Blockchain vs Climate Change: Natural land use
Exploring applications of blockchain technology to reduce and prevent greenhouse gas emissions across different uses of natural land.
Natural land, particularly forests, is a major source of carbon sequestration globally. Conversely, agriculture is highly polluting, and is attributed to 14% of GHG emissions each year. Population increases and consumer desires for higher meat content diets are putting forests under pressure as the land gives way to farming. This not only reduces the overall carbon sequestration effect of trees byreplacing it with agricultural land, but releases stored carbon as felled wood is burned or decomposes. The following three ideas describe blockchain applications across natural land use, exploring how the technology can enable an increase in the protection of natural ecosystems and more productive farming techniques that would reduce overall agricultural land area requirements and reduce the burden on forested areas.
Use case 1: Nitrogen credit trading
Time horizon: Short term
Nitrogen oxide is a GHG 300 times more potent than CO2. Nitrogen-based fertilisers are widespread in agriculture across the world, and although the majority is absorbed by soil and plants a fraction oxidises. Blockchain technology could be used to enable a decentralised nitrogen-credit trading platform, similar to that described for carbon and cement in the electricity and industry sections of this series. I won’t delve into the detail in this section, however a credit system could incentivise farmers to reduce their consumption of nitrogen-based fertilisers, thereby reducing the release of nitrogen oxide into the atmosphere.
Use case 2: Shared ownership of precision farming equipment
Time horizon: Medium term
One of the ways to reduce the land required by agriculture, and as a result its climate impact, is to increase the productive capacity of land already in use. Current farming practices tend to be generalised and not adapted to the requirements of the land on a microscale, resulting in unsustainable methods and sub-optimal yield realistation. Precision farming equipment that could enable small scale practice optimisation, such as UAVs enabled with hyperspectral cameras to enable precision weeding and targeted pesticide / fertiiliser application, is expensive. A blockchain platform could enable autonomous management of fractionally owned precision farming equipment, reducing the cost barriers to farmers to purchase and operate this equipment and resulting in an increase in its uptake. The resultant output increase of current agricultural land through the use of such equipment would likely reduce the need for land expansion and the resultant carbon cost as discussed in the section’s introduction.
Use case 3: Crowdfunded land conservation
Time horizon: Medium term
Individuals are often looking for ways to reduce their personal contribution to climate change, however a method such as land conservation is often unattainable due to the high cost and administrative barrier of land purchase. A blockchain ledger and tokenisation of regions could enable large areas of land to be transparently crowdfunded with minimal friction. This would enable everyday consumers, who may not be as wealthy as Yvon Chouinard, to buy up fractions of land for conservation to protect the carbon sequestered there. For example, peat bogs are the largest source of sequestered carbon on earth but are generally only profitable to their owners if sold as fuel, resulting in a release of this carbon into the atmosphere. By enabling the crowdfunding of peat bog ownership, land owners can realise value through crowd sales whilst also enabling climate conscious consumers to directly contribute to conservation.
Of course this would not stop other actors from buying swathes of land which could then be deforested or exploited by other means, but reducing the cost barrier of purchase may lead to a net overall increase in conservation by opening up the market to individual altruistic consumers.
Natural land use and its impact on climate change varies massively from contribution to prevention. High cost is a major barrier to enabling more efficient agricultural techniques or improving the accessibility of land conservation efforts to the mass population; two areas that can enable a higher proportion of natural land to be dedicated to GHG emission prevention. DLT can enable shared ownership of costly assets, whether precision farming equipment or of land itself, to enable more people to drive the climate change-reducing the benefits from such technologies or conservation schemes. In addition, blockchain can be applied to a nitrogen credit market to incentivise the reduction in usage of nitrogen-based fertilisers and the unintended consequence of nitrogen oxide-release into the atmosphere.
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