The use of distributed ledger technology in climate governance

This research project examines the potential for distributed ledger technology (e.g., blockchain) to create a scientific knowledge base and innovative tools that support multi-level climate governance and policy. Cities, states and regions, business, investors and civil society (non-state actors) are increasingly recognized for their ability to catalyze, implement, and innovate climate actions. In some cases, these efforts go beyond or are more ambitious than national governments' commitments. Quantitatively assessing and tracking these efforts, however, is fraught with difficulties, due to heterogeneous data sources and gaps in data coverage. These data challenges inhibit the capacity of non-state actors and national governments to acquire and integrate knowledge -- about effective strategies or potential opportunities to coordinate or complement efforts -- into their policy processes. Blockchains are decentralized and immutable ledgers that have the potential to address accounting and knowledge gaps, including double-counting problems (e.g., most prominently in digital currencies). To date, however, there is a lack of a clear understanding and concrete frameworks for how this technology can be applied to the challenge of establishing accountability and incentives for climate actors. A blockchain or distributed ledger approach could fill a critical gap in the understanding of how non-state climate actions are implemented, what they achieve, and how to build a sustainable system that lowers measurement and reporting burdens to be more inclusive globally.

This project will develop a trusted and decentralized data management and accounting scheme for non-state action pledges as a way of enhancing the scientific basis for non-state and subnational climate action and policy. Using an interdisciplinary approach that will leverage insights from academic researchers, industry partners, non-state and subnational climate action practitioners, and policymakers, it will innovate a novel framework and architecture for Blockchain Climate Action Tracking (B-CAT). This framework, developed in both theory and tested in proof-of-concept prototypes, will be used to define if and where blockchain and complementary technologies (e.g., internet-of-things) can improve upon existing efforts tracking climate policy. The project will answer four main questions: 1) Who are the primary actors, verifiers and users that will participate in the B-CAT ecosystem and what requirements might they have for engagement? 2) How can distributed ledger technology (e.g., blockchain) be applied to automate incentive schemes and protocols that can address identified data and knowledge gaps in non-state climate action? 3) What are the potential impacts and challenges in the science of tracking climate action with this new blockchain framework? 4) Where can blockchain tools provide significant value in climate use-cases, and what issues and architectural considerations would need to be addressed for these to be applied effectively and at scale? Identifying explicit limitations and positive implications of the technology will also be an important output of this work.

This award reflects NSF's statutory mission and has been deemed worthy of support through evaluation using the Foundation's intellectual merit and broader impacts review criteria.