What if the utility of an open global ledger isn’t to create some form of magic internet money and its various derivatives, like tradable bored apes, but instead can help create system that creates a way to document, monetize, and trade greenhouse gas emissions?
These system could be infinitely adaptable, or programmable, to best reflect change atmospheric conditions and dynamic emissions streams. It wouldn’t require an international treaty or an act of congress to respond to real world conditions.
As a bonus, this system would be based on decentralized oracles and smart contracts that aren’t really owned or controlled by any kind of political interest. Instead, they just report and price emissions and feed that data to a market.
Since this is all on a distributed ledger, it becomes global, enjoying network effects rather than the constraints of geographical borders.
In order for the rest of this post to make sense, we’ll have to operate from a basic agreed upon framework: climate change is real and so far the policies and bureaucracies tasked with getting a handle on climate change are not up to the job of curtailing the emissions fast enough.
If you do believe in climate change then you also understand that it is an urgent problem but also one that for most people feels far off or fuzzy in some way.
Sure, you can personally do things to reduce emissions — like maybe bike to work instead of drive, or something along those lines — but how do we actually get a handle emissions at a planetary scale?
Well, one idea, is to use a planetary-scale technology, like the internet itself. Measure emissions, tokenize assets that generate carbon credits (like forests, for example) and then create a market using a distributed and globally accessible ledger.
But wait, I thought crypto was melting the polar ice caps? Now you are saying it can help with climate change?
Look, blockchain-based services like digital assets, apps, and decentralized everything use energy — they consume electricity.
Mainly this is a factor of enabling digital services. So far, there is no way to have digital services without consuming energy. The internet itself uses a massive amount of energy. But it also provides jobs, community outlets, makes life easier, and delivers lots and lots of entertainment.
Right now it feels taboo to talk about climate change in crypto circles. And I can only imagine that it feels equally taboo to float any kind of blockchain or crypto-based solution at climate change conferences.
Sure the energy debate is part of it. On some levels, it feels counter-intuitive to offer climate change solutions that require creating more emissions. But really, any kind of enforceable treaty of climate credit system is also going to require energy to enforce or maintain.
The difference is how the accounting works. The input of the energy required to maintain a treaty (like say paying for a global military presence, or a credit system that requires some kind of global accounting and financial services back end) also needs requires energy. It’s just that the input and outputs show up in different places.
But with a blockchain-based accounting and marketing-making service you should be able to measure kilowatt hours used in the proof-of-work or proof-of-stake system as a means of understanding energy input versus the goal of controlling emissions.
*Brief caveat here: Proof-of-work and proof-of-stake are mentioned here because they are the two dominant and time-tested methods of managing distributed consensus, which is the basis for effective public blockchain governance.
Maybe in the future a new method of consensus developed that is better suited to creating a global emissions monitoring and market system.
If you want different results, you need different solutions
Maybe you are following along so far. Maybe not. Either way, the likelihood of adopting any kind of oracle-based decentralized ledger technology to measure and monetize greenhouse gas emissions at any kind of meaningful scale at this point feels, well, futile.
But, if there is a silver lining, it’s that blockchain-based greenhouse gas emissions reduction utilize permissionless systems — or open money systems.
In other words, they just need to be built and then the market can decide if they will work. Again, this is way different than investing years in policy development or spending gobs of political capital to work towards some solution (which of course, as we have seen, can also be undone when the political winds change).
So if there is a takeaway here, it’s that we shouldn’t be afraid of digital systems. And we shouldn’t be afraid of digital systems that are trying to measure and control greenhouse gas emissions. Yes, they use energy, but so does just about everything else.
The only way to solve an existential threat like rapid global climate change is to expend energy.
At this point, it’s just a matter of deciding how we spend that energy. We can continue down the path of political in-fighting, or we can start to find market-based solutions that make measuring, documenting, and controlling emissions something that has an economic premium.