Technology will play a central role in tackling the climate crisis. From carbon capture to the evolution of renewable technologies, innovation will be front and centre in our efforts to transition to a more sustainable way of living. But one area of technology often overlooked is Web3, a relatively new term that encompasses everything from decentralization, blockchain technologies, and token-based economics

Web3 can be seen as the third iteration of the web, based around the idea that the web should be decentralized, with its power taken out of the hands of corporations and put back into the hands of its users.

In order to understand Web3, we need to go back to the early days of the web in the 1990s – when the web was used mainly as a place to read content, rather than create it, although some users would communicate with each other on message boards or post their thoughts on a blog. Web2 emerged around the mid-2000s and was characterized by the rise of global network platforms, including social media giants such as Facebook and Twitter.

It also centralized search through Google’s dominance, while e-commerce – through the likes of Amazon – took off. This era also spawned the ‘sharing economy’ with companies such as Airbnb and Uber being valued in the billions of dollars. Web2 saw the rise of the internet creator, with people around the world building careers as Instagram influencers, podcasters and YouTube vloggers.

Web3 then is the latest iteration, one which, according to its proponents, will see decentralized control, open source software and transparent infrastructure.

Overcoming Obstacles

“Web1 was read, then Web2 was read and write and Web3 is read, write and own,” says Alexandre Gellert Paris, Associate Programme Officer at UNFCCC, and a Web3 expert.

Climate Ledger Initiative’s 2021 Navigating Blockchain and Climate Action report highlighted a few key obstacles to blockchain – a key part of Web3 – adoption, including the absence of a defined legal and regulatory framework, a lack of awareness and understanding of the technology and the environmental costs of it. These environmental costs are due to how the blockchain network is set up: essentially a record of transactions across multiple high-powered computers that are linked in a peer-to-peer network. And those computers use a lot of electricity, often in countries where the vast majority of electricity is generated by fossil fuels. According to Digiconomist, one bitcoin transaction has the same carbon footprint as watching more than 51,000 hours of YouTube videos.

Yet Paris is optimistic that the energy usage of cryptocurrencies will be reduced in the future. “A big environmental change is the move from proof of work to proof of stake,” Paris says. Traditionally miners would need their computers to solve complex math problems, to create new coins, which used up huge amounts of electricity. “Proof of stake means the amount of electricity used is dramatically reduced – for example when Ethereum (community-run tech that powers the cryptocurrency, ether) moves to proof of stake later this year, the amount of electricity required per transaction will be reduced by more than 90 per cent,” he says.  

The upsides to Web3 are huge, including tackling issues around transparency. Blockchain technology can ensure more transparency around greenhouse gas emissions and make it easier to track and report reduction emissions, addressing possible double counting issues. Web3 – if Parties wished – could serve as a tool to monitor the progress made in implementing the Nationally Determined Contributions under the Paris Agreement. Web3 is part of the proposed concept of “nested accounting” – where emissions are accounted for at one level of analysis (e.g., a specific forest conservation project or a specific facility, such as a power plant) and are factored into emissions at a higher level of analysis (e.g., across a municipality, region, or country).

Increased Transparency

Another area where Web3 could be useful is in the Monitoring, Reporting and Verification (MRV) of carbon markets. Currently, the process is often time-consuming, expensive and error-prone, as it relies on manual information recording or in-person surveys. Yet, digital MRV will make the process easier, quicker and more transparent, and ultimately make the carbon markets more efficient. Paris took part in the Sustainable Blockchain Summit organized by Protocol Labs in Paris in July, which saw a number of Web3 and sustainability experts discuss the future of Web3 and try to figure out what Web3 sustainability tools are fundamentally impossible with Web2.

“The event highlighted the fact that multiple stakeholders in this space are passionate about doing more for the planet,” Paris says. “They just need to enhance coordination and the proper incentive schemes aligned with the Paris Agreement goals.”

Artificial Intelligence (AI) is a key component of Web3 and is already being used to fight climate change. Planet, a San Francisco-based satellite and AI company has deployed the largest constellation of Earth-observing satellites in history. The satellites image the entire planet in hi-res every day, and the data is used to monitor ecosystems, improve disaster response and accelerate climate action. Governments in the Tropics use the data to check for indications of illegal clearances in forests which can be a precursor to illegal mining or logging, while Allen Coral Atlas map and monitor every coral reef from space, and its data has been used to create half a dozen new marine protected areas. Another group using Planet’s data is ClimateTRACE, which aims to monitor every single emission source on Earth, from factories to farms.

Token Progress

Tokenisation is another area where climate action could be feasible. To give just one example, NFTs – non-fungible tokens ­– are unique digital assets that can be traded and are being used to protect the environment.  Yet there are issues about the emissions of NFTs as well. In March 2021, Austrian architect Chris Precht announced that he was “[abandoning] plans to sell digital artworks backed by NFTs due to the environmental impact of mining the digital tokens.” He discovered that if he had created 300 NFTs, he would have used the same amount of electricity he would ordinarily have used in twenty years.

Yet, the possibilities around Web3 and climate action are endless, and the coming years will see more and more of those possibilities come to fruition.

“There is a growing community reimaging governance of our global public goods,” Paris says, “I’m excited to see the regenerative solutions that are being built on Web3 that could not have existed before.”

Six Web3 Climate Projects

Wood Tracking Protocol

This project aims to create a new means of tracking timber in Peru by developing a tamper proof digital system based on Blockchain technology. Blockchain will be combined with new digital protocols for physical verification and authentication in a bid to stop illegal logging and reduce deforestation in the Amazon by bringing transparency and traceability to the timber industry.

Gainforest

Gainforest won the Hack4Climate competition at COP23 and describes itself as a “transparency-as-a-service platform using artificial intelligence to measure and reward sustainable nature stewardship.” It generates ‘NFTrees™’ – essentially unique digital assets – that correspond to land areas around the world.

Climate Chain Coalition

The Climate Chain Coalition is an open global initiative to support to advance blockchain (distributed ledger technology) and related digital solutions (e.g. IoT, big data) in order to help mobilize climate finance and enhance MRV (measurement, reporting and verification) to scale climate actions for mitigation and adaptation.

The Crypto Climate Accord

The Crypto Climate Accord is a private sector-led initiative for the entire crypto community focused on decarbonizing the cryptocurrency and blockchain industry. So far, more than 250 companies and individuals spanning the crypto and finance, technology, NGO, and energy and climate sectors have joined the Crypto Climate Accord.

Horizon Zero Project

Charles Cannon and Linda Jirouskova from the Rocky Mountain Institute (RMI) are leading RMI’s Horizon Zero project, which aims to transform climate disclosures and more comprehensively track and trace emission throughout supply chain operations. The project focuses on the blockchain principles of security and verifiability; shared records of truth; unequivocal ownership and responsibility; clear provenance; and decentralization.

IFC Blockchain

International Finance Corporation (IFC), part of the World Bank, has announced its support for a blockchain-enabled platform to trade carbon credits, with the aim of attracting institutional investors to climate-friendly projects in emerging markets. IFC also launched the Carbon Opportunities Fund – seeded with $10 million –- to provide the carbon credits on blockchain, and has identified 250,000 to 300,000 tonnes of credits to be bought by the end of 2022.