial intelligence, the buyer of a carbon protection credit can secure their ownership of the stored and protected carbon, with prices fluctuating in a free and decentralized market, according to the company’s website.
Knauer adds that the blockchain is inclusive and spreads the availability of carbon markets to even the world’s smallest farmers, forest managers and indigenous communities. “This technology can help create coordination, transparency and efficiency in systems, and can provide more insight and traceability when it comes to action, commitments and investments,” he said, adding that it helps ensure that farmers themselves are reasonably compensated and benefit when the price of carbon increases.
Greener Crypto Mining
In addition, the Crypto Sustainability Coalition seeks to support more efficient cryptocurrency mining as the industry uses enormous amounts of energy to perform transactions. However, miners’ decentralized and flexible nature could allow them to only run during peak energy times, when less of the power grid is being consumed by other sources, according to Lucia Gallardo, founder and CEO of EmergeFrance.
In addition, the waste heat from crypto mining machines can be recycled and offer a new business model for utilities and investors looking to develop microgrids for renewable energy, Gallardo said. EmergeFrance has been working with clients who want to recycle the heat that comes from crypto mining and turn it into a source to heat and power water systems for public facilities, she added.
Other key partners in the coalition include the information technology company Accenture, Ripple Labs, Inc., the company that develops the Ripple payment protocol and exchange network, and the environmental organization Rainforest Partnership. The coalition will work as part of the Crypto Impact and Sustainability Accelerator (CISA), a grant-funded initiative launched by the World Economic Forum at the beginning of this year to support knowledge about the environmental, social and governance (ESG) impacts of crypto technologies.
“We need open standards, we need open protocols, we need excellent debate and exchange, that’s what the scientific method is about, that’s what we’re here to pursue,” Knauer said, adding “then we need greater institutions like the World Economic Forum, like the Royal Bank, like commercial banks, like other investors to come in and help these solutions scale.”
