Could Blockchain Accelerate The Green Transformation Of The Chinese Economy?

Siddhartha Dasgupta

September 5, 2020

The Yangtze is not just any river, its Asia’s longest river and the third longest waterway in the world, spanning a length of over 6000 kilometers.

Over a period, the Yangtze basin has evolved to become the most important area for economic and human activity in China. It is home to 40% of the population and accounts for almost 50% of China’s GDP, which is staggering to say the least.

If the Yangtze basin were a country by itself, it would be the 3rd largest economy in the world. The basin has always been home to one of the highest levels of biodiversity in the world, however the pollution occurring from farming, fishing and industrialization has seriously hampered the biodiversity in the Yangtze basin.

If one looks at the data which underscores the pollution of the Yangtze, its startling, as per a Hong Kong based non-profit, China Water Risk, in 2016 the Yangtze river accounted for 43% of China’s wastewater discharge and 60% of heavy metal discharge. Add to that, the traditionally high levels of air pollution in cities like Beijing.

Environment concerns are very real in China. In recent times, the government has been aggressively focusing on greening initiatives and results are already showing on the air pollution front. Beijing’s Air Quality Index has dropped considerably in recent times.

National Green Development Fund

China’s focus on making the country a better place to live can be seen in  the government’s commitment. They have introduced a National Green Development Fund to focus primarily on strategic projects such as the green development of the Yangtze basin. In its first phase of fundraising, the fund has already raised 88 billion yuan ($12.59 billion).

Having shown the intent to transform the Chinese economy through greening, it would be worthwhile to look at technology solutions such as Blockchain to implement some initiatives that impact the environment in the long run.

 Environmental Protection

Something simple and basic such as waste classification becomes a real problem in a wide geographical area with a huge population. Waste sorting is generally done at an individual level but often, governments need to encourage citizens to do so.

This is where Blockchain might come into play where a digital token is issued by the government to incentivize people who sort their waste. These tokens can be used by citizens for making cross border payments and carrying our P2P transactions. Such incentivization leads to greater public confidence and enthusiasm for collective environment protection.

Monitoring Environment 

Classifying garbage is only part of the solution, we need to know where the wastes are being disposed, what’s the rate of incremental plantation or what steps are companies taking to reduce energy consumption from fossil fuels.

A key component of environment protection is data monitoring, accurate ecological census data is an important element. The environment tracking process can be monitored transparently if data is uploaded to a blockchain.

People can monitor public welfare programs and understand how certain environment protection measures have been implemented. No organization can fudge data and make false reports as the blockchain system wouldn’t inherently allow it. The system will monitor companies with heavy pollution records, and if the need be, they can be asked to stop production.

Blockchain & Renewable Energy

Some may argue that Blockchain isn’t a fully mature technology yet, in the context of its applications beyond financial services. There’s tremendous potential in the energy sector, where households can go from Consumers to Prosumers with the help of Blockchain.

At the front end, there can be a transaction platform which gives the consumer an opportunity to become producers/sellers of energy with the implementation of a energy transaction Blockchain system, with high autonomy.

Utilities and grids can balance supply and demand of energy efficiently. Moreover, this system can enable grids to integrate renewables into energy supply in a cost-effective manner.

LO3 Energy, an energy company in the United States has successfully developed a Blockchain based microgrid(Pando) where neighbours can buy and sell energy from each other by leveraging a marketplace model:

The Road Ahead for China 

Given the scale of pollution in China, the use of  Blockchain based solutions is an imperative given the efficiency that comes with deployment. As the country looks to start projects under the aegis of the ‘Green Transformation Fund’, Blockchain can prove to be a key enabler in ensuring a healthy environment in China.

Source: CyberVein, Reuters, World Economic Forum, LO3 Energy

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About the author
Siddhartha Dasgupta

Contributing Author

Sid has been a content solutions evangelist and a digital marketer for 10+ years. Having written for brands such as IBM, Infosys and other technology corporations and startups, he is always at the cutting edge of researching & writing about emerging technologies.

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