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Blockchain Contributions for the Climate Finance

von Leonardo Paz Neves, Gabriel Aleixo Prata

Introducing a Debate

Encouraged by the UNFCCC and the Paris Agreement recognition of the importance that technology has on mitigation and adaptation, and their call for the critical rolethat innovation has to foster and enable those technological solutions, a variety of actors has searched for alternatives. The Distributed Ledger Technologies (among which Blockchain has gained worldwide recognition) is undoubtedly one of the forerunners in this process. This report hopes to foster an informed debate in order to demystify some general ideas regarding the technology and to deepen the level of the debate.

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In recent years, the politics on climate finance have gained a lot of attention from very different perspectives. It became a crucial measure to incentivize finance flows to fight climate change as a whole. Meanwhile, a global climate finance architecture has been created, facilitated by major events like the Paris Agreement. Currently, institutions like The Green Climate Fund are working on the implementation of concrete projects to adapt to the impacts of climate change, or to reduce CO2 emissions.

As the global activities and the amounts on climate finances are increasing, questions regarding transparency and efficiency are being raised and new technologies are coming to the focus of major stakeholders. Blockchain Technology seems to be a very promising new approach tool to overcome centralized structures and remain reliable. Especially for climate finances, it can help to earn the donors’ trust by offering a maximum of transparency. In addition, it increases the efficiency of climate finance flows as a whole. May be the most important issue is that it can bring a lot of new stakeholders into the climate finance circle by reducing complexity. Startups are developing smart phone apps that allow everybody to work on climate finance. To fight against climate change it could be the next level for being much more effective, as climate finance becomes a very decentralized issue, concerning more and more people.

The enclosed study is part of the starting debate on crossing climate finances with Blockchain-technology. It gives the context and shows the connection. And more importantly, it gives certain recommendations on how it can be used to improve climate finances. The study was born from the first Workshop on this topic, which was held in Rio de Janeiro, together with our partner the FGV International Intelligence Unit. This Workshop was a starting point for our Regional Programme Energy Security and Climate Change in Latin America - EKLA, of the Konrad Adenauer Foundation - KAS, to find out how Blockchain can be used in environmental governance. We wish you all an interesting read!

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