The World Economic Forum launches Crypto Sustainability Coalition to address the intersection of web3 and climate action

World Economic Forum Launches Alliance to Use Web3 and Blockchain for Positive Climate Action

The World Economic Forum is launching a new public-private partnership to leverage Web3 technologies to better support positive climate outcomes as awareness of the environmental impact of blockchain technologies grows.

The Swiss-based NGO on Wednesday announced the Crypto Sustainability Coalition, which consists of 30 partners at the intersection of sustainable development, web3 technologies, cryptography and blockchain, during a session in the United States.

The alliance plans to support research and development, share best practices, influence regulation and includes multidisciplinary members spanning from the Solana blockchain platform, to sustainability-focused nonprofits such as Climate Collective, to the University of Lisbon.

Crypto technology has recently made strides in the field of sustainability, with Ethereum Merge, reducing the second largest energy consumption in the blockchain. However, the industry as a whole remains energy intensive. Bitcoin, the largest cryptocurrency by market capitalization, has an annual carbon footprint that matches that of Greece, and its energy consumption is similar to the United Arab Emirates, according to the Bitcoin Digiconomist’s Energy Consumption Index.

“The goals and methods that the cryptocurrency industry needs to decarbonize are very complex,” Amy Westervelt, Regional Director for the Americas at Energy Web, said during the online conference. The Energy Web builds decentralized and open source operating systems focused on decarbonization. “I think we need collaboration from existing NGOs, climate scientists, utilities, and from those industries out there, to make sure we apply these truly innovative and unique tools that we have in the right direction,” Westervelt added.

When less is better

The primary function of the alliance is to analyze the energy and material consumption of the cryptocurrency industry, to better understand its impact on climate and nature. However, the group also plans to proactively investigate ways Web3 can help countries achieve lower carbon emissions targets.

Blockchain technologies, in particular, are well suited as the home of carbon credit markets, according to Josh Knauer, co-founder of ReSeed Carbon Assets and co-chair of the Alliance’s Working Group on Carbon Credits. Reseed Carbon Assets is a company that sells what it calls “ReSeed Carbon Protection Credits” which are digital tokens that refer to blocks of farmland where a metric ton of carbon is stored in vegetation and soil.

Using satellite imagery and artificial intelligence, a buyer of a carbon protection credit can secure ownership of the stored and protected carbon, with prices fluctuating in a free and decentralized market, according to the company’s website.

Knauer adds that the blockchain is inclusive and extends access to carbon markets for even the world’s smallest farmers, forest officials and indigenous communities. “This technology can help create coordination, transparency and efficiency in systems, and it can provide more insight and traceability when it comes to work, commitments and investments,” he said, adding that it helps ensure that farmers compensate themselves fairly and benefit as the price of carbon rises.

More environmentally friendly crypto mining

In addition, the Crypto Sustainability Alliance seeks to support more efficient crypto-mining practices as the industry consumes huge amounts of energy to conduct transactions. However, the decentralized and flexible nature of miners may only allow them to operate during off-peak times, when other sources consume less power from the electric grid, according to Lucia Gallardo, founder and CEO of EmergeFrance.

Additionally, thermal waste from crypto-mining machines can be recycled and offer a new business model for utilities and investors looking to develop renewable energy microgrids, Gallardo said. She added that EmergeFrance has worked with clients looking to recycle heat from crypto mining, turning it into a source for heating and powering utility water systems.

Other key partners in the alliance include IT company Accenture, Ripple Labs, Inc. , the company that develops the Ripple payment protocol and exchange network, and the environmental organization Rainforest Partnership. The alliance will work as part of the Crypto Impact and Sustainability Accelerator (CISA), a grant-funded initiative launched by the World Economic Forum at the beginning of this year to advance knowledge of the environmental, social, and governance (ESG) impacts of crypto technologies. .

“We need open standards, we need open protocols, we need excellent debate, exchange, and that’s what the scientific method is about, and that’s what we’re here to pursue,” Knauer said, adding, “Then we need bigger institutions like the World Economic Forum, Like Royal Bank, like commercial banks, like other investors to step in and help these solutions scale up.”

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