New analysis shows over 90% of major forest, land and agriculture companies that have committed to net-zero could be at risk of missing their climate commitments due to a lack of action on deforestation.
Blockchain can protect our trees. Here’s how
The EU Green Deal is an unprecedented package of legislative measures aimed at making the EU climate neutral by 2050. But as is often the case, how seismic policy changes are implemented across 27 countries in a way that is practical, feasible and achievable, is where the real challenge lies.
Nature-based solutions are becoming an integral part of government policies worldwide as we all come to realise that protecting and sustainably managing natural habitats is critical to tackling climate change.
Clean technologies are clearly a huge part of any solution.
Whilst great progress is being made, it is important we are mindful that even with heavy government support and billion-dollar investor backing, it will be some time before we see innovations such as CO2-to-fuel and artificial photosynthesis rolled out to the mass market.
And time is not something we have.
We therefore need to consider alternative solutions, and the world’s greatest clean tech solution stands before our very eyes: trees.
How about if we not only protected but also optimised trees – using blockchain? It presents a very interesting opportunity, and here’s why:
1. It creates a single market for forest data apt for tracking progress
As they say, what gets measured gets done. The first step is would be to digitise the EU’s 182 million hectares of forest in its entirety. We need the data on everything from forest inventories (animals and plants) to carbon capture, and to secure this data to a private, permissioned blockchain.
An EU forest database would substantially improve transparency, connectivity and accessibility for all member states. Countries would be able to measure the results of various experiments, innovations and policies.
They could learn and share knowledge across borders, without needing to request and wait for individual country reports. This would save the EU and individual countries time and money.
Through the use of blockchain, this data would be time-stamped and tamper-proof, ensuring EU privacy, data protection and competition rules are fully respected. And because blockchain is decentralised, this data would not sit on a central database in Brussels, “owned” by the EU. It would reside with the individual forest owners who would give permission for the EU and others to see their data.
2. It improves the traceability of wood in supply chains
Illegal logging and related trade are a major problem. Paperwork is being faked and people are being bribed; the authorities cannot have their eyes everywhere. Such practices cost governments billions in terms of lost revenue, cause environmental damage and delay sustainable development.
Europeans also increasingly want the guarantee that their shopping habits are not funding ecosystem destruction. They want to know where the goods they buy come from.
With its enhanced data security and traceability, blockchain can help tackle trust in wood and other natural-resource supply chains to guarantee specific attributes and other relevant identity information. Not to mention the fact it can facilitate real-time track-and-trace timber audits.
3. It incentivises forest owners to reverse deforestation
The European Green Deal and the European Biodiversity Strategy indicate that it is crucial for the EU to halt biodiversity loss by protecting and restoring forests. And yet to achieve this, there needs to be a financial incentive to encourage the preservation and reforestation of land. This is where blockchain becomes a really exciting catalyst:
Once all the information about a forest has been digitised, the data can be optimised to help forest owners unlock new capital. Currently in early development, there are specialist fintechs that are using blockchain to build a new financial mechanism for real-world assets – forests included – known as “digital twins”. These twins can be traded on the financial markets, similarly to a security or a share.
Through utilising blockchain to allow investors – including the general public – to invest in a forest, forest owners who may be considering deforesting land for commercial use to raise money, could potentially be persuaded to change their mind.
4. Increase investor access and stimulate cross-border investment
Digitised forests that have been optimised for direct investment would allow the EU’s 447 million citizens to invest in forests themselves, choosing which individual forest they want to support. Not to mention the many global investors seeking opportunities to support ESG initiatives too.
As well as reducing the barriers to entry by creating a new and affordable way to invest in forests, blockchain would bring in a new level of transparency and trust around forest data. It would, in turn, enable investors – large and small – to carry out sophisticated cross-border due diligence on a forest, and to do so in real-time. They would have all the records they needed accessible in one trusted portal via their desktop or mobile device.
This is game-changing for cross-border investment, and especially for smaller EU countries who might be struggling to access urgently needed international investment.
Over 40% of the EU is covered in forests, absorbing 417 million tonnes of CO2 equivalent, which corresponds to around 9% of total GHG emissions (4,450 million tonnes), compared to less than 7% (375 million tonnes) in 1990.
Helping the EU turn over a new leaf
Achieving climate neutrality by 2050 is going to take tremendous courage, tenacity and collaboration from EU leaders. But achieve it they must as the climate emergency is the greatest crisis that humanity has faced in living memory.
This is why I believe the EU needs to create a European Forest Union, powered by blockchain.
The EU already understands that trees play a vital role in reversing climate change and in achieving their 2050 carbon neutrality target. In order to ensure efficiency, cost effectiveness and measure progress, having one unified EU digital forest platform makes sense.
Blockchain’s data privacy promise adds multiple advantages
Making the platform blockchain-based would provide member states with the comfort they will likely seek around national data privacy. It also presents a new way to fund both forest preservation and research on solutions to tackle the climate crisis – all without any need to increase EU budgets.
That’s a very compelling prospect.
And what would investing in a blockchain-based forest solution signal to the rest of the world? That the Commission is walking the walk, not just talking the talk about positioning Europe at the forefront of blockchain innovation.
It’s a win-win-win for the environment, for digital innovation and very possibly for European economic growth too.
New analysis, commissioned by the UN Climate Change High-Level Champions, finds a five-fold increase in companies committed to net-zero from the forest, land and agriculture sectors — the second highest emitting industry after energy.
Cutting nature out of the equation is equivalent to entering the ring with one arm tied behind your back, says Maria Mendiluce, CEO, We Mean Business Coalition.
CEO Briefing “Leading a sustainable land use transition” argues firms should ensure land is managed well to improve resilience and sustainability.