Environmental finance and other blockchain “game-changers”



A new report from the World Economic Forum touts the decentralized electronic ledger’s potential as a game changer for sustainable development finance, among about a half-dozen or so other applications for environmental challenges.

The report hypes blockchain’s potential to “unlock and monetize value that is currently embedded (but unrealized) in environmental systems.” Yet only about 3%, or about $100 million, of the $3.3 billion raised through initial coin offerings in the first quarter of 2018 went to energy and utility projects.

ImpactAlpha reported in April that the deals lag the hype in “blockchain for good” investments.

Deals lag hype in ‘Blockchain for Good’ investments

  • Use cases. The WEF’s analysis of environmental challenges suggests blockchain use cases include: more efficient and decentralized utility systems; peer-to-peer trading of resources or permits; “see-through” supply chains; new financing models for environmental outcomes; and the realization of social and environmental value and natural capital.
  • Planet finance. UK-based Provenance, backed by Humanity United, is piloting a blockchain tuna-tracing system from Indonesia sources to retail customers in the UK. The Sun Exchange’s blockchain-enabled marketplace facilitates low-cost and efficient cross-border funding for solar projects ss to solar assets in sub-Saharan Africa Malta-based Poseidon wants to tokenize carbon credits. The Natural Asset Exchange has a plan to connect producers of waste to energy, solar, and wind-farm projects with consumers of such “natural capital” assets.
  • Blended finance. The mixing of concessional and commercial capital for sustainable development projects is a blockchain natural. “A platform could efficiently facilitate the complexity of such transactions where different types of funding, traditional and nontraditional assets, and multiple stakeholders with multiple requirements are involved.”

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