How Blockchain Could Create Incentives to Protect the Environment

According to Dr. John Henry Clippinger, Research Scientist at MIT Media Lab, City Sciences Group and co-founder of Token Commons Foundation, the world is transitioning towards blockchain and smart contracts for managing its carbon emissions.

While speaking with HackerNoon, Clippinger noted how candidates in the first Democratic debate this year discussed negative carbon and the need to capture carbon across economic sectors. Democratic presidential candidates Joe Biden and John Delaney are calling for net-zero carbon emissions for 2050.

“The time for carbon capture is now,” he said, noting how blockchain could be a technology to help society avert climate catastrophe.

Clippinger, who is a researcher in artificial intelligence, an author and currently works at MIT Media Lab, says the problems with implementing policy is that only particular sovereign jurisdictions can enforce them.

Today, Cap and Trade systems are usually self-attesting and self-reporting. On a blockchain system, renewable credits can be more closely tracked. “When you have algorithm-based contracts, they can be independently audited,” he said. “Say a particular solar installation generates so much sustainable energy at a certain time of day. There's a smart contract that analyzes that data, and then on the basis of that data signs a certain credential and maybe some kind of credit for that.” That data then gets recorded in the blockchain.

These are things that can be automated, according to Clippinger. “So, you're able to have basically a very transparent and tamper-proof way of saying whether it's compliant or not. The contract itself can be a self-contained algorithm that can be independently verified. When you're doing anything to scale and you've got hundreds of billions and trillions of IoT devices out there,you're going to have to do something like that.”

Such a system could be necessary to achieve the ​United Nation's vision of planetary climate neutrality​, which means net-zero carbon dioxide emissions by balancing carbon emissions with carbon removal.

“The problem is we have to take carbon out of the atmosphere,” says Clippinger. “So we need to build living systems rather than extractive systems. To be able to get people and companies and institutions to start to transition from extractive to regenerative practices is a very important point. It is the only way that we're really going to deal with climate change in a really viable and sustainable way.”

Human society is totally out of balance with nature, Clippinger says. “This is reflected in the collapse of ecosystems everywhere and climate instability. So, the whole point of having an independent ledger that we can trust, and with which you can record actions and implementations that affect that restoration of balance [while being] independently verified is absolutely critical going forward. That's one of the great appeals of the blockchain.”

Clippinger rhetorically asks while we talk: “Are we getting into an [environmental] deficit? Are we really putting carbon back into the atmosphere? Are we creating imbalances in our ecosystems? How do we adjust our behavior? This is the kind of thinking we are going to have to adopt at the global scale.”

Clippinger, who has worked at MIT’s Media Lab for about twelve years (and spent twelve years at Harvard before that) has always been interested in technology as a way of implementing policy and change.

“Anyone who is familiar with biological systems knows that we're really past an inflection point,”he says. “The U.N. document forecasts the extinction of millions of species. We are headed in a very precipitous way and there's no doubt about it. The data keeps getting stronger and more unequivocal.”

Clippinger co-founded ​Swytch​, which uses the blockchain to bring together data, networks, and incentives for the world to finally adopt renewable energy at scale. Three years ago, he helped found the Token Commons Foundation, based out of Zug Switzerland, whose Mission Statement begins with the goal, "To build a more sustainable and equitable future through the creation of a commons-based blockchain protocol"

The TCF protocol implemented a commons governance structure that enables autonomy and self-determination while encouraging cooperation and inclusion. TCF Protocol used Swytch as aunit of account for verification of sustainable energy.

One project that Clippinger mentions is ​Regen Network​, a global marketplace and contracting platform for Earth's ecosystem assets, services, and data.

The Massachusetts-based company is developing the digital infrastructure for Earth's balance sheet to streamline carbon-sequestering solutions. Regen Network’s protocol and token (XRN) allow teams to build an information technology infrastructure to account for ecological value.

The idea behind Regen Network is to enable coordinated, transparent action to increase ecosystem health for the benefit of all stakeholders. Regen Ledger is designed to be a cost accounting machine, an ecological data marketplace, a distributed computational network, and a biospheric monitoring device.

Clippinger discussed how Regen Network is leveraging blockchain technology to create incentives for shifting to regenerative agriculture and land management, and to address systemic problems by developing a system to incentivize, reward, track and verify ecological impact from regenerative agriculture and regenerative systems – as well as to capture carbon to keep it out of the atmosphere. The Proof-of-Stake Regen Network is building on the ​Cosmos Network​ SDK.

One of its current pilot projects, with the Rainforest Foundation, connects donors directly with indigenous communities on the frontlines of rainforest protection by monitoring ecological contracts made with local communities in the Amazon. The smart contract defines the project, including who is involved, what is being measured, what will be verified, which rewards are linked to verified changes, and which data is written to the blockchain. Once a contract has been signed, participants use the Regen Network to track progress.

The blockchain enables a holistic approach to avert climate catastrophe. The blockchain and distributed ledger technology can fundamentally transform everything about how the world monitors and manages its carbon footprint.

“We do need such a ledger,” says Clippinger. “We do need to create incentives to [avert climate disaster].” Clippinger believes blockchain can help people better manage resources.

“Crypto is coming,” he says. “Some people associate crypto with bitcoin and the whole crypto-anarchist movement, but cryptocurrency and blockchain are far bigger than that. The whole concept of programmable money and currency is something that's been in the works independent of that whole bitcoin world.

He adds: “And you're seeing that now with major players going in and creating stable coins or all-new kinds of infrastructure. You've got JP Morgan going in and creating their own stablecoin, their own currency. You've got Fidelity going in with digital assets. You got now the big announcement out of Facebook where they want to own this space with Libra. This is all going big-time mainstream. How it gets designed is going to be a big shakeout.”