3 Ways in Which Web3 Is Advancing Sustainability Initiatives
As countries from across the globe come together to collaborate on building sustainable solutions that tackle the harmful effects of climate change at COP27—the 27th annual UN meeting on climate—Web3 is increasingly becoming part of the climate conversation. Web3 is gaining attention from leading institutions and innovators because it enables more transparent, interoperable, and effective climate markets and empowers emerging markets to build resilience against climate risks.
Underpinning these solutions is the core Web3 infrastructure of blockchains, smart contracts, and oracles. These technologies support more accurate reporting and verification, automated incentive structures, and interconnected applications that help establish more impactful green initiatives. As the industry standard for on-chain data, the Chainlink oracle network provides the climate ecosystem with enterprise-grade middleware that enables high-integrity, interoperable, and efficient climate solutions.
Below we explore examples from Liquidstar, Open Earth Foundation, and Arbol that show exactly how Web3 is helping unlock impactful sustainability initiatives and empowering emerging markets.
Example 1: Beyond-The-Grid Energy Solutions To Serve Remote Communities
In parts of the developing world where large parts of the population live in rural communities, an estimated one in 10 people lack access to electricity. Because it’s expensive for utility companies to build power grids that serve these areas, 600M+ people are currently using liquid kerosene to meet their basic energy needs.
That’s why Liquidstar is developing a new category of energy distribution powered by Web3. The solution uses modular solar-powered smart batteries that can be distributed to remote communities who need them. By integrating the energy system with smart contracts through a decentralized protocol, energy can be seamlessly bought and sold through an autonomous utility loop. Ultimately, this provides remote communities with access to electricity, enabling schoolchildren to do their homework after dark, making streets safer with lighting, and much more.
Example 2: Open Digital Infrastructure To Advance Carbon Capture
Carbon offset initiatives can make a real impact on climate change by reducing greenhouse gas in the atmosphere. However, it can be a long and inefficient process that’s vulnerable to double counting and other manipulations, undermining its impact.
What’s needed is a faster and more robust carbon measurement mechanism that transparently delivers higher-quality data. Blockchain and oracle technologies can help capture and store this data, ultimately creating more stable, scalable, and accurate carbon credit markets.
In support of advanced carbon markets, Open Earth Foundation is leveraging these Web3 technologies to build an advanced carbon pricing mechanism that accounts for policy scenarios, various economic variables, energy projections, and other social costs of carbon.
Example 3: Parametric Crop Insurance To Protect Farmers
Drought, floods, and extreme heat impact farmers in the developing world far more than those in developed markets. The risk to their livelihoods is compounded by the extreme cost of traditional crop insurance in emerging markets due to inefficient and costly underwriting, distribution, and claim-handling costs. In total, it’s estimated that over $1 trillion worth of crops owned by subsistence farmers globally are uninsured each year due to unaffordable insurance products.
Arbol is seeking to change that with a Web3 solution. By leveraging smart contracts and climate data through the Chainlink Network, Arbol is able to offer subsistence farmers insurance against extreme weather events that damage their crops. This is possible by using high-quality weather data that’s delivered on-chain in a transparent manner to trigger automated payouts to farmers when climate events occur.
Web3 protocols are advancing carbon credit programs, energy infrastructure, carbon markets, parametric insurance, and more through decentralization and automation. Critically, these Web3 systems are able to deliver solutions across emerging markets that address communities’ needs in ways that previous initiatives could not. While the above projects are pioneers within the space, there are many more opportunities for climate initiatives to increase their effectiveness, transparency, reliability, and scalability through Web3.