Building block(chain)s for a better planet

Fourth Industrial Revolution for the

Earth Series

Building block(chain)s

for a better planet

September 2018

Building block(chain)s for a better planet is published by the

World Economic Forum System Initiative on Shaping the

Future of Environment and Natural Resource Security in

partnership with PwC and the Stanford Woods Institute for

the Environment. It was made possible with funding from the

MAVA Foundation. It forms part of a series of reports from the

Fourth Industrial Revolution for the Earth project, run in

association with the World Economic Forum Centre for the

Fourth Industrial Revolution.

About the ‘Fourth Industrial Revolution for

the Earth’ series

The “Fourth Industrial Revolution for the Earth” is a

publication series highlighting opportunities to solve the

world’s most pressing environmental challenges by

harnessing technological innovations supported by new and

effective approaches to governance, financing and

multistakeholder collaboration.

About the World Economic Forum

The World Economic Forum, committed to improving the

state of the world, is the International Organization for Public-

Private Cooperation. The Forum engages the foremost

business, political and other leaders of society to shape global,

regional and industry agendas.

About PwC

With offices in 158 countries and more than 236,000 people,

PwC is among the leading professional services networks in

the world. We help organizations and individuals create the

value they’re looking for, by delivering quality in assurance,

tax and advisory services.

Building block(chain)s for a better planet

Contents

Preface ............................................................................................... 4

Foreword............................................................................................ 5

Executive Summary ........................................................................... 6

Our planet: The challenge and opportunity ....................................... 9

The building blocks: Overview of blockchain and its maturity ......... 12

The blockchain opportunity for our environment ............................. 16

Blockchain game changers for the Earth ......................................... 21

Blockchain blockers and unintended consequences ......................... 30

Conclusions and recommendations .................................................. 34

Acknowledgements .......................................................................... 40

Annex I: ........................................................................................... 41

Annex II: .......................................................................................... 42

Annex III: ......................................................................................... 43

Building block(chain)s for a better planet

Preface

The Fourth Industrial Revolution and the Earth

The majority of the world’s current environmental

problems can be traced back to industrialization,

particularly since the “great acceleration” in global

economic activity since the 1950s. While this delivered

impressive gains in human progress and prosperity, it

has also led to unintended consequences. Issues such as

climate change, unsafe levels of air pollution, depletion

of forestry, fishing and freshwater stocks, toxins in rivers

and soils, overflowing levels of waste on land and in

oceans, and loss of biodiversity and habitats are all

examples of the unintended consequences of

industrialization on our global environmental commons.

As the Fourth Industrial Revolution (4IR) gathers pace,

innovations are becoming faster, more efficient and

more widely accessible than ever before. Technology is

becoming increasingly connected, and we are now

seeing a convergence of the digital, physical and

biological realms. Emerging technologies, including the

Internet of Things (IoT), virtual reality and artificial

intelligence (AI), are enabling societal shifts as they

seismically affect economies, values, identities and

possibilities for future generations.

There is a unique opportunity to harness the Fourth

Industrial Revolution – and the societal changes it

triggers – to help address environmental issues and

transform how we manage our shared global

environment. Left unchecked, however, the Fourth

Industrial Revolution could have further unintended

negative consequences for our global commons. For

example, it could exacerbate existing threats to

environmental security by further depleting global

fishing stocks, biodiversity and resources. Furthermore,

it could create entirely new risks that will need to be

considered and managed, particularly in relation to the

collection and ownership of environmental data, the

extraction of resources and disposal of new materials,

and the impact of new advanced and automated

machines.

Harnessing these opportunities and proactively

managing these risks will require a transformation of the

current “enabling environment” for global environmental

management. This includes the governance frameworks

and policy protocols, investment and financing models,

the prevailing incentives for technology development,

and the nature of societal engagement. This

transformation will not happen automatically. It will

require proactive collaboration among policy-makers,

scientists, civil society, technology champions

and investors.

If we get it right, it could create a sustainability

revolution.

Working with experts from the environmental and

technology agenda, the “Fourth Industrial Revolution for

the Earth” project is producing a series of insight papers

designed to illustrate the potential of Fourth Industrial

Revolution innovations and their application to the

world’s most pressing environmental challenges.

Collectively and individually, these papers offer insights

into the emerging opportunities and risks of this fast-

moving agenda, highlighting the roles various actors

could play to ensure these technologies are harnessed

and scaled effectively. The papers are not intended to be

conclusive, but rather to act as a stimulant – providing

overviews that provoke further conversation among

diverse stakeholders about how new technologies driven

by the Fourth Industrial Revolution could play a

significant role in global efforts to build environmentally

sustainable economies, helping to provide foundations

for further collaborative work as this dynamic new

agenda evolves. This particular paper looks at blockchain

and the Earth. Previous papers in the “Fourth Industrial

Revolution for the Earth" series have looked at how the

Fourth Industrial Revolution could transform ocean

management, enable sustainable cities, and build an

inclusive bio-economy that preserves biodiversity, as

well as examining how artificial intelligence could be

harnessed to address economic, social and governance

challenges related to Earth systems.

Building block(chain)s for a better planet

Foreword

Blockchain

is a foundational emerging technology of the

Fourth Industrial Revolution, much like the internet was

for the previous (or third) industrial revolution. Its

defining features are its distributed and immutable

ledger and advanced cryptography, which enable the

transfer of a range of assets among parties securely and

inexpensively without third-party intermediaries. It is

also democratized by design – unlike the platform

companies of today’s internet – allowing participants in

the network to own a piece of the network by hosting a

node (a device on the blockchain). Blockchain is more

than just a tool to enable digital currencies. At its most

fundamental level, it is a new, decentralized and global

computational infrastructure that could transform many

existing processes in business, governance and society.

Blockchain has received considerable hype, ranging from

“cryptomania” in the trading markets in 2017 to

widespread discussions about the breadth and depth of

its potential impact across public and private sectors and

society in general. It has also invited scepticism related

to its scalability and the high-energy use of early

blockchain platforms.

As of early July 2018, the total

cryptocurrency market cap (spanning 1,629 currencies)

stands at about $254.67 billion.

As the architecture for

this transformational technology matures and as both

the blockchain hype and scepticism begin to rationalize,

there is a significant opportunity to shape how

blockchain is developed and deployed.

A number of blockchain applications and platforms are

becoming widely known, starting with Bitcoin, which

pioneered cryptocurrency (and crypto-assets), followed

by Ethereum, which as a platform for building

decentralized applications through smart contracts has

inspired a whole new “token economy”. The emergence

of applications in voting, digital identity, financing and

health illustrate how blockchain can potentially be used

to address global challenges.

There is now also

emerging enthusiasm about blockchain’s potential to

support global efforts to advance environmental

sustainability. To date, however, there has been little

appraisal of the use-cases or systematic orientation to

vital environmental opportunities and challenges, much

less of how to build the public-private collaborations and

platforms that will be needed to realize these nascent

opportunities.

This report focuses on the application of blockchain to

address pressing environmental challenges such as

climate change, biodiversity loss and water scarcity. It

looks at emerging applications, including those that

might be the biggest game changers in managing our

global environmental commons, while assessing the

potential challenges and developing recommendations to

address them. Some of these applications could

dramatically improve current systems and approaches,

while others could completely transform the way

humans interact with – and manage – our environmental

stability and natural resources.

Throughout this assessment, it is emphasized that the

potential for blockchain lies in its architectural ability to

shift, and potentially upend, traditional economic

systems – potentially transferring value from

shareholders to stakeholders as distributed solutions

increasingly take hold.

If harnessed in the right way, blockchain has significant

potential to enable a move to cleaner and more resource-

preserving decentralized solutions, unlock natural

capital and empower communities. This is particularly

important for the environment, where global commons

and non-financial value challenges are currently

so prevalent.

However, if history has taught us anything, it is that such

transformative changes will not happen automatically.

They will require deliberate collaboration between

diverse stakeholders ranging from technology industries

through to environmental policy-makers, underpinned

by new platforms that can support these stakeholders to

advance not just a technology application, but the

systems shift that will enable it to truly take hold. It is

our hope that the following overview of the

opportunities, risks and suggested next steps will

stimulate stakeholders to embark on an exciting new

action agenda that builds blockchains for a better planet.

Dr Celine Herweijer

Partner, PwC UK

Innovation and Sustainability Leader

Dominic Waughray

Head of the Centre for Global Public Goods,

World Economic Forum

Sheila Warren

Project Head, Blockchain and Distributed Ledger Technology

World Economic Forum’s Centre for the Fourth Industrial Revolution

Building block(chain)s for a better planet

Executive Summary

Background

Blockchain has the potential to transform how humans

transact. It is a decentralized electronic ledger system

that creates a cryptographically secure and immutable

record of any transaction of value, whether it be money,

goods, property, work or votes. This architecture can be

harnessed to facilitate peer-to-peer payments, manage

records, track physical objects and transfer value via

smart contracts.

This potential to fundamentally redefine how business,

governance and society operate has generated

considerable hype about blockchain. Despite this hype, it

remains a nascent technology with considerable

challenges that need to be overcome, from user trust and

adoption through to technology barriers (including

interoperability and scalability), security risks, legal

and regulatory challenges, and blockchain’s current

energy consumption.

However, as the technology matures and its application

across sectors and systems grows, there is both a

challenge and an opportunity to realize blockchain’s

potential – not just for finance or industry, but for people

and the planet. This opportunity comes at a critical

juncture in humanity’s development. As a result of the

“great acceleration” in human economic activity since the

mid-20th century, which has yielded impressive

improvements in human welfare, research from many

Earth-system scientists suggests that life on land could

now be entering a period of unprecedented

environmental systems change.

Fortunately, an opportunity is also emerging to harness

blockchain (and other innovations of the Fourth

Industrial Revolution) to address six of today’s most

pressing environmental challenges that demand

transformative action: climate change, natural disasters,

biodiversity loss, ocean-health deterioration, air

pollution and water scarcity. Many of these opportunities

extend far beyond “tech for good” considerations and are

connected to global economic, industrial and human

systems. Blockchain provides a strong potential to unlock

and monetize value that is currently embedded (but

unrealized) in environmental systems, and there is a

clear gap within the market. In the first quarter of 2018,

for example, 412 blockchain projects raised more than

$3.3 billion through initial coin offerings (ICOs).

Less

than 1% of these were in the energy and utilities sector,

representing around $100 million of investment, or

around just 3% of the total investment for the quarter.

Principal findings

Our research and analysis identified more than 65

existing and emerging blockchain use cases for the

environment through desk-based research and

interviews with a range of stakeholders at the forefront

of applying blockchain across industry, big tech,

entrepreneurs, research and government.

Blockchain use-case solutions that are particularly

relevant across environmental applications tend to

cluster around the following cross-cutting themes:

enabling the transition to cleaner and more efficient

decentralized systems; peer-to-peer trading of resources

or permits; supply-chain transparency and management;

new financing models for environmental outcomes; and

the realization of non-financial value and natural capital.

The report also identifies enormous potential to create

blockchain-enabled “game changers” that have the ability

to deliver transformative solutions to environmental

challenges. These game changers have the potential to

disrupt, or substantially optimize, the systems that are

critical to addressing many environmental challenges.

A high-level summary of those game changers is

outlined below:

•

“See-through” supply chains: blockchain can create

undeniable (and potentially unavoidable)

transparency in supply chains. Recording

transactional data throughout the supply chain on a

blockchain and establishing an immutable record of

provenance (i.e. origin) offers the potential for full

traceability of products from source to store.

Providing such transparency creates an opportunity

to optimize supply-and-demand management, build

resilience and ultimately enable more sustainable

production, logistics and consumer choice.

Building block(chain)s for a better planet

•

Decentralized and sustainable resource

management: blockchain can underpin a transition

to decentralized utility systems at scale. Platforms

could collate distributed data on resources (e.g.

household-level water and energy data from smart

sensors) to end the current asymmetry of information

that exists between stakeholders, enabling more

informed – and even decentralized – decision-making

regarding system design and management of

resources. This could include peer-to-peer

transactions, dynamic pricing and optimal demand-

supply balancing.

•

Raising the trillions – new sources of sustainable

finance: blockchain-enabled finance platforms could

potentially revolutionize access to capital and unlock

potential for new investors in projects that address

environmental challenges – from retail-level

investment in green infrastructure projects through

to enabling blended finance or charitable donations

for developing countries. On a broader level, there is

the potential for blockchain to facilitate a system shift

from shareholder to stakeholder value, and to expand

traditional financial capital accounting to also capture

social and environmental capital. Collectively, these

changes could help raise the trillions of dollars

needed to finance a shift to low-carbon and

environmentally sustainable economies.

•

Incentivizing circular economies: blockchain could

fundamentally change the way in which materials and

natural resources are valued and traded, incentivizing

individuals, companies and governments to unlock

financial value from things that are currently wasted,

discarded or treated as economically invaluable. This

could drive widespread behaviour change and help to

realize a truly circular economy.

•

Transforming carbon (and other environmental)

markets: blockchain platforms could be harnessed to

use cryptographic tokens with a tradable value to

optimize existing market platforms for carbon (or

other substances) and create new opportunities for

carbon credit transactions.

•

Next-gen sustainability monitoring, reporting and

verification: blockchain has the potential to

transform both sustainability reporting and

assurance, helping companies manage, demonstrate

and improve their performance, while enabling

consumers and investors to make better-informed

decisions. This could drive a new wave of

accountability and action, as this information filters

up to board-level managers and provides them with

a more complete picture for managing risk and

reward profiles.

•

Automatic disaster preparedness and

humanitarian relief: blockchain could underpin a

new shared system for multiple parties involved in

disaster preparedness and relief to improve the

efficiency, effectiveness, coordination and trust of

resources. An interoperable decentralized system

could enable the sharing of information (e.g.

individual relief activities transparent to all other

parties within the distributed network) and rapid

automated transactions via smart contracts. This

could improve efficiencies in the immediate aftermath

of disasters, which is the most critical time for

limiting loss of life and other human impacts.

•

Earth-management platforms: new blockchain-

enabled geospatial platforms, which enable a range of

value-based transactions, are in the early stages of

exploration and could monitor, manage and enable

market mechanisms that protect the global

environmental commons – from life on land to ocean

health. Such applications are further away in terms of

technical and logistical feasibility, but they remain

exciting to contemplate.

These game changers, and the more than 65 use cases

identified, offer the exciting potential to build a

sustainable future; however, as with many emerging

technologies, there are a number of risks to manage and

challenges to overcome. In broad terms, the challenges

relate to blockchain’s maturity as a technology,

regulatory and legal challenges, stakeholders’ trust in the

technology, and their willingness to invest and

participate in applications. Managing and overcoming

these risks and challenges will require stakeholders to

work together to develop solutions that are effective,

holistic, relevant and deployable. Currently, such

collaborative efforts are few in number, making it almost

impossible for stakeholders to fully harness the potential

opportunities that blockchain technology provides.

Harnessing blockchain technologies to drive sustainable

and resilient growth and a new wave of value creation

will require decisive action. The opportunities that

blockchain offers need to be developed and governed

wisely, with upfront and continual management of

unintended consequences and downside risks. A variety

of measures will be needed, from ensuring compliance

with privacy rights, improving security and clarifying

accountability in case things go wrong, through to

establishing standards for minimizing energy

consumption. These responsibilities are shared by all

stakeholders.

Building block(chain)s for a better planet

Establishing new global platforms or accelerators

focused on creating a “responsible blockchain

ecosystem”, rather than just incubating specific projects,

would be a valuable and much-needed next step. Such a

platform could support stakeholders from across

different sectors to develop effective blockchain

solutions for environmental challenges, help ensure

blockchain technology is sustainable (i.e. good for people

and the planet) and play a crucial role in building out the

necessary governance arrangements at industrial, state

and global levels.

Finally, today’s hype surrounding blockchain can lead to

the temptation to try to use blockchain to solve

everything. A reasoned and structured approach is

needed to help practitioners assess whether and how to

deploy blockchain for delivering new environmental

solutions. The following three broad principles should be

the starting point for any such assessment:

•

Will blockchain solve your actual problem?

Consider whether blockchain is actually needed to

solve the problem by clearly identifying what the

problem is and whether distributed ledger technology

is really needed to deliver your envisaged solution.

•

Can you acceptably manage the downside risks or

unintended consequences? Consider the risks and

challenges posed by a blockchain-enabled solution,

the technical and commercial feasibility of being able

to mitigate these and the likely time frames to

realize them.

•

Have you built the right ecosystem of

stakeholders? Blockchain’s value as a solution

multiplies when more players participate and when

stakeholders come together to cooperate on matters

of industry-wide or system-level importance. New

partnerships and opportunities are more likely to

emerge from multidisciplinary ecosystems.

Building block(chain)s for a better planet

Our planet: The challenge and opportunity

The challenge

From an anthropocentric perspective, the past century

(particularly the past few decades) of human existence

has marked a very successful period for population and

economic growth.

The “great acceleration”

in human activity, particularly

since the mid-20th century, has delivered exponential

economic growth. Real output grew five-fold in the four

centuries leading to 1900, before accelerating more than

20-fold in the 20th century.

The past 60 years and, in

particular, the past 25 years, have witnessed an

increased acceleration in human economic activity. The

recent past is an example of markets working to their

fullest extent, as technologies have driven progress and

real commodity prices have fallen, despite a 20-fold

increase in demand for certain resources.

The follow-on

effects have included impressive improvements in

human welfare as the number of people living on less

than $1.25 a day has been cut by one-half since 1990

and more than 700 million people have moved into the

global middle classes.

Yet, from an Earth-systems perspective, the human

success story is not so positive. The stress on the Earth’s

natural systems caused by human activity has worsened

considerably in the 25 years since the 1992 Rio de

Janeiro Earth Summit in Brazil.

Underpinning these extraordinary human advances has

been the consistently steady state of the Earth’s global

environmental systems provided by the so-called

“Holocene equilibrium”. Global patterns of temperature,

precipitation, seasonality and the overall health of our

atmosphere, cryosphere, hydrosphere and biosphere

have remained predictable for much of the past 10,000

years. During this period, they have functioned within a

“Goldilocks” zone – not too hot and not too cold – for

humans.

However, as a result of the great acceleration in human

economic activity since the mid-20th century, research

from many Earth-system scientists suggests that our

planetary systems could now be entering a period of

unprecedented environmental systems change. This

change can be observed across six critical challenge

areas, with implications for the planet and human

prosperity, and demands transformative action early in

the 21st century, as illustrated in Figure 1.

Building block(chain)s for a better planet

Figure 1: Global challenge areas

Building block(chain)s for a better planet

Over the coming decades, these six critical challenges are

set to intensify as global trends are expected to put an

increasing strain on finite resources. The current world

population of around 7 billion is expected to grow to

nearly 10 billion by 2050. As the world becomes more

populous and the global middle class grows in size, it will

increase the demand for energy, transport, food and

water. Under current approaches, as our consumption of

resources continues to rise, so do the levels of waste,

plastic and pollution. To put this in perspective, 8.3

billion tonnes of plastic have been created in the past

century, more than 70% of which is now in waste

streams. Alongside this, societies are under growing

social and economic strain from mounting inequality,

youth unemployment, the threat of automation and

geopolitical volatility. Many of these issues are

exacerbated by environmental deterioration.

While we have seen a progressive increase in

environmental interventions over the past four decades,

the breadth and depth of environmental challenges and

the pace with which they are evolving demonstrates the

need for governments, regulators and businesses to

adapt more quickly than before. Business as usual is

clearly not enough, and the evidence shows that progress

made over the past four decades has been insufficient for

the scale of the challenge.

The opportunity

While these challenges are urgent and extraordinary,

they also coincide with an era of unprecedented

innovation, technical change and global connectivity –

the Fourth Industrial Revolution.

This industrial revolution, unlike previous ones, is

underpinned by the established digital economy and is

based on rapid advances in technologies such as

blockchain, artificial intelligence, the Internet of Things,

robotics, autonomous vehicles, biotechnology,

nanotechnology and nascent quantum computing among

others. It is also characterized by the way in which the

combination of these technologies increasingly merges

the digital, physical and biological realms, and

collectively increases the speed, intelligence and

efficiency of business and societal processes.

The Fourth Industrial Revolution generates

opportunities for global growth and value creation that

far outstrip the advancements of the past century. Left

unguided, these advancements have the potential to

accelerate the environment’s degradation. However, they

also create an opportunity for governments, regulators

and companies to make the Fourth Industrial Revolution

the first sustainable industrial revolution by harnessing

these rapidly evolving technologies to overcome the

world’s most pressing environmental challenges.

Blockchain for the Earth

The Fourth Industrial Revolution includes a new phase of

blockchain-enabled innovation. The computational

architecture of blockchain technology creates a wide

range of potential uses. For example, by providing an

immutable, distributed ledger, it can help to facilitate

peer-to-peer payments, manage records, track physical

objects and transfer value via smart contracts, all without

a third party or manual reconciliation.

During 2017 and 2018, blockchain has received

considerable hype regarding its potential to create wide-

reaching impact, with proponents projecting that it could

account for as much as 10% of global GDP by 2025.

There has also been considerable scepticism with regard

to its performance and scalability that has thus far kept

crypto-networks from seriously disrupting centralized

systems. During the next few years, the focus will likely

be on fixing these technical limitations and addressing

regulatory and legal challenges. As the technology

matures, there is both a challenge and an opportunity to

realize blockchain’s potential – not just for finance or

industry, but for people and the planet.

This analysis explores the opportunity to harness

blockchain to address environmental challenges,

including climate change, loss of biosphere integrity and

water scarcity. Potential and emerging use-cases and

game-changing solutions are explored. Emerging

opportunities include the management of supply chains

and finite resources, enabling the financing of

environmental solutions and incentivizing behaviour

change.

The challenge is to unlock the potential in a way that

ensures inclusion, safety, interoperability and scale.

Whether or not the technology succeeds will not be

exclusively determined by its technical performance,

scalability and resilience. It will also depend on the level

of responsible development and adoption, and will

require fit-for-purpose and supportive new regulatory

and legal systems, investment landscapes and societal

understanding and acceptance.

Building block(chain)s for a better planet

The building blocks: Overview of blockchain and

its maturity

Blockchain basics

Figure 2: A look at blockchain technology

Source: PwC

Building block(chain)s for a better planet

Blockchain is a decentralized (distributed) electronic

ledger system that records any transaction of value

whether it be money, goods, property, work or votes.

It is also an interlinked and continuously expanding list

of records stored securely across a peer-to-peer

network.

Every participant with access can

simultaneously view information with no single point

of failure, creating trust in the system as a whole.

Each “block” is uniquely connected to the previous blocks

by including the hash

of the previous block in the new

block. Digital signatures are then used to authenticate

transactions. This structure means that making a change

without disturbing the subsequent records in the chain is

extremely difficult. These characteristics make blockchain

cryptographically secure and currently tamper-proof.

Verification of transactions is achieved by participants

confirming changes with one another, replacing the need

for a third party to authorize transactions. Decentralized

consensus makes blockchain platforms immutable, and

updatable only via consensus or agreement among peers.

This design is meant to protect against domination of the

network by any single computer or group of computers.

Blockchains can be public, private (permissioned) or

hybrid systems. Unlike public blockchains, whereby

transactions can be validated by anyone and there is no

access control – private blockchain participants or

validators must be authorized by the owners of the

blockchain. Between the two there are hybrid systems,

combining both private- and public-ledger

characteristics.

Why now?

Distributed computing and cryptography have both

existed for decades. However, in 2009 these ideas came

together in the form of Bitcoin: a cryptocurrency network.

Though initially slow to take hold, more recently there has

been a proliferation of its use and a rapid increase in the

number of transactions. As the world became enamoured

with Bitcoin, both large corporations (first financial

institutions, then others) and smaller-scale technology

entrepreneurs saw a bigger picture. The underlying

technology behind Bitcoin had the power to cut

intermediary and reconciliation costs and revolutionize

manual, frequently disjointed, opaque processes to

increase their efficiency. Thus, broader ideas and

conceptual applications for blockchain technology

emerged.

For example, the creation of Ethereum in 2015 (now a $25

billion crypto-network) showed that blockchain was more

than just a niche technology for the financial sector, but

also offered a new, decentralized, trusted and transparent

platform that could benefit a wider range of industries and

issues, with developers naturally seeking out areas where

it could add the most value.

As the volume of coders proficient in blockchain has

increased, start-ups and established corporations alike

have begun to invest in tools, data, people and

blockchain-enabled innovations. ICOs have also emerged

as a new crypto-based alternative to classic early-stage

capital/debt finance, creating opportunities to quickly

fund new blockchain technology ventures. This has

encouraged more investors, speculators and

entrepreneurs to take an interest in this emerging and

potentially powerful technology.

At the same time, a number of converging global trends

have helped to create an environment conducive to the

proliferation of blockchain. Increasingly, digitalization

and connectivity of the global economy, along with the

emergence of powerful global tech firms, has meant that

corporations have become increasingly open to adopting

blockchain and other emerging technologies of the

Fourth Industrial Revolution. Developments in computer

processing power and networked computer systems

have facilitated advances in blockchain programs, while

the domination of smartphones has made digital wallets

possible and increasingly relevant. Alongside this, there

has been a proliferation of IoT and AI applications that

can automate big-data collection and processing for use

in blockchain platforms.

Taken together, these advances in technology and an

emerging global enabling environment have created a

platform from which many blockchain applications are

now being launched.

Blockchain capabilities: now and in the future

It is worth noting that the technology itself is still very

new, and there is a considerable way to go to build trust

among businesses, investors and regulators in relation to

blockchain applications.

However, blockchain’s potential – and at least some of

the associated hype – stems from a combination of its

current capability and the anticipated technology

development roadmap, which suggest that as the

technology matures it could become a foundational

technology like the internet and could dramatically

improve operating efficiencies in some sectors while

completely disrupting others. Two of today’s most

prominent blockchain applications – cryptocurrencies

and smart contracts – illustrate this potential.

Cryptocurrencies are designed to be used as an

alternative to real currencies and to create new token

economies that, among other things, could capture and

monetize currently unrealized economic value, while

smart contracts use a digital protocol to automatically

execute predefined processes of a transaction without

requiring the involvement of a third party or

intermediary.

Building block(chain)s for a better planet

The next few years of blockchain will focus on fixing the

most severe technical limitations of blockchain networks’

performance and scalability, as these are limitations that

currently keep them from challenging centralized

incumbents. In particular, these limitations relate to

blockchain’s distributed verification protocols.

To avoid the use of an intermediary, blockchain

applications are characterized by a distributed

verification process, which is designed to achieve

consensus on the content of the distributed ledger. The

following two mechanisms are most commonly used for

verification of a transaction to establish consensus:

•

Proof of work (PoW): Each block is verified through

a process called “mining” before information is stored.

The data contained in each block is verified using

algorithms that attach a unique hash to each block

based on the information stored in it. Users

continuously verify the hashes of transactions

through the mining process in order to update the

current status of the blockchain assets. Doing so

requires an enormous number of random guesses,

making it a costly and energy-intensive process – one

that also faces speed constraints as the network

grows. Early blockchains such as Bitcoin use PoW

verification.

•

Proof of stake (PoS) – PoS simplifies the mining

process. Instead of mining, users can validate and

make changes to the blockchain on the basis of their

existing share (“stake”) in the currency. This

approach reduces the complexity of the decentralized

verification process and can thus deliver large savings

on energy and operating costs. Increasingly, emerging

blockchains such as Ethereum, NEO and WAVES use

PoS verification.

To date, PoW has been the most frequently used

verification method in conjunction with blockchain

technology. In light of concerns regarding cost, energy

intensity and scalability, however, emerging blockchain

applications rely increasingly on PoS and other less cost-

and energy-intensive verification methods. Recent and

emerging verification methods include (but are not

limited to) “proof of authority” (PoA), “proof of

importance” (PoI) and “proof of history” (PoH), which

are also deemed to be less cost-, energy- and time-

intensive (see Glossary for terms). Second-layer “proof of

stake” solutions currently being developed for the

Ethereum platform, such as Casper, Plasma and Sharding,

should address the fundamental scalability challenges of

Ethereum and pave the way for more innovative and

scalable protocols.

Once the networks that form the infrastructure layer of

the cryptostack are built, technologists will increasingly

turn their energy to building decentralized applications

(dApps) on top of this infrastructure. We are also likely

to see the emergence of numerous bespoke ledgers

customized for specific purposes. In parallel, there will

need to be a focus on developing fit-for-purpose

regulation, and on industry and multistakeholder efforts

to experiment, adopt and apply the technology, building

trust when doing so. The speed at which such technical

developments could unfold makes it crucial for the

notion of responsible blockchain to be rapidly adopted

by all stakeholders, in particular the burgeoning

developer community.

Like any new and evolving technology, further advances

in blockchain are difficult to predict accurately as the

technology (and its potential) are evolving so fast that it

can be hard to know how much of the hype will be

realized and, in turn, how exactly the broader enabling

market will mature. How far and how fast blockchain

evolves will be somewhat a function of how quickly (and

successfully) technical, regulatory, scalability and other

challenges – including trust – can be overcome (see

below). One area to watch will be the financial and social

incentives created as these will likely determine the

aspects on which developers focus and where

investment flows. We can also expect the most

transformational blockchain use-cases to emerge where

collaborative and multistakeholder ecosystems are built

to tackle matters of industry-wide or society-wide

importance – such as decentralized energy platforms.

Looking further afield, expected advances in AI,

distributed computing and quantum computing will

likely support – and potentially accelerate – blockchain’s

technological evolution. If it truly lives up to its promise,

this new global computational architecture could rewire

commerce and transform how society operates,

becoming one of the most significant innovations since

the creation of the internet. The opportunity to harness

this innovation to help tackle environmental challenges

is equally significant.

Building block(chain)s for a better planet

Figure 3: Timeline of blockchain developments

Source: PwC research

Building block(chain)s for a better planet

The blockchain opportunity for our

environment

While blockchain has the potential to become a powerful

foundational technology used across different sectors to

tackle a wide range of challenges and opportunities, if it

is to be truly transformative for our global environment,

it will need to be deployed in the right areas. Figure 4

highlights six of the world’s most pressing environmental

challenges and the priority action areas to successfully

address them.

Figure 4: Priority action areas for addressing Earth challenge areas

Source: PwC research

In meeting these challenges, there is wide scope for

innovation and investment. There is potential for

blockchain to provide solutions in and of itself and also

to facilitate solutions that involve other Fourth Industrial

Revolution technologies. Indeed, more than 65 existing

and emerging blockchain use cases for the environment

were identified through desk-based research and

interviews with a range of stakeholders from the

industrial, technological and entrepreneurial sectors, in

addition to research associations and governments.

Figure 5 provides a glimpse of such blockchain

applications by environmental challenge area. The

snapshots are not intended to be exhaustive, but to

provide an initial overview, represent the most

prominent innovations and stimulate a more concerted

action agenda.

These snapshots show that each environmental

challenge area stands to benefit from the use and

deployment of blockchain, and that the majority of

solutions operate by transforming an underlying

economic, industrial or governance system. Many of the

use-cases also represent opportunities to unlock and

monetize (or tokenize) economic value that is currently

embedded within environmental and natural resource

systems, but which has been largely unrealized to date.

Examples include opportunities to build an inclusive bio-

economy, capture the value of intact forests and create

new markets for trading natural resources.

Currently, the majority of use-cases identified are in the

concept or pilot phase, with only a handful having been

fully developed.

Building block(chain)s for a better planet

Climate change and biodiversity were the challenge areas

where most use-cases were identified, with fewer

developed in the areas of water resource management,

ocean management and clean air so far. Recent

investment figures highlight the largely untapped nature

of the opportunity. In the first quarter of 2018, for

example, 412 blockchain projects raised more than $3.3

billion through ICOs.

However, less than 1% of these

were in the energy and utilities sector, representing

around $100 million of investment, or around 3% of the

total investment for the quarter.

The more than 65 use case solutions identified as being

particularly relevant across environmental applications

tend to cluster around the following cross-cutting

themes:

•

Enabling decentralized systems

•

Peer-to-peer trading of natural resources or permits

•

Supply chain monitoring and origin tracking

•

New financing models, including democratizing

investment

•

Realization of non-financial value, including natural

capital

The challenge for innovators, investors and governments

is to identify and scale these pioneering innovations both

for people and the planet – while also making

sustainability considerations central to wider blockchain

development and use.

While blockchain-based solutions hold great promise,

there is also a lot of hype associated with the technology.

On its own, it is not necessarily transformational for the

environment. However, the potential of blockchain to

help solve environmental challenges can be amplified

exponentially when it is combined with other emerging

Fourth Industrial Revolution technologies such as AI, IoT,

drones, 3D printing and biotechnologies. When it is

applied this way – as a “cocktail mixer” for other

emerging technologies – blockchain starts to become a

truly game-changing technology. Some of those game-

changing examples, drawing on emerging use-cases in

Figure 5 below, are set out in the next section,

“Blockchain game changers for the Earth”.

Figure 5: Blockchain applications by challenge area

Climate change

Building block(chain)s for a better planet

Biodiversity and conservation

Healthy oceans

Building block(chain)s for a better planet

Water security

Clean air

Building block(chain)s for a better planet

Weather and disaster resilience

Source: PwC research

Building block(chain)s for a better planet

Blockchain game changers for the Earth

In addition to enhancing current efforts to address

environmental issues, there is enormous potential to

create blockchain-enabled “game changers” in which the

application of blockchain, often in combination with

other Fourth Industrial Revolution technologies, has the

potential to deliver transformative or disruptive

solutions.

The following set of potential game changers are defined

by five important features:

1. Transformational impact (i.e. it could completely

disrupt or alter current approaches)

2. Adoption potential (i.e. the potential population size

is significant)

3. Centrality of blockchain to the solution (i.e.

blockchain is a vital cog in the solution)

4. Systems impact (i.e. the game changer could really

shift the dial across human systems)

5. Realizable enabling environment, including

political and social dynamics (i.e. the enabling

environment can be identified and supported)

The eight most significant game changers are listed

below. Some of these are cross-cutting and more

overarching in nature (but clearly have significant

ramifications for environmental challenges), while others

focus more specifically on environmental challenges.

Although some of these game changers could improve

the efficiency of existing markets, others could drive

transformational shifts in how we operate and how we

tackle environmental challenges.

1. ‘See through’ supply chains

Transactional data throughout the supply chain can be

recorded through the blockchain and an immutable record

of provenance (i.e. origin) can be created, offering the

potential for full traceability of products from source to

store. Providing such transparency creates an opportunity

to optimize supply-and-demand management, build

resilience and ultimately enable more sustainable

production, logistics and consumption. There are a number

of potential applications, some of which are more

advanced and specifically address environmental

challenges.

Corporations are facing increasing regulatory,

reputational, investor and consumer pressure to address

supply chain risks, such as corruption, human rights

violations, modern slavery, gender-based violence, water

security and environmental degradation. An increasing

number of companies are responding with bold public

commitments – from 100% renewable energy use

zero deforestation,

conflict-free minerals or 100%

recycled material

pledges. However, global supply

chains are often complex and opaque, and companies

frequently struggle to implement their commitments or

showcase their achievements in the absence of better

visibility into their supply chains. Such provenance,

traceability and transparency of data across supply

chains is also critical to business management in a

broader sense – from improving enterprise-risk

management practices to enabling corporate disclosure

and reporting.

Blockchain-based solutions are providing, for the first

time, full transparency and traceability within the supply

chain. This can build confidence in legitimate operations,

expose illegal or unethical market trading or activities,

mitigate quality or safety problems, reduce

administrative costs, enable greater access to finance,

improve monitoring, verification and reporting, and

potentially help avoid litigation. As these solutions

become more mainstream, they will likely push

companies to be aware of their actions, and enable them

to clearly demonstrate responsible and ethical

operations in a cost- and time-efficient way. Better

corporate data will also enable investors and asset

managers to implement responsible investing practices

with improved effect.

Building block(chain)s for a better planet

Solutions that harness blockchain for supply-chain

management are some of the more advanced

applications currently observed that address

environmental challenges.

For example, in agriculture, blockchain has been used,

thanks to its ability to provide a verifiable record of

possession and transaction, to manage and authenticate

harvesting of resources to ensure sustainable practices.

The Instituto BVRio has developed an online trading

platform it has termed a “Responsible Timber Exchange”

to increase efficiency, transparency and reduce fraud and

corruption in timber trading.

In 2016, Provenance, a UK-based start-up, worked with

the International Pole and Line Association (IPLA) to

pilot a public blockchain tuna-tracing system from

Indonesia to consumers in the UK.

Similarly, Carrefour

Supermarkets have recently introduced an application

where customers can scan products to receive

information on a product’s source and production

processes. Ventures such as FishCoin are developing a

utility token tradable for mobile phone top-up minutes in

an attempt to incentivize fishers to provide information

on their catch. The data captured is then transferred

down the chain of custody until it reaches consumers.

Such data could also be invaluable for governments

seeking to better manage global fish stocks.

From a consumer angle, the complexity of supply chains

means that it is difficult for consumers to know how their

consumption habits and purchasing decisions are

affecting the environment, or the associated working and

living conditions along the supply chain. Using

blockchain tools to enable retailers and consumers to

transparently track products from source to shop floor

will enable more informed purchasing decisions.

Current barriers to scaling blockchain applications for

supply-chain traceability and management include: the

interoperability of blockchain solutions with existing

systems for supply-chain management; the lack of

supply-chain standards in place for blockchain solutions

or providers; the transactional capacity of blockchains

versus the capacity that big data from supply chains will

require; and the regulatory implications regarding data

security and privacy among participants.

An additional challenge is ensuring the reliability of

information entered on the blockchain – e.g. while

blockchain applications can track fish all the way from

the boat to the plate, they cannot guarantee they were

caught how and where the data claims. Other

technologies, such as satellite monitoring and handheld

DNA sequencers, could potentially help overcome this

concern.

Looking into the future, blockchain has the potential to

connect all stakeholders in a global supply chain – from

workers in factories through to logistics companies,

retailers, consumers, investors, NGOs and regulators –

under one platform. A platform that provides the data,

traceability, transparency and control or compliance

mechanism that the given user needs would be a truly

transformational proposition for workers in the informal

economy and consumers alike.

Spotlight on illegal fishing

There was explosive growth in the harvest of fish from

the ocean in the second half of the 20th century, as large

industrial ships ventured out from local waters to reach

every corner of the sea, trailing miles of hooks or nets

large enough to catch Boeing 747s. As a result, two-thirds

of the world’s fish stocks today are overexploited.

The

cost of mismanagement is high. A recent studsssy found

that reforming management of the world’s fisheries

could increase the total annual catch by 16 million

tonnes and increase annual profits by $53 billion, while

improving the health of ocean ecosystems.

One important challenge facing the industry is illegal,

unreported and unregulated (IUU) fishing. The Food and

Agriculture Organization of the United Nations (FAO)

estimates that approximately 20% of the global fish catch

is IUU – robbing governments and legitimate fishers of

up to $23 billion per year.

The appetite for tackling this

issue is clearly growing, with a number of related

initiatives emerging in recent years. These include the

Tuna 2020 Traceability Declaration

and the Global

Dialogue on Seafood Traceability.

Global markets could play a vital role in creating

incentives for better management by offering the

prospect of better prices and better market access for

fish that come from well-managed fisheries. The

potential of blockchain to help unlock this opportunity

has caught the attention of members of the global fishing

industry, global retailers and the Friends of Ocean

Action

network, which is convened by the United

Nations Secretary-General’s Envoy for the Ocean, Peter

Thomson, and Sweden’s Deputy Prime Minister, Isabella

Lövin, and is being explored for its capability, along

with other technologies, to enable the eradication of

IUU fishing.

Blockchain-enabled smart contracts could, for example,

potentially underpin innovative tenure arrangements

that give specific resource rights to communities or

fishers. Additionally, blockchain could be used to track a

fish from “bait to plate”, providing a transparent view of

the fish’s origin. This could be complemented by DNA

barcoding,

which allows the rapid identification of

seafood in trade by matching fish products to a

standardized genetic library for all fish species.

Building block(chain)s for a better planet

2. Decentralized and sustainable resource

management

Centralized utility systems can often struggle to match

supply and demand optimally, are prone to single points of

failure, and suffer from distribution losses and leaks across

the network. For energy, decarburization also relies on the

emergence of renewable distributed energy resources.

Blockchain could initiate a fundamental transition to

global distributed utility systems. Platforms could collate

distributed data on resources (e.g. household-level water

and energy data from smart sensors) to end the current

asymmetry of information that exists between

stakeholders, enabling more informed – and even

decentralized – decision-making in regards to system

design and management of resources. This could include

peer-to-peer transactions, dynamic pricing and optimal

demand-supply balancing. It would reduce intermediaries,

make systems more efficient, cost-effective and resilient,

and increase local sharing of resources to bolster efficient

use of resources, which in turn will make distributed

models more attractive.

Decentralized energy grids

Decentralized energy grids, linked to the emergence of

renewables and distributed generation sources around

the world, are a rapidly emerging phenomenon.

Decentralized energy grids have the potential to cut costs

at the same time as increasing energy efficiency,

improving reliability and supporting renewable energy

integration. Coordination issues across these grids,

however, remain largely unresolved. Blockchain can

provide the solution to these issues, using smart

contracts to optimize coordination, enabling genuinely

local markets for energy trading. For example,

installation of blockchain software with integrated smart

contracts, coupled with smart-meter technology, allows

for traceability and verification of energy sources,

efficient peer-to-peer trading, better balancing and

optimization of energy load and demand.

Peer-to-peer trading also has the potential to support

and bolster renewables uptake as well as minimizing the

need for energy companies, energy traders and payment

providers, and reducing energy transportation losses.

Furthermore, transactions can be securely and

automatically recorded, with smart contracts on a

blockchain establishing a transparent process that users

can trust, but with better protection against cyber-

attacks and without revealing personal information.

A network of companies using these types of solutions

has emerged, though most are currently at trial stage.

LO3 Energy and Siemens Digital Grid, for example, have

launched the Brooklyn Microgrid project,

an early

example of an open-source and scalable blockchain

platform for the energy sector. “Prosumers” (consumers

involved in the design, manufacture or development of a

product or service), generating their own solar energy

from rooftop panels, have been autonomously trading in

near-real time with customers (neighbours) in the local

Brooklyn market in New York.

Decentralized grids additionally have the capability to

build local energy resilience: for instance, through

rerouting power in response to a natural disaster, or in

areas around the world where energy scarcity is

prevalent. The Brooklyn Microgrid, for example, has a

built-in microgrid control system, enabling redirection of

electricity towards hospitals and community centres.

Looking further ahead, the global transition to electric

mobility could be integrated into decentralized energy

systems, further adding to energy-system storage and

demand-supply balancing. BlockCharge by RWE and

Slock.it are developing a mobile phone app, which links

to a blockchain-based network that allows electric

vehicle (EV) owners to charge their car via any charging

station network and to be billed for the energy

consumed.

The EVs interact automatically with the

stations, and the electricity payment process is

autonomous. This type of charging information, for

regions and in aggregate, can help increase the

management and optimization of decentralized grid

solutions.

Decentralized water

Blockchain, combined with other Fourth Industrial

Revolution technologies, could enable a step-change in

the optimization of distributed water management. Real-

time transparent data on water quality and quantity can

inform conservation, dynamic pricing and trading, and

spot illegal extraction or water tampering.

Blockchain could become a core part of the solution to

enable “off-grid” water resources, analogous to

decentralized energy systems.

Building block(chain)s for a better planet

Household smart meters can produce large volumes of

data that can be used to predict water flows, spot

inconsistencies and check leaks. Blockchain technology

could also support peer-to-peer trading of water rights in

a given basin, allowing water users willing to share their

excess resources to become “prosumers” without relying

on a centralized authority. The next stage will be to

combine blockchain with machine learning and the

internet of things to create a truly decentralized water

system where local resources and closed-loop water-

recycling gain value.

Realizing fully decentralized utility solutions will require

sufficient regulation to assure the security and integrity

of the software, ownership and control of intellectual

property rights and the transferring and trading of

resources, which, in some instances, will be virtual.

These are surmountable challenges and the reward is the

critical transition of utility infrastructure and markets to

a decentralized, decarbonized and more water-secure

future.

Spotlight on new energy management platforms

The transition to low-carbon energy systems will be

critical in enabling governments to meet their climate

commitments as part of the 2015 Paris Agreement on

climate change. Scaling up the amount of renewable

energy generated in the global energy mix is a central

part of this transition. However, integrating high

percentages of renewable energy such as solar and wind

into traditional energy grids can present challenges to

their stability and predictability. This is largely because

renewable energy can be intermittent and is often

generated from smaller-scale and less centralized

sources than traditional fossil-fuel generators. To

facilitate the generation and distribution of renewable

energy at the scale needed, a range of transactive energy

technologies enabling electricity storage, energy trading,

demand forecasting and management, will need to be

integrated into new, intelligent “smart grids”. Blockchain

offers exciting potential to help knit such technologies

and grids together.

To help progress these solutions, Grid Singularity and the

Rocky Mountain Institute founded the Energy Web

Foundation (EWF),

with an ecosystem of large utility,

information and communication technology (ICT),

energy and blockchain partners, including those bringing

blockchain-based energy trading to real-world markets.

The foundation is a global open-source, scalable

blockchain platform designed specifically for the energy

sector. It is currently in beta release and allows

companies to develop and test applications to support,

for example, micropayment channels, data analysis and

benchmarking, certificates of origin, smart and microgrid

management, renewable energy procurement and

trading, electric-vehicle charging and demand response.

Platform innovations include a more energy-efficient,

decentralized proof of authority (PoA) protocol, a secret

transaction feature to encrypt smart contracts and

protect personal data, and a light-client version for small

IoT devices to overcome potential platform-scaling

issues.

As government-mandated targets for renewable energy

supply and corporate commitments for sourcing

renewable energy

increase, there is also a growing

need to verify purchases of such “green” electricity. In

electricity grids that draw from both renewable and non-

renewable energy sources, electrons from renewables

are indistinguishable from electrons generated from

fossil fuels. Because of this, a secondary market can exist

to represent the environmental and social benefits of the

electricity purchases through Certificates of Origin (also

termed Renewable Energy Credits or Guarantees of

Origin). However, the system for buying such certificates

is often a complex process, with many organizations

acting as intermediaries, which adds a time, labour and

cost burden to the process, and can breed a lack of trust

as to whether they were accurately counted and traded.

Blockchain’s ability to enable verification, traceability

and transparency could significantly streamline this

complex process and introduce confidence into the

market. It could also reduce the barriers to entry for

smaller organizations, encouraging further participation

in markets for Certificates of Origin and helping to grow

demand for renewable electricity.

3. Raising the trillions: new sources of sustainable

finance

The UN estimates that there is a funding gap of $5 to $7

trillion per year to meet the SDGs, with an investment gap

in developing countries of about $2.5 trillion.

Employing

blockchain-enabled finance platforms could potentially

revolutionize access to capital and unlock potential for

new investors in projects that address environmental

challenges – from retail-level investment in green

infrastructure projects through to charitable donations for

developing countries.

Blockchain-enabled platforms could be employed to

unlock access to capital. Its ability to seamlessly manage

complex financing environments means it can integrate a

wide number of stakeholders, making it feasible for

projects and ventures to crowdsource funds from a large

number of diverse investors rather than just several

large investors. Regardless of the number of investors,

the decentralized framework could also significantly

increase efficiency and lower transaction costs, both

formal and informal.

The “tokenization” of financial investments opens up this

opportunity for a wider group of stakeholders to invest.

Investors with larger amounts of capital would share the

Building block(chain)s for a better planet

same automated process as investors with very small

amounts of capital; therefore, access and entry

requirements are democratized. This will remove the

need for third parties and could enable projects that

attempt to tackle environmental challenges to access

capital quickly, without being delayed by the red tape

that is often a part of doing business with big institutions.

Early applications have emerged. The Sun Exchange

launched a blockchain-based platform for crowdselling

solar assets, connecting people who want to invest in

solar with those who want access to it. This enables

financing of solar projects in sub-Saharan Africa, where

high upfront costs and political barriers can prevent

financing from traditional investment-capital sources,

which inhibits widespread deployment. In addition, the

decentralized platform facilitates cross-border

investments and repayments (avoiding exchange fees

associated with national currency). A further example is

the Clean Water Coin, which uses a blockchain platform

to quickly and efficiently raise funds for clean-water

projects worldwide.

Other nascent projects are looking

at tokenizing carbon credits (e.g. Poseidon), while the

Natural Asset Exchange blockchain platform and its

Earth Token cryptocurrency aims to create a Natural

Asset Marketplace that connects certified producers of

natural capital assets with consumers of these assets.

Looking ahead, blockchain could be a real game changer

for “blended finance” investment in projects seeking to

deliver the UN’s Sustainable Development Goals. A

platform could efficiently facilitate the complexity of such

transactions where different types of funding, traditional

and non-traditional assets, and multiple stakeholders

with multiple requirements are involved.

The overall “token economy” created by the proliferation

of crypto-networks is still in its infancy. Quality projects

represent only a small proportion of all the blockchain

projects that have been created to date, but the

possibility to finance projects and practices that have a

positive environmental benefit is just beginning to be

demonstrated.

4. Incentivizing circular economies

Today, 90 billion tonnes of resources are extracted every

year to meet consumption demands and that number is

expected to more than double by 2050. Estimates also

predict that by 2050 there will be more plastic waste in the

oceans than fish. If harnessed in the right way, blockchain

could fundamentally change the way that materials and

natural resources are valued, incentivizing individuals,

companies and governments to unlock financial value

from things that are currently wasted, discarded or

treated as economically invaluable. This could drive

widespread behaviour change and help to realize a truly

circular economy.

Early-stage blockchain applications are being developed

to reward individuals or companies with cryptocurrency

credits that represent value, in return for sustainable

actions (e.g. collection of ocean plastic, recycling or water

conservation).For example, Plastic Bank has created a

social enterprise that issues a financial reward in the

form of a cryptographic token in exchange for depositing

collected ocean recyclables such as plastic containers,

cans or bottles.

Tokens can be exchanged for goods

including food, water, etc. RecycleToCoin is another

blockchain application in development that will enable

people to return their used plastic containers in

exchange for a token from automated machines in

Europe and around the world.

Similar mechanisms can be deployed or created for re-

incentivizing markets for food, water, forests and

conservation activities, even if investors have lower

expectations of a financial return. Gainforest is an

example of “crypto-conservation”, using smart contracts

to incentivize farmers in the Amazon to preserve the

rainforest in return for internationally crowdfunded

financial rewards. Remote sensing using satellites

verifies the preservation of a patch of forest, which then

triggers a smart contract using blockchain technology to

transfer payment.

The potential extends beyond merely changing

behaviour and could also incentivize companies to

design and manufacture products in ways that make it

easier to manage the product lifecycle and to reharvest

materials and unlock their embedded value.

Another potential application of blockchain in

incentivizing the move towards a circular economy

involves its use in more traditional systems of waste

management. For example, extended producer

responsibility (EPR) systems incentivize the recycling of

waste by transferring a fee paid at the point of purchase

to recyclers in order to subsidize the cost of recycling

non-profitable or even toxic materials found in products

such as electronic waste. Smart contracts based on

blockchain technology could dramatically increase the

transparency, scalability and efficiency of this process

allowing for uptake in markets where the costs of setting

up EPR systems have been prohibitively high and trust in

the system is low. Coalitions of companies, governments

and international organizations are exploring this use-

case.

An important challenge in scaling these applications will

be the level of public understanding of blockchain

technology, and the willingness to use it. Poor usability

for retail-level users is often cited as a weakness of

existing blockchain platforms and, until this is addressed,

it is difficult to see widespread adoption and use of these

initiatives.

Building block(chain)s for a better planet

Spotlight on global soft commodity value chains

The destruction of forests destroys biodiversity and

creates almost as many greenhouse gas emissions as

global road travel, and yet it continues at an alarming

rate, with an area equivalent to the size of South Africa

lost between 1990 and 2015.

In addition to the environmental degradation, it poses a

risk to many global supply chains, particularly those

related to consumer products. Research by CDP found

that in 2017 up to $941 billion of turnover in publicly

listed companies was dependent on commodities linked

to deforestation.

The production of soft commodities, in

particular beef, soy and palm oil, has the largest impact

on tropical forests, accounting for 36% of tropical

deforestation.

In response, a movement has emerged to halt, by 2020,

the deforestation embedded in global agricultural supply

chains. For example, the Consumer Goods Forum (CGF)

pledged to achieve zero-net deforestation by 2020 from

beef, soy, palm oil, pulp and paper supply chains, while

more than 190 governments, non-government

organizations and corporations signed the New York

Declaration on Forests, committing to eliminate all

deforestation driven by agricultural commodities by

2020. The US government and Consumer Goods Forum

established a new platform dedicated to helping

organizations achieve their deforestation-free

commitments – the Tropical Forest Alliance 2020 (TFA

2020).

Now funded by the governments of Norway, the United

Kingdom and the Netherlands, the TFA 2020 has

identified ten priorities for stopping deforestation from

commodity supply chains.

Of the ten, blockchain could

potentially support progress in six of them: eliminating

illegality from supply chains; developing and

strengthening palm oil certification; addressing land

conflicts, tenure security and land rights; mobilizing

demand for deforestation-free commodities in emerging

markets; redirecting finance towards deforestation-free

supply chains; and improving the quality and availability

of deforestation and supply chain data.

A number of initiatives have emerged to use blockchain

as part of anti-deforestation efforts. These relate

primarily to improving the tracking of carbon credits,

enabling peer-to-peer carbon trading, and boosting

transparency and auditability of commodity supply

chains linked to deforestation.

Blockchain could also support efforts to certify the

sustainability of smallholder farmers, potentially

enhancing the value of their products. For example, the

Programme for the Endorsement of Forestry

Certification is exploring blockchain for tracing wood

products

and IBM has partnered with Veridium Labs to

turn Borneo rainforest carbon credits into a crypto token

that can be traded on a decentralized exchange. Analysts

estimate that around $4.8 billion was spent in the past

ten years on private-market carbon credits and the

initiative could make it easier and cheaper for companies

to acquire and trade carbon credits and to account for

their environmental footprint.

5. Transforming carbon (and other environmental)

markets

While many economists argue that market-based

approaches are an efficient and effective way to manage

environmental challenges which stem from current market

externalities and failures (e.g. climate change, ozone-

depleting HFCs, chemical pollution and water

misallocation and scarcity), many of these market-based

approaches (e.g. carbon markets) are still in their early

stages of evolution, with differing standards and

regulations. Blockchain platforms could be harnessed to

use cryptographic tokens with a tradable value to optimize

existing credit management platforms for carbon (or other

substances) and create new opportunities for carbon

credit transactions.

Since the inception of carbon trading, there has been

scepticism over its lack of transaction visibility and

traceability, differing standards and regulations across

jurisdictions, and the potential for double counting.

Managing carbon markets on the blockchain has the

potential to create efficiency in platforms, and remove

many of the carbon transaction constraints. An early

pilot example is China’s “Carbon Credit Management

Platform”, developed by Energy-Blockchain Labs and

IBM. The intent is that, with the introduction of smart

contracts, the transparency, auditability and credibility

of the Chinese carbon market can be increased. If

successful, the approach could be broadened to other

carbon markets around the world.

In jurisdictions that prefer a “cap and trade” carbon-

trading system, a blockchain application could

potentially be used to automatically align license

creation, thus avoiding an over- or undersupply of

certificates, and thereby keeping market prices in a

policy-agreed predefined range without the need for

emergency or reactive interventions.

Building block(chain)s for a better planet

Currently, the trade in verifiable carbon-credit

transactions is constrained by economies of scale. While

verified carbon offsets are typically traded and verified in

bulk amounts on the voluntary carbon market, the

introduction of blockchain solutions enables carbon

offsets to be attached at a microscale to individual

products. Ben & Jerry’s is piloting a blockchain platform

to assign a carbon-credit price to each tub of ice cream

sold, allowing consumers to offset their carbon

footprint.

Poseidon is another company that has

developed a platform which enables consumers to offset

their carbon.

Payment will go directly to one of

Ecosphere+'s forest conservation projects – the retailer’s

POS system shows the carbon impact of a product (KG)

and adds the price for the required carbon offset to the

customer’s bill.

Looking further ahead, it is possible that regional or

global carbon markets could be created where

individuals or households could trade carbon allocations.

Individuals who wanted to consume more carbon-

intensive products or services would pay for the

privilege by buying scarce credits from others, or by

purchasing offsets, so that the overall impact on the

planet would stay constant and within agreed global

parameters.

Spotlight on inefficiencies in the water sector

For seven consecutive years, water has ranked among

the top five global risks in the World Economic Forum’s

annual Global Risks Report. Over this period of time, as

other risks have emerged and disappeared – including

the financial crisis and chronic diseases – water has

stubbornly remained. While the core challenges are well

known, and much progress has indeed been made,

solving the water challenge has continued to elude the

best and brightest decision-makers in the world.

Today, 60% of the world’s population, or about 4 billion

people, live in areas of near-permanent water stress.

Climate change is forecast to make water supply more

erratic and unpredictable, costing regions such as the

Middle East and Africa up to 6% of their GDP by 2050

due to water-related impacts on agriculture, health and

incomes, while also disrupting continuity across global

economic value chains.

While complicated political realities and a lack of

investment have inhibited progress, they have typically

been underpinned by an asymmetry of information

leading to inefficiencies in the allocation of water

resources. Blockchain technologies could help address

these challenges.

For example, blockchain applications could enable

households, industry consumers, water managers and

policy-makers to access the same data on water quality

and quantity and make more informed decisions. Such

transparency could help inform consumer decisions

around when to conserve or use water. It would also

ensure authorities determining water allocations are

able to be more data-driven, while also mitigating

corrupt behaviour in situations where there may be an

incentive for local authorities to tamper with or withhold

water-quality data.

Blockchain technology could also support peer-to-peer

trading of water rights in a given basin, allowing water

users who have enough or are willing to share their

excess water resources with others in the area to do so

without relying on an intermediary or centralized

authority.

A new collaborative platform, Water Security Rewired, is

supporting a range of stakeholders including the World

Bank’s Water Global Practice, governments, development

agencies, NGOs and other existing initiatives, technology

companies and innovators, and global companies from

the ICT, infrastructure, consumer, beverage and

agricultural industries. It seeks to harness the potential

of blockchain and other technologies of the Fourth

Industrial Revolution to overcome the current

asymmetry of information and allocative inefficiencies,

along with other challenges facing the water sector.

6. Next-gen sustainability monitoring, reporting

and verification

Corporations face increasing pressure from investors,

consumers, governments and regulators to demonstrate

sustainable business models and, in parallel, to prove their

environmental credentials. Their sustainability reporting

and external assurance of their environmental

performance is, therefore, an increasingly important

aspect of good corporate management. Blockchain has the

potential to transform both sustainability reporting and

assurance, helping companies manage, demonstrate and

improve their performance, while enabling consumers and

investors to make better-informed decisions.

Blockchain has the power to enhance corporate

reporting by enabling the independent sourcing and

verification of company performance beyond the self-

reported data often currently reported. This broader

assessment would provide shareholders and other

stakeholders with a more realistic view of companies’

performance and impact.

In turn, stakeholders can then

be rewarded – coupled with cryptocurrency incentives –

for providing and verifying that data: for example,

organic farmers in a company’s supply chain verifying

their interactions with a company. These methods could

act to incentivize governments and corporations to

Building block(chain)s for a better planet

deliver on reporting and other environmental strategic

objectives. Furthermore, if combined with third-party

measurement and verification tools (e.g. advanced

satellites and sensors), this would provide independent

and accurate information to support an entity's

management and investor decisions, improving market

efficiency and providing incentives to drive change.

Blockchain applications are also being developed to

support third-party assurance of sustainability

reporting.

There is ongoing research and piloting of

applications that collate data from certification bodies in

a single ledger in order to increase transparency and

data authenticity. Automatic data collection and

management (e.g. of GHG emissions) could be realized

through smart contracts in order to access real-time,

trustworthy data and minimize fraud. Improved GHG

accounting via the blockchain could increase the

effectiveness of carbon taxation as performance is

contingent on transparent and trustworthy GHG

emissions data.

An important challenge here will be the willingness of

organizations to report and store often sensitive data on

a decentralized network. Though deemed secure when

data is stored via a private key, hacking could expose this

information to sources across the network.

7. Automatic disaster preparedness and

humanitarian relief

As the frequency and scale of natural catastrophes

increases, in part due to a changing climate, there is an

increasing need both to prepare for when foreseeable

natural disasters strike and to manage better real-time

relief responses, e.g. coordinating and financing rapid

support and supplies to people and areas where the need is

greatest. Blockchain solutions could be transformational

in terms of their ability to improve disaster preparedness

and relief effectiveness

Blockchain solutions are starting to be developed to

realize Fourth Industrial Revolution-enabled disaster

preparedness. IBM, for example, is spearheading a new

initiative called “Call for Code”, working with the

American Red Cross, to invite developers to create new

applications to help people and communities better

prepare for natural disasters.

Concept-stage blockchain solutions are being proposed

to mobilize public and private organizations to

coordinate real-time disaster relief, matching community

needs with least-cost suppliers. For example, connecting

suppliers of clean drinking water with the helicopter

pilots delivering that water could help ensure that

deliveries are scheduled at specific locations within

certain time frames.

To enable this solution, smart-contract technology can

determine which contract offer is the best one available

based on the delivery needs of the community, including

quantity, price, timing and location. The smart contract

can trigger acceptance of the offer, and set in motion the

delivery as well as confirming the delivery has taken

place. SAP is involved in working on, and promoting,

these types of “pooling and sharing” solutions, which

could fundamentally shift how public and private

organizations can be mobilized in the event of a natural

disaster.

An important challenge here will be to integrate disaster

preparedness and relief platforms into existing early-

warning and mobilization systems, across both public

and private entities. Ensuring adequate trust and

resolving intellectual property (IP) and data privacy

issues will be particularly important. Further challenges

might arise in developing countries where IT systems

might not yet be Fourth Industrial Revolution-

compatible without significant investment and upgrades.

8. Earth management platforms

Many of our Earth’s natural systems are under

unprecedented stress with planetary boundary conditions

surpassed,

or close to be being breached, in several areas.

Blockchain may be able to facilitate the collation,

monitoring and management of vast quantities of Earth-

system data in a geospatial digital ledger. Once scalability

has been achieved, using current capabilities, it could

enable secure and trusted transactions that create value

across geographies and environmental domains. New

blockchain-enabled geospatial platforms are in the early

stages of exploration and could monitor, manage and

enable market mechanisms that protect the global

environmental commons – from life on land to ocean

health. Such applications are further away in terms of

technical and logistical feasibility, but they remain exciting

to contemplate.

Early efforts are under way to collect, manage and

transact data for managing environmental habitats,

including cataloguing the genetic biodiversity of species

and habitats to inform conservation efforts (for both

marine and land habitats). For instance, the Amazon

Third Way initiative is developing the Earth Bank of

Codes (EBC).

This is a project to create an open, global,

public-good digital platform that registers nature’s

assets, recording their spatial and temporal

provenance

(see break-out box: Spotlight on the

bio-economy).

Building block(chain)s for a better planet

In terms of the ocean, a global ocean data platform is

being developed to simplify free data access, enabling

unbiased research and facilitating a data-driven debate.

This open platform will allow any stakeholder to

prioritize future roadmaps and strategies based on ocean

health, providing comprehensive monitoring of ocean

resources. Integrating blockchain technology with such a

platform could further secure and enforce fishing rights

and ease broader transactions, enabling better

monitoring and response mechanisms.

On land, the security of property rights is an important

issue and has implications for both human welfare and

conservation. Land, therefore, appears to be a fruitful

area in which to deploy blockchain. For example, in

Brazil, fraud in the country’s antiquated land-titling

system has enabled swathes of Amazon rainforest to be

cut down for soy and beef farming. Here, blockchain is

being touted as a possible route to strengthen property

rights.

Blockchain platforms are also being trialled for the

observation of environmental conditions, including

pollution levels and weather conditions. Coupled with

data collection from decentralized data sources (e.g.

home sensors or wearable technologies), these projects

aim to increase the accuracy and granularity of

monitoring and, in combination with other technologies,

can improve the performance of forecasting and risk

mitigation.

Given the scale and complexity of the platforms

envisaged, new forms of public-private collaboration will

be required to ensure trust, governance and accuracy.

Navigating cross-jurisdictional regulations will also be

important given the transboundary nature of many of

these “global commons” efforts. Projects operating in this

space will also need to be clear about when a blockchain-

based database is needed and when a standard digital

database will suffice. Such digital databases still tend to

be cheaper and more energy efficient to operate.

Spotlight on the bio-economy

Earth’s biological assets are under unprecedented threat,

with one in five species on Earth now facing extinction.

One particularly vulnerable area is the Amazon Basin,

which is home to around half of the world’s remaining

tropical forests and a significant proportion of land

ecosystems and biodiversity. Due to a combination of

deforestation, forest fires and climate change, up to 60%

of the Amazon forest could be transformed to degraded

savannah by 2050.

Already, the Amazon Basin has

experienced megadroughts in 2005 and 2010 and

megafloods in 2009 and 2012.

These contrasting extreme-weather events and

disruptions are already having a significant social and

economic impact. For example, the GDP of the Amazon

Basin is currently estimated at a sizeable $250 billion per

year.

Emerging technologies have the potential to

create a new funding stream for conservation and

sustainable development efforts, which can also support

the livelihoods of local communities that depend on

Earth’s natural resources. Early efforts are under way to

collect, manage and transact data for managing

environmental (both marine and land) habitats.

By combining distributed ledger technologies, AI,

advanced sensors and the Internet of Things, for

example, the Amazon Third Way initiative is developing

the Earth Bank of Codes (EBC).

This is a project to

create an open, global, public-good, digital platform that

registers nature’s assets, recording their spatial and

temporal provenance. By registering biological and

biomimetic IP assets – while the expected volume of data

amassed is not appropriate for blockchain technology in

its current state – this code bank could record the

provenance, rights and obligations associated with

nature’s assets. When value is created from accessing

these assets, smart contracts could facilitate the fair

sharing of benefits to the custodians of nature and for its

protection.

The implications for governments, companies, research

institutes and communities are far-reaching: for example,

to support scientific discovery, bolster efforts to seek

new solutions to incurable diseases, encourage bio-

inspired innovations and improve conservation

outcomes. Countries with valuable natural assets would

also have an additional source of income to help protect

these resources, supporting indigenous and traditional

communities. More broadly, the ability to unlock the

value of these assets would provide a new (economic)

incentive to protect, rather than destroy, natural

habitats. Overall, the EBC has the potential to drive a

new, more inclusive bio-economy, creating new markets

for sustainably sourced innovation and helping to

implement the Convention of Biodiversity’s Nagoya

Protocol on Access and Benefit Sharing.

Building block(chain)s for a better planet

Blockchain blockers and unintended

consequences

Blockchain risks and challenges to widespread

deployment

While blockchain offers exciting potential in terms of

building a sustainable future, as with many emerging

technologies, there are a number of risks to manage and

challenges to overcome in order to harness its full

capabilities in addressing environmental challenges.

Broadly speaking, these challenges relate to blockchain’s

maturity as a technology, stakeholders’ trust in the

technology and the blockchain network, and their

willingness to invest in applications.

For example,

doubts exist about blockchain’s reliability, speed,

security and scalability. Managing and overcoming the

following risks and challenges will require stakeholders

to work together to develop solutions that are effective,

holistic, relevant and deployable.

Figure 6: High-level summary of blockchain risks and challenges

Source: PwC research

Adoption challenges

In order to be transformative in tackling global

environmental issues, blockchain applications will need

to be able to scale up effectively, gaining widespread

industry and user adoption.

The usability of the technology is currently a crucial

barrier to entry – many existing interfaces for blockchain

ledgers are too complex for mainstream adoption today.

Specific areas to improve include the user experience,

system speed and the lack of formalized blockchain

protocols

The degree to which users trust and understand the

technology could also prove a barrier to adoption. For

instance, investors interested in blockchain-based

approaches to finance face significant barriers to

participation as such investment applications require a

certain degree of blockchain literacy.

Example: Blockchain enables aggregation of

microfinancing by individuals to collectively fund larger-

scale projects that address environmental challenges and

increase renewable energy deployment. However, unless

these adoption challenges are overcome, such platforms

will not grow sufficiently to raise capital at the scale

needed to be effective.

Technology barriers

While blockchain infrastructure and use-cases are

maturing, and the start-up ecosystem is growing rapidly,

the deployment of production-ready networks is still

relatively sparse. There are a number of technical

challenges with blockchain, and the ability to overcome

these may determine the extent of its deployment over

the coming years.

Building block(chain)s for a better planet

The decentralized architecture of the blockchain

network, for instance, necessitates that for all PoW

applications, every participant in the network must

process every transaction. The result is that PoW

applications are constrained by the time taken to process

each transaction.

In addition, as the size of the blockchain network grows,

there will be more competition for the limited

transaction capacity. Currently, this means transaction

confirmations take longer and higher fees are often

charged per transaction as users seek to outbid each

other to ensure their transactions are processed first.

Today, public blockchains such as Bitcoin and Ethereum

can handle only between three and 30 transactions per

second. To be able to underpin the complete energy grid,

for example, a blockchain platform would need to be able

to handle millions of transactions per second. For

comparison, Visa circuits about 60,000.

These characteristics create a scalability challenge,

whereby the size of the network is constrained. In order

to scale, blockchain protocols will likely need to develop

mechanisms to limit the number of participating nodes (a

device on the blockchain) needed to validate each

transaction, without losing the network’s trust that each

transaction is valid.

Example: An inability to cope with a large number of users

and rapidly process large numbers of transactions could,

for instance, limit the adoption of blockchain in global

decentralized energy systems.

Security risks

One of the essential attributes of blockchain is that it is

said to be virtually unhackable due to the complex

cryptography and the distributed nature of the ledger. All

IT systems, however, are subject to cybersecurity risks,

and blockchain is no exception.

By design, blockchain ledgers generally share more data

with other participants than do traditional centralized

databases, as data needs to be shared, often equally,

among multiple peers. Enterprises cannot afford,

however, to expose private data publicly for either legal

or competitive reasons. To overcome this contradiction,

access to most blockchain ledgers requires both a public

and a private key. Since it is essentially impossible to

access data within a blockchain without the right

combination of public and private keys, this represents

the strength of the system. This is also a weakness,

however, as all a hacker needs are the right keys to

access the data. Protecting these keys relies on the

individual user storing and processing them securely,

which can be daunting to users unfamiliar with the

technology.

Example: Blockchain could revolutionize corporate and

government reporting and assurance, along with carbon-

market transactions. However, the often sensitive nature of

the data being reported means that organizations may be

reluctant to fully support the move to blockchain

platforms.

Legal and regulatory challenges

As technologists focus over the next few years on fixing

the technical limitations of blockchain and building

networks that form the infrastructure layer of the crypto

stack, a fit-for purpose legal and regulatory environment

for blockchain must also be established and operable

across jurisdictions globally. Current vital regulatory and

legal challenges for blockchain scaling include:

“Distributed” jurisdiction and “networks” of laws:

Legislative frameworks are currently defined by each

jurisdiction. Blockchain ledgers do not have a specific or

clearly identified location for each transaction, with each

node potentially being located in a different part of the

world. This means it is not clear which jurisdiction a

blockchain will fall under, with the potential to create

complex, duplicative and, at worst, conflicting regulatory

and compliance demands for entities implementing

blockchain solutions. In the case of legal disputes,

deciding which law(s) should be applied and which

courts have the right to decide on matters will be

complex.

Legal framework for legal validity:

If blockchain technology is to be successfully deployed in

“smart contracts” or transactions, the legal framework

surrounding contract formation and recognition will

need to evolve to reflect technological developments.

First, blockchain will need to be recognized by law as

immutable. Secondly, the current legal basis for contract

formation will need to evolve so that there can be no

doubt when a “smart” agreement is deemed to be valid

and enforceable.

Responsibility and Accountability:

Responsibility for blockchain technology is difficult to

attribute; knowing who should be held accountable is

often unclear and will depend on the nature of the

blockchain’s use, who is running it and how it functions

(this is particularly the case for decentralized

autonomous organizations, or DAOs

). Legal systems

and regulatory frameworks will need to clarify

accountability, including how to treat DAOs and attribute

responsibility for their actions in a sensible manner

Building block(chain)s for a better planet

Data privacy:

Blockchain ledgers are immutable, meaning that once

data is stored it cannot be altered. This has implications

for data privacy, particularly where the relevant data is

personal data. Public blockchain systems, in particular,

present challenges in terms of balancing individuals’

right to privacy with the concept of an open network.

The nature of blockchain systems (public and private) as

an immutable record inherently contradicts the “right to

be forgotten”, which applies as a legal right in some

jurisdictions. Where organizations are subject to these

types of privacy laws, their use of blockchain to handle

personal data should be carefully considered. For

example, organizations storing personal data via

blockchain will need to carefully consider how to comply

with rules relating to their handling of that data. The

current blockchain network – at least where the network

is a public one – means it may be virtually impossible for

organizations to control where data is transferred to and

who has access to it.

Example: Cross-border blockchain platforms, such as

blockchain platforms for energy or water grids, stand to

face significant regulatory barriers associated with data

protection. This is a particular issue for public blockchain

networks that will be handling personal data.

Interoperability risks

The integration of blockchains with each other and with

other IT systems will be fundamental to its success.

Given the early stages of blockchain development, it is

only natural that there are no concrete blockchain

standards. While the standards are being developed

within each platform, the interoperability between

platforms and with other IT systems is currently

extremely limited and often non-existent.

This potentially raises a costly operational challenge as

users will need to set up suitable data models and

blockchain-enabled business processes to incorporate

new authentication and communication protocols.

Example: The complexity of global supply chains means

that integrating blockchain-based traceability

applications with existing management systems could

prove costly and complex.

The energy consumption challenge

First-generation blockchain platforms with PoW

verification (such as Bitcoin) are by design energy

intensive. If such early solutions were to be scaled up

without modification, they could have a significant

negative impact on environmental challenge areas.

Developers recognize and are starting to address this

important issue. Second-generation solutions, including

Ethereum, for example, use different verification

protocols and are far less energy intensive. It is expected,

therefore, that as blockchain matures, its energy

intensity will reduce and the opportunities for

blockchain to help the planet may well far outweigh its

energy-use limitations. (The energy dilemma

surrounding blockchain solutions, including system-wide

perspectives, is covered more thoroughly in the box: Can

the Earth afford blockchain?.)

Can the Earth afford blockchain?

An important challenge for blockchain applications is its

energy use. Currently, as the most widely used

application of blockchain, cryptocurrencies are the focus

of critique. Particularly in the public eye, the focus has

been on the significant energy use of the most popular

cryptocurrency: bitcoin.

Bitcoin energy usage

The upper estimate of bitcoin’s energy

consumption in July 2018 was 70 terawatt

hours per year

– the same amount of

energy as Austria consumed in 2014 and

around 0.35% of total global energy

consumption that year.

A single bitcoin transaction could power 1.5

American homes for a day.

A Visa transaction requires 0.01 kWh of

power, whereas a bitcoin transaction

requires an estimated 200 kWh per

transaction.

A new bitcoin chain is formed

approximately every ten minutes.

By design, cryptocurrencies are very energy intensive

because they are mined using a “proof of work” (PoW)

protocol. PoW increases in difficulty as more miners

enter the network seeking to profit from bitcoin’s strong

year-on-year price growth. The difficulty also increases

by design every four years and there is a hard cap on the

total number of bitcoins that can be mined, further

driving up competition between miners. This increasing

difficulty and competition means that miners require

increasingly powerful – and energy-hungry – computers

and data centres in order to compete. This equation

could significantly limit the potential of mainstream

cryptocurrencies.

Building block(chain)s for a better planet

There are many other emerging applications of

blockchain beyond cryptocurrencies, with use-cases

discussed in previous sections of this report. Blockchains

such as Ethereum, NEO, Cardana and WAVES operate on

a less energy-intensive “proof of stake” (PoS) protocol.

For example, Ethereum transactions consume

approximately 12–14 times less energy than bitcoin

transactions.

Others are developing “proof of

importance” (PoI) protocols, which are expected to be

less energy intensive thanks to its simplified and more

accessible validation process.

Other more energy-efficient validation processes for

crypto-alternatives include, for example, the Chia

Network, which is an ecological alternative to bitcoin

that runs on a “proof of space” process. Due to its

increased energy efficiency, the Chia Network enables

miners to validate processes from their home

computers.

Energy efficiencies will additionally be seen

across blockchain solutions as next-generation

computers, including projects such as HPE’s “The

Machine”, aim to significantly increase computational

speed and power at a lower energy usage.

There are many ways to construct and operate

blockchain networks, and the mining process is not

always necessary for private key networks. Consensus

can be achieved in a much more energy-lean way.

“Proof f authority” (PoA) networks, for example, only

allow authorized authorities to validate networks. When

authorities don’t have to “compete” for access, as in

crypto-mining, there is less energy consumption

throughout the network as a whole. For example, the

Energy Web Foundation, in partnership with various

energy companies including Shell and Duke Energy, is

currently building an energy-lean blockchain framework

operating on a PoA protocol.

Understanding blockchain’s broader impact on the

energy system overall, however, is more complicated,

and it is important to adopt a system-wide perspective

that takes into account the relative energy impact of

blockchain solutions versus existing methods. For

instance, energy management is an area where the

relative energy-saving benefits of blockchain could

outweigh system-energy usage. Blockchain solutions are

also being developed to incentivize the uptake of

renewable energy and energy efficiency (see sections:

“The blockchain opportunity for our environment” and

“Blockchain game changers for the Earth”).

The scaling up of such solutions, if supported by the right

“enabling environment”, could support and potentially

accelerate the overall decarburization of the energy

system and global efforts to reduce greenhouse gas

emissions. Examples here might include initiatives to

provide proof of origin for renewable energy generated

or purchased by companies, governments and

individuals; renewable energy coins that reward bitcoin

miners for generating or sourcing renewable energy; and

efforts to crowdsource investments in renewable energy

projects, opening them up to a new class of investor.

Building block(chain)s for a better planet

Conclusions and recommendations

Blockchain for the Earth principles

Today’s excitement surrounding blockchain can lead to a

temptation to try to use blockchain to solve everything. A

reasoned and structured approach is needed to help

practitioners assess whether and how to deploy a

blockchain-based solution for a defined environmental

problem and to guide investors in considering if a

prospective blockchain application is actually needed or

not. Below are three principles to guide such an

assessment:

Figure 7: Blockchain principles

Source: PwC research

1) Will blockchain solve your environmental or

natural resource security problems? Consider

whether blockchain is actually needed to solve the

problem by asking what the problem is and how

might distributed ledger technology realize your

envisaged solution.

•

Is blockchain the most suitable tool to address

the challenge? Is blockchain the only solution to

the problem, or are there other simpler or more

appropriate tools? And in parallel, which aspect of

the technology is most needed for this particular

solution?

•

Is transparency and traceability an important

part of your challenge/proposed solution?

Blockchain facilitates transparent and traceable

transactions. Is data on provenance, movement

and ownership something that would be valuable

for the solution?

•

Is decentralization vital to your solution? Can a

blockchain-enabled decentralized solution

improve environmental performance relative to a

centralized system? What other advantageous

decentralization characteristics does the new

system need that blockchain may support,

including, for example, peer-to-peer transactions,

demand-supply balancing, transaction efficiency

and speed, enabling participation of wider market

participants (consumers and devices)?

•

Are you looking to access new sources of

finance for sustainability outcomes? Blockchain

is an enabler for accessing project finance from

wider investor types (including the wider public),

or creating financial value and trade from non-

traditional asset classes (e.g. natural capital,

water). Is this a requirement of the application?

What are the distinct advantages relative to

crowd-financing or other established financing

solutions?

Building block(chain)s for a better planet

2) Can you acceptably manage the downside risks or

unintended consequences? Consider the risks and

challenges posed by a blockchain-enabled solution to

the biological and institutional systems that

underpin the environment or natural-resource issue

in question, the technical and commercial feasibility

of being able to mitigate these, and the likely time

frames to be realized.

•

Have you considered the implications of data

privacy regulations and the wider data

security risks? Environmental and natural

resource issues are rightly emotive and often

viewed as public goods or common property

resources. If the solution requires an open

network and a public blockchain system – for

example, a blockchain platform solution for

utilities – what are the legal and reputational data

privacy implications? Will personal data be stored

and what are the jurisdiction-relevant regulations

relevant to the platform’s location that might

present a challenge, including “the right to be

forgotten” and the handling of personal data?

What wider data security measures can be taken,

including data encryption of personal data within

smart contracts?

•

Have you considered implementation risks

related to data quality or wider constraints of

the real world interface? A thorough

understanding of the weaknesses of the real world

system is a prerequisite for developing more

effective solutions. What is the quality of the

underlying data, and how serious are any

constraints to the validity of your solution (e.g.

impact of un-monitored large scale illicit water

use on peer to peer water trading permits)? Do

systems, technologies, or incentives exist to

ensure the data entered into the blockchain is

accurate and verifiable? If not, how can you create

these?

•

Is the relative energy consumption of the new

solution justifiable? What are the relative net

greenhouse gas savings of the new/proposed

blockchain-enabled solution using today’s

blockchain technology versus the current (non-

blockchain) system?

•

Are you using an energy optimal platform Is

the blockchain platform you are planning to use

the most energy-efficient option currently

available while still meeting your use-case

requirements? Does it allow for continuous

improvement in energy use – for example, does it

incentivize developers to reduce its energy use

over time and as you scale up?

•

Are there any scalability challenges to using a

blockchain platform and how might these be

overcome? For example, is a data standardization

effort required to enable scaling? At what scale

might the platform reach transaction capacity and

are there any technology platform workarounds

that address the scalability challenge (e.g. a

slimmed-down “light client” version or separate

off-chain layers to the platform)?

3) Have you built the right ecosystem of

stakeholders? Blockchain’s value as a solution

multiplies when more players participate and when

stakeholders come together to cooperate on matters

of industry-wide or system-level importance. New

partnership and opportunities are more likely to

emerge from multidisciplinary ecosystems.

•

Have you identified the ecosystem of actors

vital to participating in your solution and

important areas for cooperation? For example,

participants should come together to agree a

common set of rules for governance, create and

implement a risk-and-control framework

(including social and environmental impacts), and

determine how to share costs and benefits across

the community (e.g. in a blockchain solution that

benefits the underserved and poorest members of

the community).

•

Have you engaged both users and wider

stakeholders to help define responsible use?

Have you brought together participants and

stakeholders that will be directly and indirectly

impacted by the solution to understand their

needs and concerns?

•

How can you ensure that stakeholders

understand how the technology is being used –

along with the environmental, economic and

social implications – to develop trust in its

deployment? Have you engaged with industry

groups, regulators, governments, NGOs and civil-

society community groups to raise awareness of,

and build trust in, your solution?

Building block(chain)s for a better planet

Recommendations

The opportunity for blockchain-enabled innovation to

benefit humankind and our environment is substantial,

but the technology itself is still at a relatively early stage,

with many hurdles to overcome. Far from being an

obstacle, this presents an important opportunity for

stakeholders to collectively ensure that the future

development of blockchain technology – both technology

protocols and its applications – constitute “responsible

blockchain”. If this is achieved, blockchain can be

expected to play an important role in enabling new

technological solutions to pressing environmental

challenges, including climate change, biodiversity, ocean

health, water management, air pollution, resilience and

waste reduction. In broader terms, there is also the

potential for blockchain to enable a system shift from

shareholder to stakeholder value, and from traditional

financial capital to accounting for social, environmental

and financial capital. This is particularly important for

the environment, where the “tragedy of the commons”

and inadequate or non-existent valuing of financial costs

present major challenges.

Harnessing blockchain technologies to drive sustainable

and resilient growth and a new wave of value creation

will require decisive action. The opportunities that

blockchain offers need to be developed and governed

wisely, with upfront and continual management of the

unintended consequences and downside risks. This is a

responsibility shared by all stakeholders – from the

technology community (entrepreneurs, researchers,

open-source developers and big tech) and industrial

sector through to governments (policy-makers and

regulators), international organizations, investors and

community organizations. Establishing new global

platforms to accelerate the creation of a “responsible

blockchain ecosystem”, rather than just to incubate

specific projects, would be a valuable and much-needed

next step. It could support the development of effective

blockchain solutions for environmental challenges, help

ensure blockchain technology is sustainable (i.e. good for

people and the planet) and play a crucial role in

formulating the necessary governance arrangements.

The following set of recommendations is therefore

grouped under these three overarching themes and

could provide a roadmap (or at least the starting point)

for such collaborative platforms. Where applicable, this

section also calls out stakeholder-specific

recommendations in recognition of the fact that different

stakeholder groups will often have specific roles to play

within the collective effort to speed up innovation,

minimize risks and maximize environmental and societal

benefits from the application of blockchain.

Developing effective blockchain solutions

1) Harness blockchain for environmental value:

While blockchain is a ledger of any transaction that

involves value, the main focus is currently on

financial value. However, tokenized systems create

an opportunity to harness non-financial value,

including realizing natural capital and/or

incentivizing sustainability outcomes. Capturing this

opportunity could also help to drive the next stage of

sustainable growth and value creation.

For international organizations and multilateral

development banks, there is a clear need to create

the governance, transparency and other conditions

needed for blockchain applications to be successful

in transforming the management of the global

environmental commons. Cross-institutional

collaborations could help create global frameworks

while also establishing regulatory sandboxes to trial

innovative approaches with particular governments,

users and developers. There would be enormous

benefit in establishing a new multi-agency

blockchain initiative. It could, for instance, enable

sustainable resource management across important

value chains such as fish, soft commodities, plastics

and electronics; support better management of vital

resources such as watersheds and forests; improve

coordination in response to natural disasters; and

overcome current political and logistical blockages,

for instance, land rights and localized corruption.

Such an interconnected approach will be essential if

the international community is to successfully

harness the potential of blockchain to accelerate

global environmental action and the delivery of the

global environmental goals.

For angel investors, venture capitalists,

accelerators and impact investors, there are still

relatively few blockchain applications or platforms

actually in production that aim to address

sustainability challenges. Yet the need and the

potential are substantial. This means there is a

relatively untapped investment space that could be

explored. In addition, existing portfolio companies

could be encouraged to evaluate whether blockchain

could create both business value and positive social

and environmental performance.

2) Combine blockchain with other Fourth

Industrial Revolution technologies: Blockchain is

often not a complete solution in itself – the greatest

benefits will be realized when distributed ledgers

and smart contracts are used in collaboration with

other Fourth Industrial

Building block(chain)s for a better planet

Revolution technologies, including AI and IoT. There

is therefore a need to recognize how blockchain can

best be integrated with other solutions to address

global environmental challenges.

3) Collaborate for interdisciplinary solutions:

Blockchain’s decentralized architecture means there

will be a need to ensure that the views of

stakeholders are accounted for in the design and

deployment of platforms. There will also be a need

for significantly more interaction among developers,

users, policy-makers, regulators, lawyers and domain

specialists to optimize the design and deployment of

blockchain, in addition to developing the

surrounding legal and regulatory architecture

For companies, this means that realizing the

potential of some of the most transformative

systems-level blockchain-enabled applications will

require collaboration and co-innovation across

different sectors, between industry and the

blockchain community, and between the public and

private sectors and the third sector, such as NGOs

and non-profits. This could mean co-investment in an

open-source foundational, pre-competitive and

shared blockchain platform for a sector. Current

efforts by the Energy Web Foundation and their

partners in industry and finance to build a new

openly accessible digital infrastructure to help

decentralize, democratize and decarbonize the

energy system are demonstrating how such an

approach could work.

Research institutions experienced in

multidisciplinary research will have an important

role in bringing together environmental and

technology/data scientists and industry

practitioners, to develop knowledge on the use,

impact, ethics and risks of blockchain for the

environment.

Ensuring blockchain technology is sustainable

4) Anticipate wider political economy challenges

and unintended consequences: Given the potential

for blockchain to upend current well-established and

centralized systems, it is important for all

stakeholders to consider how changes might feed

through to the economy and society, in addition to

wider trust issues regarding data privacy and

security. Multistakeholder dialogue will be crucial to

navigate high levels of expected change, build trust

and identify and manage unintended and unforeseen

consequences.

5) Deliver “responsible blockchain”: Put in place

“smart” design, deployment and governance

measures for blockchain solutions to ensure

responsible use for society and the environment.

This includes a range of measures, from ensuring

compliance with privacy rights and clarification of

accountability in case things go wrong through to

minimizing energy consumption and incentivizing

developers to contribute improvements.

It will be important for companies and developers

to actively inform the regulatory landscape and help

to shape standards (see “Governance” below): this

includes working together via industry bodies such

as Global Digital Finance, which is working towards

a harmonized set of standards (the global code) and

practices for the cryptocurrency space and/or

engaging directly with governments and regulators

at the national level on needs in regards to

blockchain governance and public-private

partnerships. Crypto-relevant industry bodies such

as Global Digital Finance should also look to embed

sustainability considerations into the emerging

industry code of conduct and principles.

Internally, companies should establish board

leadership of, and accountability for, blockchain and

its impact on the business to ensure that their

technology strategies build in and optimize the

effect blockchain will have on sustainability

outcomes, both to capture new business

opportunities and to manage potential risks.

Companies that develop an understanding at the

leadership level of the barriers, safety, ethics,

values, governance and regulatory considerations

associated with responsible experimentation and

deployment will be best placed to capture the

benefits of this emerging market.

The developer community in particular has a vital

role to play in improving the energy performance of

protocols for consensus validation, thereby

addressing one of the biggest challenges to

blockchain scaling: its power use. Further

improvements are required for many existing

platforms – and incentive structures could be built

into these and future blockchain platforms – to

encourage developers on open-source platforms to

contribute improvements to energy performance

while also helping to tackle wider challenges to

blockchain scalability and performance (e.g. data

encryption, light versions of the technology for

distributed devices). Such open-source approaches

could also accelerate and broaden the range of

innovative solutions developed on blockchain

platforms (e.g. provenance and tracking apps or

transactive grid operations).

Building block(chain)s for a better planet

Mainstream institutional investors and asset

managers should consider embedding

sustainability considerations into their investment

criteria for blockchain-related (and other Fourth

Industrial Revolution) investments. This would be

consistent with the methodology now being adopted

by investors across other parts of their portfolio and

will be crucial for managing future risk to the value

of those investments. It would also encourage

developers to ensure environmental considerations

(such as energy efficiency) do not prevent real-

world scalability of promising blockchain

applications.

Formulating the necessary governance

arrangements

6) Develop an agile approach to governance and

regulation: Given the infancy of the use of

blockchain technology and the speed of its evolution,

governments and regulators should expect to take an

agile approach. Currently, regulators in many

jurisdictions have been playing an active role in

monitoring developments and reacting as and when

they see potential harm. However, this is on a

jurisdiction-by-jurisdiction basis and firms operating

blockchain-based companies (e.g. crypto-trading

exchanges) can, with relative ease, move their offices,

key officers and primary servers to different

jurisdictions. Likewise, differences across

jurisdictions, including at worst conflicting

requirements, are challenging given the distributed

and transboundary nature of the technology.

7) Build a more global solution to governance, or at

least a globally coordinated solution: The

distributed nature of blockchain technology

accentuates the importance, in the longer term, of

developing a more globally coordinated governance

architecture. There are three main potential options

for how blockchain could be regulated and governed

more widely with recommendations presented as

they apply to each:

a. Employing industry self-regulation. Industry

cooperation to achieve a set of common

principles can be an important mechanism to

raise standards.

In the cryptocurrency space, a

number of national regulators are paying

attention to the standards (the global code),

practices and taxonomy being developed by the

industry body Global Digital Finance. In practice,

consumers and the industrial sector looking to

use or rely on a firm using blockchain would be

able to see standards have been adhered to,

thereby supporting decision-making and

building trust. A global code has the benefit of

being jurisdiction-agnostic so that firms can layer

compliance with other jurisdiction-specific

obligations. Regulators should play an important

role in shaping such a global code, representing

wider interest groups, including the general

public, to ensure particular groups do not

dominate and that standards are not too watered

down. Regulators or enforcement agencies can

also subsequently hold firms (operating in their

jurisdiction) to account according to these

principles, especially if they peg regulation to

such standards. However, self-made regulation

will always be a compromise and central

regulators still have an important role to play in

assessing where to develop a more rigid set of

requirements, including in relation to

environmental performance. This will be

important to avoid the blockchain equivalent of

the “market failures” that have contributed to

current environmental challenges.

b. Country-specific regulation and government

policies. Currently this appears to be the most

prevalent way of governing blockchain (at least

in the crypto-asset space), with local regulators

asserting jurisdiction in order to combat any

perceived harm. However, when countries do

this in isolation, there is a risk of creating

conflicting requirements. Country-led standards

in regards to the energy efficiency of protocols,

for instance, could play an important role in

accelerating blockchain communities to adopt

greener protocols. Likewise, government funding

commitments could be directed towards

blockchain research (e.g. ethics, social and

environmental impact, and technology

innovation) and development that seeks to scale

public-private “blockchain for society and

environment” projects and platforms.

c. Globally coherent regulation. Global regulators

and international governance mechanisms such

as the Financial Stability Board (FSB) and G20

have important yet challenging roles to play in

achieving more coherent regulation in regards to

blockchain at an international level. Regulation in

response to the financial crisis that stemmed

from G20 initiatives and commitments could

serve as a blueprint for this (e.g. the G20

Pittsburgh Summit that led to wide-scale G20

derivatives legislation). To date, the FSB has

developed a framework for the G20 to monitor

crypto-asset risks to the financial system

, but it

has not yet taken a broader look at cross-

industry blockchain and DLT standards and

codes. If international industry bodies such as

the BCBS-IOSCO or FSB can come up with

Building block(chain)s for a better planet

relatively detailed requirements for certain types

of firms using blockchain, this could help achieve

harmonization across jurisdictions, including in

relation to environmental performance. While

this would send strong governance signals to

governments and companies, as the

G20 derivatives reform showed, there is still a

risk that implementation on a jurisdiction-by-

jurisdiction basis will differ as countries look to

build on existing regulations and principles, and

not all jurisdictions may choose to implement the

recommendations.

Building block(chain)s for a better planet

Acknowledgements

We would like to acknowledge the valuable contributions of the following people in the development of this document:

Lead authors

Celine Herweijer (PwC UK), Benjamin Combes (PwC UK), Jahda Swanborough (World Economic Forum), Mary Davies (PwC UK)

Contributing authors

Jennifer Hanania (PwC US), Kurt Fields (PwC US), Jennifer Zhu Scott (Radian Partners), Lisa Sexton, Giulia Volla (PwC UK)

Other contributors

Victoria Huff (PwC US), Sheila Warren (World Economic Forum), Leanne Kemp (Everledger), Santiago Siri (Democracy Earth

Foundation), Veronica Garc

a (Bitlumens), Heather Clancy (GreenBiz), Jessica Wrigley (PwC UK)

Fourth Industrial Revolution for the Earth Initiative:

Advisory Group

Celine Herweijer (PwC UK), Dominic Waughray (World Economic Forum), Steve Howard (We Mean Business Coalition), Jim

Leape (Stanford University), Usha Rao-Monari (Global Water Development Partners)

Project Team

Celine Herweijer (PwC UK), Benjamin Combes (PwC UK), Sarah Franklin (PwC US), Jerica Lee (World Economic Forum),

Victoria Lee (World Economic Forum), Jahda Swanborough (World Economic Forum)

About the Fourth Industrial Revolution for the Earth Initiative

The World Economic Forum is collaborating with PwC as official project adviser and the Stanford Woods Institute for

the Environment on a major global initiative on the Fourth Industrial Revolution for the Earth. Working closely with

leading issue experts and industry innovators convened through the World Economic Forum’s Global Future Council

on the Environment and Natural Resource Security, and with support from the MAVA Foundation, this initiative

combines the platforms, networks and convening power of the World Economic Forum and its new Centre for the

Fourth Industrial Revolution in San Francisco. It also brings Stanford University’s Woods Institute for the

Environment’s researchers and their networks in the technology community together with the global insight and

strategic analysis on business, investment and public-sector issues that PwC offers. Together with other interested

stakeholders, this partnership is exploring how Fourth Industrial Revolution innovations could help drive a systems

transformation across the environment and natural resource security agenda.

Building block(chain)s for a better planet

Annex I:

Glossary of blockchain terms

Blockchain consists of a number of areas, including but not limited to those below:

Blockchain terms Description

Distributed ledger

•

An electronic ledger in which data is stored across a series of decentralized nodes as opposed to

one centralized system. Distributed ledgers are inspired by blockchain technology. However,

unlike blockchain, distributed ledgers are not tied to bitcoin or any specific cryptocurrency and

may be private and permissioned.

Permissioned ledger

•

Participants in this ledger system are universally known to all other participants. Permissioned

ledgers can be both public or private ledgers. Read or write ability is granted to selected parties.

Permissionless ledger

•

Participants in this ledger system may remain completely anonymous. Although most

permissionless ledgers are public ledgers, they could also be private. Anyone in the network has

read and write ability.

Consensus Mechanism

•

Process by which all of the validators within a distributed ledger system reach an agreement on

the state of that ledger.

Cryptography

•

Science of taking information and transforming it in a manner in which it can be deciphered only

by the intended recipient. Cryptography is a process used primarily to protect sensitive

information.

Proof of authority

•

An algorithm that validates transactions through a consensus mechanism that relies on identity as

a form of stake.

Proof of Importance

•

A mechanism used to determine which nodes are eligible to add a block to the blockchain, a

process known as “harvesting”.

Proof of history

•

An algorithm used to create a historical record that proves that an event has occurred at a specific

moment in time.

Public distributed ledger

•

Distributed ledger system that is open to all interested participants and can be appended by all

participants. The Bitcoin blockchain is an example of a public distributed ledger.

Private distributed ledger

•

Distributed ledger system in which all participants are known, and access to the ledger can be

limited to approved parties.

Smart contract

•

Computer protocols that facilitate, verify or enforce the execution of a contract. At a fundamental

level, smart contracts are analogous to a series of if-then statements applied to the details of a

transaction.

Tokens/Tokenization

•

Digital representation of a real-world asset/the concept of tying information about an asset to a

blockchain. From there, participants can interact with the asset by selling or trading it, for

instance.

Building block(chain)s for a better planet

Annex II:

The Fourth Industrial Revolution for the Earth

initiative

The Fourth Industrial Revolution for the Earth initiative

is designed to raise awareness and accelerate progress

across this agenda for the benefit of society. In the first

phase of the project, specific environmental focus areas

will be considered in depth, exploring in detail how to

harness Fourth Industrial

Revolution innovations to better manage the world’s

most pressing environmental challenges. Initial focus

areas will include:

•

Air pollution

•

Biodiversity

•

Cities

•

Climate change and greenhouse gas monitoring

•

Food systems

•

Oceans

•

Water resources and sanitation.

Working from these thematic areas, the World Economic

Forum, supported by Stanford University and PwC (as

project adviser) and advised by the members of the

Global Future Councils on the Future of Environment and

Natural Resource Security and specific Fourth Industrial

Revolution technology clusters, will seek to leverage

their various networks and platforms to:

•

Develop a set of insight papers, taking a deep dive

into the possibilities of the Fourth Industrial

Revolution and each of these issues

•

Build new networks of practitioners and support

them to co-design and innovate for action on the

environment in each of these issue areas, leveraging

the latest technologies and research that the Fourth

Industrial Revolution offers

•

Design a public-private accelerator for action,

enabling government, foundational, research

organization and commercial funds to be pooled and

deployed into scaling innovative Fourth Industrial

Revolution solutions for the environment.

•

Help government stakeholders to develop and trial

the requisite policy protocols that will help Fourth

Industrial Revolution solutions for the environment

to take hold and develop.

The Fourth Industrial Revolution for the Earth initiative

will be driven jointly out of the World Economic Forum

Centre for the Fourth Industrial Revolution in San

Francisco and other Forum offices in New York, Geneva

and Beijing.

Building block(chain)s for a better planet

Annex III:

Building block(chain)s for a better planet – Use case table

Environmental challenge: Climate change

Action area Use case Description of the role of

blockchain

Potential environmental

outcomes

Clean power Peer-to-peer renewable energy

trading systems

Blockchain – based peer-to-peer

energy platform for trading solar

energy and other renewables,

allowing a decentralized energy

market for efficient household

energy use (e.g. SunContract,

SOLshare and LO3 Energy)

A peer-to-peer system reduces the

need to transmit energy over long

distances, reducing household

energy storage needs and

diminishing energy loss in the

transmission phase from power

plants to consumers.

Crowd-sale for renewable energy

investment

Blockchain based energy system

provides a platform for people to

invest in renewables that

otherwise are unlikely to attract

investment (e.g. EcoChain and Sun

Exchange)

Users will receive a return from

investing in renewable energy

installations and finance is

provided for renewable energy

projects that require investment.

Optimized distributed grid

management

A distributed energy utilities

system through which households

can buy and sell energy

The distributed network aims to

provide communities with

affordable, reliable, and clean

electricity to reduce carbon

emissions at a global level.

Authentication of renewable

energy certificates

The use of blockchain for verifying

renewable energy certificates

(RECs) has the potential to boost

buyer confidence in REC

authenticity, eliminating the need

for expensive third-party certifiers

Blockchain gives more confidence

that the renewable energy

certificates being sold represent

real green power, helping to

support the renewable energy

market.

Smart cities and homes Blockchain-based land, corporate,

civil and asset registries

An accurate record of land

conservation efforts can be

facilitated through blockchain,

increasing reliability and coverage

of such activities (e.g. Bitland

platform in West Africa)

This would allow for easier and

more reliable identification of

conservation areas, overcoming

issues of corruption and other

inefficiencies.

Secure paperless transactions An online encrypted database to

facilitate the digitization of

processes that currently use paper

Electronic transactions allow the

complete removal of paper,

resulting in a reduction of the

ecological footprint of transaction

processing.

Citizen loyalty and reward

platform

A blockchain-based loyalty and

rewards platform can reward

individuals for their 'green'

contributions (e.g. recycling waste)

to cities. (e.g. Nature Coin)

This loyalty and rewards platform

can be used by governments to

incentivize certain

environmentally friendly actions

from citizens.

Building block(chain)s for a better planet

Environmental challenge: Climate change

Action area Use case Description of the role of

blockchain

Potential environmental

outcomes

Decentralized voting platforms for

climate action

A voting platform based on

blockchain technology and backed

with transparent crypto

algorithms, enabling a secure

online voting system and optimized

election processes. (e.g. Polys)

This blockchain software can

enable democratic, immutable and

anonymous votes on

environmental issues.

Financially incentivized

recycling initiative

Blockchain enabled extended

producer responsibility system to

incentivize recycling of waste by

transferring a fee paid at the point

of purchase to recyclers in order to

subsidize the cost of recycling

This can increase the

transparency, scalability and

efficiency of extended producer

responsibility systems, where

start-up cost and low trust in

the system are current barriers of

use.

Smart transport systems Smart parking system for

optimized mobility management

Blockchain-powered sensors

attached to vehicles for accurate,

real-time detection and location of

available parking spaces (e.g.

NetObjex)

As parking technology advances

there will be fewer cars searching

for parking, which will result in a

reduction of greenhouse gas

emissions from road transport.

Data ledger for optimized

transport logistics

A blockchain platform can enhance

public transport services by

facilitating the exchange of

transport services and logistics

companies data (e.g. the blockchain

platform Omnitude)

Optimizing transport logistics to

increase efficiency of public

transport and lower emissions.

Peer-to-peer vehicle sharing This blockchain – enabled payment

system allows private car owners

to get paid when sharing their

journey with others (e.g. LaZooz

and Arcade City)

The platform synchronizes empty

seats with transportation needs in

real-time, enabling better use of

existing resources by reducing the

number of vehicles on roads.

Blockchain–based decentralized

delivery networks

Blockchain–powered platform to

capture and secure real-time road

traffic information for more

efficient delivery systems (e.g.

VOLT)

The system is designed to improve

the efficiency of delivery systems,

greatly reducing the volume of

exhaust emissions released into

the atmosphere.

Sustainable land use Blockchain–enabled sustainable

mining

Cobalt is given a digital fingerprint

that is then tracked by blockchain

through its supply chain, giving a

forgery-proof record of where it

has come from (e.g. BHP Billiton)

Transparent mining operations to

ensure ethical cobalt sourcing and

more sustainable mining practices.

Data ledger of environmental

conditions to inform agriculture

financing

In-field sensors collect data on soil

quality, field applications, weather

and farming practices. Blockchain

data ledger for access to

information (e.g. RipeIo's

blockchain-based platform)

Transparent and immutable

record of agricultural conditions.

This is used to inform sustainable

farm management.

Automation of data collection and

management for better

sustainability accounting

The tool uses blockchain for an

accurate verification of

sustainability-related data to

provide unprecedented levels

of accountability.

Automating sustainability data

collection and management (such

as GHG emissions) through smart

contracts in order to access real-

time, trustworthy data and

minimize fraud.

Building block(chain)s for a better planet

Environmental challenge: Climate change

Action area Use case Description of the role of

blockchain

Potential environmental

outcomes

Sustainable production

and consumption

Blockchain–powered platform for

carbon offsetting

The technology provides

consumers with accurate

information on the level of carbon

offsets they’re buying from

products, enabling to trade up or

down their own offsets (e.g. Ben &

Jerry's)

By tracking the carbon offsets

acquired from products consumed,

and making individual's footprints

visible, the platform aims to

encourage more sustainable public

consumption of carbon.

Waste-to-energy blockchain

solutions

Blockchain is connected to

anaerobic digestion technologies

that convert household waste into

electricity, which can then be sold

to other households (e.g. 4NEW)

The solution aims to address

energy waste at a household level,

enabling customers to efficiently

manage energy usage.

Ledger for collection and

verification of ESG data

The global ledger ensures

verifiable and immutable data on

corporate sustainability to provide

an accurate picture of companies'

social and environmental

performance.

The technology ensures an

accurate assessment of a

company's social and

environmental performance,

providing useful information that

can be used to create more

relevant actions for reducing

impact on climate change.

Soil properties data collation from

distributed sensors

Dashboard with a transactional

ledger for e-waste recycling -

connecting parties involved in the

recycling supply chain and

increasing efficiencies.

It provides immediate data on

recycling to policy makers, leading

to improved resource efficiency

and expenditure.

Environmental challenge: Biodiversity and conservation

Action area Use case Description of the role of

blockchain

Potential environmental

outcomes

Habitat restoration and

conservation

Cryptocurrency for investment in

habitat restoration and species

conservation

Blockchain – based payment

platform to facilitate the clean-up

of oil-polluted lands, by providing

community members with

cryptocurrency payments through

a secure, non-corruptible, payment

system (e.g. Sustainable

international platform Sela)

By rewarding active community

members with cryptocurrency

compensations, the blockchain-

enabled platform seeks to

encourage the clean-up of oil-

polluted regions.

Tracking geographic reach and

movement of endangered species

Blockchain ledger to track, tag and

record the health, geographic

reach, and movement patterns of

endangered species (e.g. The WEF

Amazon Bank of Codes and Care,

NGO Uncared platform in planning)

The technology is used to record

real-time information on the

health, locations and movement

patterns of endangered species to

inform conservationists on most

appropriate mitigating actions.

Incentivization for farmers to

protect habitats

Blockchain-powered smart

contracts to verify volunteering

activities by providing financial

incentives based upon individual

performance (e.g. reforestation

projects). (e.g. GainForest)

The solution is designed to provide

financial rewards, incentivizing

citizen to become stakeholders in

tackling deforestation.

Building block(chain)s for a better planet

Environmental challenge: Biodiversity and conservation

Action area Use case Description of the role of

blockchain

Potential environmental

outcomes

Pollution control Recording of pesticide use on

agricultural land

Blockchain – based platform

enables farmers to record the

pesticides they use, how often they

used them and the location of use

The platform provides the public

with information on farmers'

pesticides use influencing

consumers' purchasing decisions

and mitigating environmental

impacts from agricultural

activities.

Incentivized system for responsible

waste management

The platform enables users to earn

coins by exchanging plastic and

aluminum bottles and by sorting

waste correctly (e.g. the Recereum

platform)

The system aims to tackle waste

sorting and management issues to

ensure a safer and cleaner

environment.

Realising natural capital Timber and other natural

resources provenance tracking

Blockchain ledger to collate and

store data on the provenance of

timber at a global level. (e.g. BVRio

has developed a platform called the

Responsible Timber Exchange)

The systems enables verification of

the origin of timber, diamond and

other natural resources to

encourage sustainable harvest

practices.

A decentralized natural asset

exchange platform

The solution permits the creation

and transfer of verified and

protected digital assets called

‘ether’ that can be used to purchase

Earth tokens

An emerging online platform

offering efficient, transparent and

democratic connections between

producers, buyers and consumers

of natural capital assets, fueling

demand for environmental

solutions.

Sustainable trade Transparent monitoring of supply

chain transactions

The solution enables farmers to

track real-time data and more

effectively manage crops as they

move through the value chain. (e.g.

platforms by BanQu, AgriDigital,

Grassroots and Bext360)

Blockchain has been deployed to

assist farmers in monitoring and

managing their supply chains,

enabling efficient crop

management and reducing

generated waste.

Real-time traceability of supply

chains

Blockchain–powered app enables

manufacturers, retailers and

consumers to track products

throughout their entire supply

chain. (e.g. Carrefour have

introduced an application)

The solution empowers consumers

to make purchasing decisions that

can support ethical supply chain

practices.

Environmental challenge: Healthy oceans

Action area Use case Description of the role of

blockchain

Potential environmental

outcomes

Fishing sustainably Tracking fish provenance Blockchain – based mobile app for

scanning tuna packaging, helping to

track fish origin throughout their

supply chains (e.g. WWF

Blockchain Supply Chain

Traceability Project)

The tool empowers retailers and

consumers to select responsibly –

caught fish and contributes to

increasing sustainable fishing

practices.

Building block(chain)s for a better planet

Environmental challenge: Healthy oceans

Action area Use case Description of the role of

blockchain

Potential environmental

outcomes

Monitoring of illegal fishing

activities

The blockchain solution gives the

ability to upload information about

the global commercial fishing fleet

onto a decentralized and

irreversible system

More accurate information on

fishing activities at a global level

will enable scientific researchers,

environmental advocates, and

policy makers to create better

management strategies for

protecting marine species.

Impacts of climate

change (including

acidification)

Incentivized collection of data on

ocean conditions

A blockchain – based data

collection system on the pH level in

water bodies, aimed at monitoring

acidification, and providing

insights for creating mitigating

strategies where necessary (e.g.

Fishcoin)

The solution enables scientists and

resource managers to monitor,

understand, and respond to ocean

acidification.

Incentivized investments in ocean

conservation

Crypto and charity have come

together to auction off items, such

as digital art, to raise funds for

ocean conservation (e.g. The Hondu

Kitty)

This opens up new sources of

finance accelerating ocean

conservation efforts

Real-time monitoring of ocean

temperature and pH

Wireless sensors can monitor pH

levels in the ocean and store data

on a blockchain-based data

platform

Climate change is likely to have a

significant impact on ocean pH

levels and temperature – this will

monitor these changes.

Pollution Control Incentivized ocean plastic recycling

initiatives

Aimed at single-use plastic bottles

and aluminum cans, the solution

leverages a blockchain based

mobile app to allow the exchange

of recyclable waste for tokens,

which can be exchanged for goods

and services (e.g. RecycleToCoin)

Through the mobile app,

individuals are more incentivized

to recycle, and tokens ensure a

secure and cashless method of

reimbursement.

Transparent ledger for faster, safer

and more efficient shipping

A blockchain-based data platform

and smart contracts can make the

shipping process faster, safer and

more efficient with quick paperless

transactions and reliable cargo

tracking (e.g. APL Ltd is testing a

blockchain-based shipping

platform)

Increased efficiency in shipping

can significantly reduce emissions

from the sector. Smart,

transparent contracts can also

ensure ships are applying

universal safety standards.

Protecting habitats Decentralized and open source

ledger of ocean data

Decentralized cloud storage, built

on blockchain software, for free,

open-sourced data storage

(e.g. Storj)

This ensures that ocean data is

stored on an open blockchain so

any significant or damaging

changes, such as significant spikes

in temperature, can be easily

identified.

Protecting Species Fundraising for marine wildlife

conservation

Social funding and management

platforms built on a blockchain can

incentivize transparent, charitable

investment.

Transparent and trustworthy

charitable investment can

encourage funding for wildlife

conservation projects.

Building block(chain)s for a better planet

Environmental challenge: Water security

Action area Use case Description of the role of

blockchain

Potential environmental

outcomes

Adequate sanitation Asset-backed token system for

clean, accessible drinking water

Asset-backed token systems where

users will donate 0.1% of each

transaction to improving water

systems in developing countries

(e.g. Clean Water Coin)

Blockchain – powered payment

system enabling users to

contribute to providing access to

clean drinking water for those in

need.

Hyperlocal water data for

monitoring water quality

The platform stores hyperlocal

water data that can be used to

efficiently track and monitor

potential water contaminants (e.g.

Aquagenuity and WaterChain)

Hyperlocal water data provide

actionable insight into water

quality, enabling better

management of water assets.

Efficient water treatment systems Smart contracts with a specialized

water coin utilized to make

industry transactions faster and

transparent

Increases cost efficiency of

transactions and reduces

water loss.

Catchment control Water quality control in catchment

areas

Blockchain technology provides an

immutable record of data collected

by different parties on the quality

of water in catchment areas.

Accurate and immutable water

quality data facilitates evidence-

based decision making around the

allocation, quality, risks and use of

water, ensuring water safety in

catchment areas.

Drought planning Automated crop insurance for

drought periods

A blockchain – based mobile wallet

offering an automated crop

insurance smart contract that

protects farmers against droughts,

floods and tropical cyclones.

The phone – based automated

insurance system enables farmers

to sustain their farming activities

when natural disasters occur.

Precipitation intensity monitoring

and forecasting

Decentralized weather sensors can

measure precipitation intensity

and forecast future weather,

storing the data on a public

blockchain.

A blockchain – based data platform

can ensure precipitation data is

available for optimized drought

planning.

Water efficiency Blockchain – enabled peer-to-peer

trading of excess water resources

A blockchain platform to collect

data from smart metering of water

and convert water rights into

digital assets that can be traded

(e.g. AQUA rights)

The creation of a trading system

can make water usage more

efficient.

Cryptocurrency-enabled smart

meters

The blockchain solution will be

able to help city planners better

allocate water supply in areas with

minimal infrastructure.

The system encourages people to

adopt sustainable water practices.

Water supply Water monitoring and

management

Leverages smart contracts and a

token management system to

ensure efficient use and

distribution of water (e.g. Civic

Ledger has developed Water

Ledger)

Enables consumers to make

informed decisions around when

to conserve water, and ensures

transparency around water

availability and quality.

Building block(chain)s for a better planet

Environmental challenge: Water security

Action area Use case Description of the role of

blockchain

Potential environmental

outcomes

Micro-payments for water meter

donations

Blockchain enabled donations by a

large number of individuals, for

instance to finance specific water

meters (e.g. Bankymoon)

Transparent record for

management and tracking of

donations, providing confidence,

and incentivizing individuals to

fund smart meters.

Environmental challenge: Clean air

Action area Use case Description of the role of

blockchain

Potential environmental

outcomes

Clean fuels Cryptocurrency payments for EV

public charging

Mobile phone app linked to a

blockchain-based network to

provide electric vehicle (EV)

owners with a seamless charging

system that manages the payment

process automatically

(BlockCharge is a working

prototype for electric vehicle

charging created by RWE and

Slock.it)

The innovative charging system

provides readily – available

infrastructure to incentivize

uptake of EV's for reducing

harmful emissions into the

environment.

Enabling safe and reliable AV

implementation

Blockchain encourages the uptake

of autonomous vehicles (AV)

through providing more accurate

safety information, bringing

forward the safety, efficiency and

convenience benefits of

autonomous driving technology

The secure ledger platform

provides important information on

autonomous vehicles to accelerate

its adoption and encourage the use

of sustainable transport modes.

Early warning Automated air quality monitoring

system

An openly governed platform to

track companies' air quality and

emission emitting sources

A blockchain – based asset

management system to help

businesses around the world

monitor and manage their

emissions of carbon and other

pollutants

Early detection of toxic chemical

leaks

Portable, user friendly air sensors

and store the level of air pollution

in buildings.

The solutions provides users with

timely information in an accessible

way to encourage mitigating

actions where necessary, enabling

health and climate change issues

to be tackled.

Filtering and capturing Air pollutant data collation from

distributed sources

Network of interconnected devices

to collect air pollution data and

transfer pollution levels onto a

decentralized network that is

accessible through a subscription

payable in crypto-currency. (e.g.

Filament developed The Tap, and

AirBie Blue)

Citizens and governments who

have access to accurate

information on air quality can take

meaningful actions to fight air

pollution.

Building block(chain)s for a better planet

Environmental challenge: Clean air

Action area Use case Description of the role of

blockchain

Potential environmental

outcomes

Monitoring and

capturing

Intelligent methane monitoring

systems

Smart decentralized sensors can be

deployed near natural gas

extraction wells and along

distribution pipelines to detect

methane levels in the air (e.g. IBM)

Methane is the second largest

contributor to global warming

after CO

and early detection and

monitoring of methane levels can

reduce methane in the air.

Local and real-time monitoring of

particulates and NO

A decentralized peer-to-peer

network to store and monetize

real-time pollution data, allowing

those who host sensing equipment

to be rewarded. (e.g. the live-

streaming data platforms Streamr

and Smart Citizen)

The system aims to incentivize

community participation in

monitoring air quality by

providing a monetary reward

system for sharing data on the

pollution level of specific locations

(e.g. households).

Environmental challenge: Weather and disaster resilience

Action area Use case Description of the role of

blockchain

Potential environmental

outcomes

Early warning systems Real-time monitoring of

natural hazards

IoT, blockchain and advanced

sensor platforms together with

predictive AI analytics to monitor

real time natural hazards such as

tremors and sea level changes.

Alerts for hazard response in

order to ensure more resilient

communities.

Decentralized weather sensors

generating automated alerts

Decentralized weather cameras

and sensors can provide accurate,

local weather data through a

blockchain platform - generating

alerts in periods of extreme

weather (e.g. Weatherblock)

Local weather monitoring enables

alerts for hazard response.

Financial instruments Management of transactions

in response to extreme

weather event

Blockchain to streamline and

validate transactions during

extreme weather response

instances.

Provide efficient and effective

disaster response, in order to

minimise the impact on local

populations

Disaster recovery funding Smart tokens to transfer cash to

disaster victims, coordinate the

delivery of supplies, streamline

humanitarian financing, or make

humanitarian projects more

gender-inclusive (e.g. Givetrack)

Traceability in donations to

increase donor confidence and

better manage the distribution of

aid.

Crowd-sale for adaptation

investments

Blockchain-enabled platforms and

processes could seamlessly manage

complex financing environments

that integrate a wide number of

stakeholders (e.g. Crowdwiz's

WizFund )

These attributes make climate-

related, infrastructure and other

sustainable development projects

more attractive for investment.

Decentralized disaster insurance

platform

Decentralized blockchain-based

insurance platform, using smart

contracts to provide automated

premium calculations and claims

payouts (e.g. Etherisc)

Facilitates faster claim payouts

after extreme weather events.

Building block(chain)s for a better planet

Environmental challenge: Weather and disaster resilience

Action area Use case Description of the role of

blockchain

Potential environmental

outcomes

Prediction and

forecasting

Extreme weather impact analysis Access to weather information has

always been fairly constrained and

costly. With blockchain technology it

is possible to offer different “tiers” of

accessible information, depending on

what consumers want.

Blockchain-enabled platforms and

processes could seamlessly

manage complex financing

environments that integrate a

wide number of stakeholders

Ledger to identify, verify and

transact weather data

The platform stores real-time

weather data captured through

smart weather camera stations for

actionable insights on extreme

weather events (Weather Block)

The system provides accurate

location-based weather

forecasting to improve community

preparedness ahead of extreme

weather events.

Resilience planning and

disaster response

Enhanced emergency

disaster response

Fund management platforms that

use permissioned blockchain to

help donors, governments and

NGOs transfer and trace funds

through a value chain

The system makes the delivery of

development and humanitarian

aid more effective.

Resilient infrastructure Decentralized mini-grids

improving disaster resilience

Using a blockchain load

management system with a peer-

to-peer trading platform, mini-

grids can become

more prevalent

Decentralized mini-grids are more

resilient against natural disasters

than an ageing centralized grid.

Automatic rerouting of power to

prevent blackouts

Blockchain enables the creation of

microgrids which are better able to

respond to failures (and prevent

blackouts) than traditional grids

(e.g. LO3)

This system makes power grids

more resilient to blackouts,

enabling them to reroute power if

part of the grid or generation units

are damaged by extreme weather

or disaster.

Endnotes

A blockchain is a decentralized ledger of any transaction involving value that is an interlinked and continuously expanding list of cryptographically

secure, immutable data, and is updatable only via consensus.

World Economic Forum, Blockchain Beyond the Hype, April 2018: http://www3.weforum.org/docs/48423_Whether_Blockchain_WP.pdf (link as of

03/09/18).

Coin Market Cap, Top 100 Cryptocurrencies by Market Capitalization as of 05/07/2018: https://coinmarketcap.com/ (link as of 03/09/18).

Stanford Graduate School for Business, Galen, D. J., Blockchain for Social Impact: Beyond the Hype, April 2018:

https://www.gsb.stanford.edu/sites/gsb/files/publication-pdf/study-blockchain-impact-moving-beyond-hype.pdf (link as of 03/09/18).

ICORating, ICO Market Research Q1 2018, accessed August 2018: https://icorating.com/ico_market_research_q1_2018_icorating.pdf (link as of

03/09/18).

Drawn from discussions at, and briefings prepared for, the International Dialogue on the Global Commons held in Washington DC (USA), October 2016.

Steffen, W. et al. “The Trajectory of the Anthropocene: The Great Acceleration”, The Anthropocene Review 2(1), pp.81- 98, 16 January 2015:

http://journals.sagepub.com/doi/abs/10.1177/2053019614564785 (link as of 03/09/18).

Krausmann et al., May 2009, Growth in Global Materials Use, GDP and Population During the 20th Century:

https://www.researchgate.net/publication/222430349_(link as of 03/09/18).

McKinsey, November 2011, Resource Revolution: Meeting the World’s Energy, Materials, Food, and Water Needs:

http://www.mckinsey.com/~/media/mckinsey/business%20functions/ sustainability%20and%20resource%20productivity/our%20insights/

resource%20revolution/mgi_resource_revolution_full_report.ashx (link as of 03/09/18).

Millennium Development Goals 2015 Report:

http://www.un.org/millenniumgoals/2015_MDG_Report/pdf/MDG%202015%20rev%20%28July%201%29.pdf (link as of 03/09/18).

The middle class is defined by the OECD as households having between $10 and $100 purchasing power parity per capita per day.

Drawn from discussions at, and briefings prepared for, the International Dialogue on the Global Commons held in Washington DC (USA), October 2016.

CO2-Earth: https://co2.earth (link as of 03/09/18).

Forzieri, G., “Increasing Risk over Time of Weather-Related Hazards to the European Population: A Data-Driven Prognostic Study”, The Lancet Planetary

Health, August 2017: https://www.thelancet.com/journals/lanplh/article/PIIS2542-5196(17)30082-7/fulltext#section-7c530872-6235-4433-899c-

b3f276970189 (link as of 03/09/18).

McKie, R., Biologists Think 50% of Species Will Be Facing Extinction by the End of the Century, The Guardian, February 2017, available at:

https://www.theguardian.com/environment/2017/feb/25/half-all-species-extinct-end-century-vatican-conference (link as of 03/09/18).

(i) Cebellos, G. et al., “Accelerated Modern Human-Induced Species Losses: Entering the Sixth Mass Extinction”, Science Advances, June 2015:

http://advances.sciencemag.org/content/1/5/e1400253. (ii) McKie, R., “Biologists Think 50% of Species Will Be Facing Extinction by the End of the

Century”.

Arc Centre of Excellence for Coral Reef Studies, James Cook University [media release, “Scientists Assess Bleaching Damage on Great Barrier Reef”,

October 2016: https://www.coralcoe.org.au/media-releases/scientists-assess-bleaching-damage-on-great-barrier-reef (link as of 03/09/18).

Connor, S., “Plastic Waste in Ocean to Increase Tenfold by 2020”, Independent, 12 February 2015, https://independent.co.uk/environment/plastic-

waste-in-ocean-to-increase-tenfold-by-2020-10042613.html (link as of 03/09/18).

Van Cauwenberghe, L., Janssen, C., Microplastics in Bivalves Cultured for Human Consumption, 2014: http://www.ecotox.ugent.be/microplastics-

bivalves-cultured-human-consumption (link as of 03/09/18).

UNESCO on behalf of UN Water, Nature-Based Solutions for Water, 2018: http://unesdoc.unesco.org/images/0026/002614/261424e.pdf (link as of

03/09/18).

Rodríguez de Francisco, J. C., “Water Security and Ecosystem-Based Adaptation to Climate Change”, 22 March 2018: https://www.die-gdi.de/en/the-

current-column/article/water-security-and-ecosystem-based-adaptation-to-climate-change/ (link as of 03/09/18).

Tyree, C., Morrison, D., “Invisibles; the Plastics Inside Us”, Orb, September 2017: https://orbmedia.org/stories/Invisibles_plastics (link as of 03/09/18).

Tyree, C., Morrison, D., “Plus Plastic”, Orb, March 2018: https://orbmedia.org/stories/plus-plastic (link as of 03/09/18).

World Health Organization, Ambient (Outdoor) Air Quality and Health, 2 May 2018: http://who.int/news-room/fact-sheets/detail/ambient-(outdoor)-

air-quality-and-health (link as of 03/09/18).

World Health Organization, “7 Million Premature Deaths Annually Linked to Air Pollution”, 25 March 2014:

http://www.who.int/mediacentre/news/releases/2014/air-pollution/en/ (link as of 03/09/18).

Munich Re, NatCatSERVICE, January 2018: https://munichre.com/site/corporate/get/params_E-65374147_Dattachment/1627347/MunichRe-NatCat-

2017-Top5_en.pdf (link as of 03/09/18).

Munich Re, Natural Catastrophe Review: Series of Hurricanes Makes 2017 Year of Highest Insured Losses Ever, 4 January 2018:

https://www.munichre.com/en/media-relations/publications/press-releases/2018/2018-01-04-press-release/index.html (link as of 03/09/18).

International Displacement Monitoring Centre, 2017 Global Report on Internal Displacement, 22 May 2017: http://www.internal-

displacement.org/global-report/grid2017/downloads/IDMC-GRID-2017-Highlights_embargoed-EN.pdf (link as of 03/09/18).

Plansky, J., O’Donnell, T., Richards, K., A Strategist’s Guide to Blockchain, strategy+business, 11 January 2016: https://www.strategy-

business.com/article/A-Strategists-Guide-to-Blockchain?gko=0d586 (link as of 03/09/18).

World Economic Forum, Blockchain Beyond the Hype, April 2018: http://www3.weforum.org/docs/48423_Whether_Blockchain_WP.pdf (link as of

03/09/18).

A hash is a function that converts an input of letters and numbers into an encrypted output of a fixed length.

World Economic Forum, Blockchain Beyond the Hype, April 2018: http://www3.weforum.org/docs/48423_Whether_Blockchain_WP.pdf (link as of

03/09/18).

ICORating, ICO Market Research Q1 2018, accessed August 2018: https://icorating.com/ico_market_research_q1_2018_icorating.pdf (link as of

03/09/18).

RE100 is a collaborative, global initiative uniting more than 139 corporates committed to 100% renewable electricity: http://there100.org/ (link as of

03/09/18).

Zero deforestation corporate pledges include the Consumer Goods Forum Pledge (https://www.theconsumergoodsforum.com/what-we-

do/resolutions/) and the New York Declaration on Forests (http://forestdeclaration.org) (links as of 03/09/18).

Apple, Environmental Responsibility Report, January 2017:

https://www.apple.com/environment/pdf/Apple_Environmental_Responsibility_Report_2017.pdf (link as of 03/09/18).

BV Rio, Responsible Timber Exchange: https://bvrio.com/madeira/analise/analise/plataforma.do (link as of 03/09/18).

Provenance, from Shore to Plate: Tracking Tuna on the Blockchain, 15 July 2016: https://www.provenance.org/tracking-tuna-on-the-blockchain (link

as of 03/09/18).

Fishcoin: A Blockchain Based Data Ecosystem for the Global Seafood Industry, February 2018: http://fishcoin.co/files/fishcoin.pdf (link as of

03/09/18).

Costello, C. et al., Global Fishery Prospects under Contrasting Management Regimes, PNAS, May 2016: http://www.pnas.org/content/113/18/5125

(link as of 03/09/18).

Ibid.

Food and Agriculture Organization of the United Nations (FAO), Port State Measures, n.d., retrieved August 2018 from http://www.fao.org/port-state-

measures/en/ (link as of 03/09/18).

World Economic Forum, Tuna 2020 Traceability Declaration: Stopping Illegal Tuna from Coming to Market:

https://www.weforum.org/agenda/2017/06/tuna-2020-traceability-declaration-stopping-illegal-tuna-from-coming-to-market/ (link as of 03/09/18).

Global Dialogue on Seafood Traceability: https://traceability-dialogue.org/ (link as of 03/09/18).

Friends of Ocean Action: https://www.weforum.org/friends-of-ocean-action (link as of 03/09/18).

International Barcode of Life, Fish DNA Barcoding, n.d., retrieved August 2018: http://www.fishbol.org (link as of 03/09/18).

Siemens: A Microgrid Grows in Brooklyn, 16 February 2018: https://siemens.com/innovation/en/home/pictures-of-the-future/energy-and-

efficiency/smart-grids-and-energy-storage-microgrid-in-brooklyn.html (link as of 03/09/18).

PwC, Blockchain – An Opportunity for Energy Producers and Consumers?, 2016: https://www.pwc.com/gx/en/industries/assets/pwc-blockchain-

opportunity-for-energy-producers-and-consumers.pdf (link as of 03/09/18).

Energy Web Foundation: http://energyweb.org/ (link as of 03/09/18).

RE100 http://re100.org/ (link as of 03/09/18).

Niculescu, M., Impact Investment to Close the SDG Funding Gap, 13 July 2017, United Nations Development Fund:

http://undp.org/content/undp/en/home/blog/2017/7/13/What-kind-of-blender-do-we-need-to-finance-the-SDGs-.html (link as of 03/09/18).

Clean Water Coin: http://cleanwatercoin.org (link as of 03/09/18).

Ibrahim, A. A. and Joshi, M., How Fintech Can Lead to Sustainable Development – Via Blockchain, World Economic Forum Agenda blog, 26 October 2017:

https://www.weforum.org/agenda/2017/10/fintech-for-sustainable-development-via-blockchain (link as of 03/09/18).

IBM, The Plastic Bank: https://ibm.com/case-studies/plastic-bank (link as of 03/09/18).

Clark, A., Blockchain Based Recycling Initiative to Benefit Third Sector, Charity Digital News, 7 November 2017:

https://www.charitydigitalnews.co.uk/2017/11/07/blockchain-based-recycling-initiative-to-benefit-third-sector/ (link as of 03/09/18)

Food and Agriculture Organization of the United Nations, World Deforestation Slows Down as More Forests Are Better Managed, 2015, accessed August

2018: http://www.fao.org/news/story/en/item/326911/icode/ (link as of 03/09/18).

CDP Global Forests Report, 2017: https://www.cdp.net/en/research/global-reports/global-forests-report-2017 (link as of 03/09/18).

Average Deforestation for Period: 2000–2011. Henders, S. et al., Trading Forests: Land-Use Change and Carbon Emissions Embodied in Production and

Exports of Forest-Risk Commodities, Environmental Research Letters, 10(12), 2015: https://www.diva-

portal.org/smash/get/diva2:899579/FULLTEXT01.pdf (link as of 03/09/18).

World Economic Forum, Commodities and Forests Agenda 2020: https://www.tfa2020.org/wp-

content/uploads/2017/12/TFA2020_CommoditiesandForestsAgenda2020_Sept2017.pdf (link as of 03/09/18).

Verhagen, J., Forests … And Blockchains?, Ecosphere Plus, July 2017: https://ecosphere.plus/blog/forests-and-blockchains/ (link as of 03/09/18).

Bloomberg: https://www.bloomberg.com/crypto (link as of 03/09/18).

Walker, L., This New Carbon Currency Could Make Us More Climate Friendly, World Economic Forum Agenda blog, 19 September 2017:

https://www.weforum.org/agenda/2017/09/carbon-currency-blockchain-poseidon-ecosphere/ (link as of 03/09/18).

Cuff, M., Ben and Jerry’s Scoop Blockchain Pilot to Serve up Carbon-Offset Ice-Cream, BusinessGreen, 30 May 2018:

https://businessgreen.com/bg/news/3033147/ben-and-jerrys-scoop-blockchain-pilot-to-serve-up-carbon-offset-ice-cream (link as of 03/09/18).

Carbon on Blockchain, Poseidon Foundation: https://poseidon.eco/carbon.html (link as of 03/09/18).

Ecosphere+: https://ecosphere.plus (link as of 03/09/18).

Climate-Driven Water Scarcity Could Hit Economic Growth by Up to 6 Percent in Some Regions, World Bank press release, May 2016:

http://www.worldbank.org/en/news/press-release/2016/05/03/climate-driven-water-scarcity-could-hit-economic-growth-by-up-to-6-percent-in-

some-regions-says-world-bank (link as of 03/09/18).

Stoddard, R., How the Blockchain Could Transform Sustainability Reporting, GreenBiz, 24 April 2018: https://greenbiz.com/article/how-blockchain-

could-transform-sustainability-reporting (link as of 03/09/18).

The Roundtable on Sustainable Biomaterials, Pilot Project: Unlocking Blockchain’s Potential for Sustainability Certification, 2 May 2018:

https://rsb.org/2018/05/02/pilot-project-unlocking-blockchains-potential-for-sustainability-certification/ (link as of 03/09/18).

IBM, IBM Leads “Call for Code” to Use Cloud, Data, AI, Blockchain, for Natural Disaster Relief, 24 May 2018: http://newsroom.ibm.com/2018-05-24-

IBM-Leads-Call-for-Code-to-Use-Cloud-Data-AI-Blockchain-for-Natural-Disaster-Relief (link as of 03/09/18).

Galer, S., Blockchain to the Rescue: We Can Be Much Better at Weathering Natural Disasters, D!gitalist, 7 November 2017:

https://digitalistmag.com/improving-lives/2017/11/07/blockchain-to-rescue-much-better-at-weathering-natural-disasters-05486919 (link as of

03/09/18).

Ibid.

The Nine Planetary Boundaries, Stockholm Resilience Centre: http://www.stockholmresilience.org/research/planetary-boundaries/planetary-

boundaries/about-the-research/the-nine-planetary-boundaries.html (link as of 03/09/18).

The Earth Bank of Codes platform: https://earthbankofcodes.worldsecuresystems.com/ (link as of 03/09/18).

World Economic Forum, Harnessing the Fourth Industrial Revolution for Life on Land, 23 January 2018:

https://www.weforum.org/reports/harnessing-the-fourth-industrial-revolution-for-life-on-land (link as of 03/09/18).

McKie, R., “Biologists Think 50% of Species Will Be Facing Extinction by the End of the Century”.

Nobre, C. et al., “Land-Use and Climate Change Risks in the Amazon and the Need of a Novel Sustainable Development Paradigm”, Proceedings of the

National Academy of Sciences of the United States of America (PNAS) 113(39), 27 September 2016,

http://www.pnas.org/content/pnas/early/2016/09/13/1605516113.full.pdf (link as of 06/09/18).

Using GDP per Municipality of the Brazilian Amazon Biome and Extrapolating to Other Amazon Basin Countries Linearly Based on the Geographic

Extent of the Amazon Biome. Data sourced from the Government of Brazil, IPEA, Central Bank of Brazil (BACEN), IBGE – Instituto Brasileiro de Geografia e

Estatística and IPEA, 2015. Amazônia e At.

Nobre, C., Castilla-Rubio, J. C., “The Amazon’s New Industrial Revolution”, The Guardian, December 2016; Castilla-Rubio, J. C., “Nature-Inspired Design:

How the Amazon Can Help Us Solve Humanity’s Greatest Challenges”, World Economic Forum, 25 June 2017,

https://www.weforum.org/agenda/2017/06/bio-inspired-design-amazon-technology/ (link as of 06/09/18).

The Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization to the Convention on

Biological Diversity has been ratified by 100 countries to date.

PwC’s Global Blockchain Survey 2018: https://pwc.to/2w5VN4O (link as of 03/09/18).

Kasireddy, P., Blockchains Don’t Scale. Not Today, at Least. But There’s Hope, Hackernoon, 23 August 2017: https://hackernoon.com/blockchains-dont-

scale-not-today-at-least-but-there-s-hope-2cb43946551a (link as of 03/09/18).sss

Giungato, P., Current Trends in Sustainability of Bitcoins and Related Blockchain Technology, Sustainability, 30 November 2017:

http://www.mdpi.com/2071-1050/9/12/2214 (link as of 03/09/18).

DAOs are a new form of association that generate large-scale cooperation in cyberspace at the collective level; they are not companies and do not have

legal personality.

PwC’s Global Blockchain Survey 2018: https://pwc.to/2w5VN4O (link as of 03/09/18).

FinTech, Managing the Risks of Blockchain, 6 March 2018: https://www.bankingtech.com/2018/03/managing-the-risks-of-blockchain/ (link as of

03/09/18).

Smith, R, “What is the Environmental Impact of Bitcoin Mining”, CoinCentral, 11 June 2018: https://coincentral.com/what-is-the-environmental-

impact-of-bitcoin-mining/ (links as of 06/09/18)

Cocco, L., Banking on Blockchain: Cost Savings Thanks to the Blockchain Technology, Future Internet, 27 June 2017: http://www.mdpi.com/1999-

5903/9/3/25/htm (link as of 03/09/18).

Jezard, A., “In 2020 Bitcoin Will Consume More Power Than the World Does Today”, World Economic Forum Agenda blog, 15 December 2017:

https://www.weforum.org/agenda/2017/12/bitcoin-consume-more-power-than-world-2020/ (link as of 03/09/18).

Ibid.

Based on a back-of-the-envelope calculation drawing on data from Digiconomist (estimated annual enessrgy consumption of BTC and ETH),

blockchain.com (no. of blockchain daily transactions) and Etherscan (no. of ETH total daily transactions) over the period February to July 2018.

Chia: https://chia.net/ (link as of 03/09/18).

Deign, J., Energy Web Foundation Has a Fix for Blockchain's Biggest Problem, Green Tech Media, 23 April 2018:

https://www.greentechmedia.com/articles/read/energy-web-foundation-fix-blockchain-biggest-problem (link as of 03/09/18).

For example, the Global FX Code is a recent example of industry cooperation to achieve a common set of principles to raise the standards in FX markets

following the 2009 financial crisis (link as of 03/09/18).

Crypto-assets: Report to the G20 on the Work of the FSB and Standard-Setting Bodies, Financial Stability Board, July 2018:

http://www.fsb.org/2018/07/crypto-assets-report-to-the-g20-on-the-work-of-the-fsb-and-standard-setting-bodies/ (link as of 03/09/18).

www.pwc.com

At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 158 countries

with more than 236,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out

more and tell us what matters to you by visiting us at www.pwc.com.

separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information

purposes only, and should not be used as a substitute for consultation with professional advisors.