Web3 refers to a new generation of internet technologies that aim to empower individuals and communities with greater control over their online activities and data. It is a vision of the internet that is more open, transparent, and user-centric, with increased privacy, security, and ownership of digital assets. Web3, also known as the decentralised web or the blockchain-powered web, has the potential to contribute to ensuring a safe and sustainable Earth in several ways. Is it possible to ideate on ways in which Web3 can impact climate actions positively? Is it possible to use Web3 for better climate outcomes? The answer seemingly is yes, and some of the possibilities in the newer future are these.
- Transparent Supply Chains: Web3 can enable transparent supply chains by utilising blockchain technology to trace and verify the origin and movement of goods, materials, and products. This can help prevent illegal logging, wildlife trafficking, and other environmentally harmful activities by providing a verifiable record of the entire supply chain, promoting responsible sourcing, and ensuring compliance with environmental regulations.
- Decentralised Energy Systems: Web3 can support the development of decentralised energy systems powered by renewable sources such as solar, wind, and hydro. Blockchain-based platforms can enable peer-to-peer energy trading, allowing individuals and communities to generate, share, and sell excess renewable energy, leading to increased adoption of clean energy and reduced reliance on fossil fuels.
- Carbon Credits and Offsets: Web3 can facilitate the creation and trading of digital carbon credits and offsets on blockchain platforms. This can help incentivise and reward sustainable practices, such as reforestation, renewable energy generation, and emission reduction projects, by creating a transparent and verifiable system for tracking and trading carbon credits, leading to more effective and efficient carbon markets.
- Tokenised Environmental Assets: Web3 can enable the tokenisation of environmental assets such as forests, wetlands, and oceans, creating digital representations of these assets on the blockchain. These tokens can be used for conservation financing, allowing individuals and organisations to invest in and support the protection and restoration of critical ecosystems, promoting biodiversity conservation and ecosystem resilience.
- Decentralised Governance: Web3 can enable decentralised governance models that promote community-driven decision-making and consensus-building, empowering local communities to participate in environmental decision-making processes. This can lead to more inclusive and participatory approaches to environmental management and conservation, fostering greater engagement and ownership among stakeholders and promoting sustainable practices.
- Conservation Monitoring and Reporting: Web3 can enable decentralised, crowd-sourced monitoring and reporting of environmental data, such as air and water quality, deforestation, wildlife populations, and climate change impacts. This can allow for real-time data collection, verification, and sharing, enabling better decision-making and accountability in environmental conservation efforts.
- Circular Economy and Waste Management: Web3 can facilitate the transition to a circular economy by creating decentralised marketplaces for buying, selling, and swapping used and recycled products, incentivising recycling and reducing waste generation. Additionally, blockchain can be used to track and verify the recycling and disposal of waste, promoting responsible waste management practices and reducing environmental pollution.
- Green NFTs and Digital Art: Web3 can promote sustainability in the art and creative industries through the use of green Non-Fungible Tokens (NFTs) and digital art. Green NFTs can be designed to have a low carbon footprint by utilising blockchain networks with low energy consumption, and digital art can help reduce the environmental impact associated with traditional art materials and transportation.
- Smart Contracts for Environmental Agreements: Web3 can utilise smart contracts to create enforceable agreements and incentives for environmental protection and conservation. For example, smart contracts can be used to establish agreements between stakeholders for sustainable land use, biodiversity conservation, and ecosystem restoration, with incentives or penalties automatically triggered based on predefined conditions.
- Climate Risk Management: Web3 can facilitate climate risk management through decentralised insurance and risk-sharing mechanisms. Blockchain-based platforms can enable peer-to-peer or community-based insurance for climate-related risks, such as extreme weather events or sea level rise, providing more affordable and accessible insurance options for vulnerable communities.
While these ideas will have varying degrees of commercialisation currently, and differing ways of adoption, it is matter of time that it could move to commercial reality. But then, as with any emerging technology, Web3 has its share of issues. For a technology that can help in climate action, also has criticism that it poses concerns to sustainability efforts.
- Energy Consumption: One of the criticisms of blockchain technology, which underlies many Web3 applications, is its energy consumption. Some blockchain networks require significant computational power and electricity to maintain their operations, leading to concerns about carbon emissions and environmental impact.
- E-waste and Resource Consumption: Web3 technologies, including blockchain-based hardware devices and digital wallets, may contribute to electronic waste (e-waste) and resource consumption. The production, use, and disposal of electronic devices and infrastructure for Web3 applications may have environmental implications, including resource depletion, pollution, and waste generation.
- Scalability and Efficiency: The current state of Web3 technologies, such as blockchain, may face challenges related to scalability and efficiency. Some blockchain networks have limited transaction throughput, which may result in delays and increased energy consumption. Improving the scalability and efficiency of Web3 technologies will be critical in reducing their environmental footprint.
- Inclusivity and Accessibility: Web3 technologies may require access to digital infrastructure, including internet connectivity and computing devices, which may not be accessible to all communities and individuals. This may result in a digital divide, where certain groups are excluded from participating in Web3 applications and benefiting from their potential sustainability impact.
- Regulatory and Governance Challenges: Web3 technologies operate in a decentralised and borderless environment, which can pose challenges in terms of regulatory oversight, governance, and accountability. Ensuring that Web3 technologies are used responsibly and do not contribute to environmental harm may require controls and checks.
Web3 can empower individuals, communities, and organisations to take tangible steps towards mitigating climate change and building a more sustainable future. But then, my guess is as good as yours in how long would the above wishlist need to be translated into reality.
Dr. Srinath Sridharan - Author, Policy Researcher & Corporate Advisor
Twitter: @ssmumbai
Columnist
Strategic counsel for over 27 years, with leading corporates across diverse sectors. Independent Director across multiple sectors. Advises organisations on the intersection of finance, digital, consumption economy, GEMZ (Gig Economy, Millennials, gen Z) & ESG. Coaches & mentors senior leaders. Active engagement across industry-growth policy conversations & public policy issues. Visiting faculty at various management schools and with regulatory learning centres. Prolific media columnist across topics he works with. He is also the Editor and co-author of ‘Time for Bharat’ (book on public governance). Visiting Fellow at the Observer Research Foundation. Posts all published work at https://srinath.blog
