To combat climate change, new dynamics in the energy sector are compelling providers to shift to sustainable and clean energy.
While there are numerous challenges associated with the clean energy transition, a report claims that blockchain has the potential to assist the industry in meeting its climate action goals.
Tecnalia Research and Chainlink Labs conducted the study, titled “Managing Climate Change in the Energy Industry with Blockchains and Oracles.” It describes how blockchain features such as tokenization, hybrid smart contracts, and blockchain oracles can be used to manage climate change in the energy sector.
According to Jose Luis Elejalde, an energy executive at Tecnalia, the energy industry can use blockchain during the infrastructure transformation period to “digitize and assign value to clean energy investments and design fully automated incentive systems for participating in sustainable practices.”
According to the study, blockchains can be used as a database in the settlement layer, smart contracts in the application layer, and oracles in a specialized computation layer to create connectivity.
The report highlighted various blockchain use cases, such as tokenizing carbon credits and smart grid management, and explained how they can help with the clean energy transition.
The study emphasized use cases such as verifiable eco-data reporting via a hybrid smart contract system. According to the study, projects such as Hyphen use oracles to provide greenhouse gas data within the blockchain and create proof that corporations are meeting their climate commitments.
Aside from that, the report mentioned Lemonade’s climate-focused blockchain insurance solution, which deals with the effects of climate change, such as weather-related disasters, by ensuring farmers in Africa.
According to Chainlink Labs executive William Herkelrath, “a data-driven backend infrastructure is critical to propelling the cross-sector collaboration required to address the climate crisis.” Herkelrath also stated that oracles can provide the energy sector with the necessary tools to combat climate change.
Jane Thomason mentioned in an article that blockchain can help manage smart grids in decentralized energy markets and allow peer-to-peer energy trades. It may allow people to “buy, sell, or exchange excess renewable electricity” with one another.
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