The World Economic Forum (WEF) has set up the Crypto Sustainability Coalition as it seeks to explore the potential of Web3 technologies in addressing climate challenges. According to its 21st September announcement, the WEF will “investigate how web3 and blockchain tools can be leveraged to achieve positive climate action.”
Web3 has become a recurring narrative in this technological age as it captures technologies that provide an improved Internet. Technologies such as blockchain, cryptocurrency, NFTs, and Metaverse have led the narrative.
The new coalition comprising 30 member organizations will research these technologies’ impacts on the environment and social agendas. The WEF also mentioned that the coalition’s launch is timely, particularly in the face of arguments around carbon pollution from cryptocurrency mining and efforts toward decarbonization.
The need to ensure the industry is part of the positive climate action has inspired efforts such as Ethereum’s recent transition to the Proof-of-Stake (PoS) consensus mechanism.
Per the WEF, another area that needs deliberate consideration is the “regulatory clarity that promotes web3 innovation, protects consumers, and improves financial inclusion.”
Speaking on the coalition’s launch, Brynly Llyr, Head of Blockchain and Digital Assets, World Economic Forum, said;
“I am excited about the work we are expecting from the Crypto Sustainability Coalition. An important and unique aspect of web3 is that it uses technology to support and reward direct community engagement and action. This means we can coordinate the work of many individuals directly with one another, enabling collective action without centralized control – a powerful accelerator for grassroots action.”
Coalition to Address Three Salient Issues
The Crypto Sustainability Coalition is expected to set up working groups to address three important issues.
The working group will examine crypto’s energy consumption and materials to capture a concise picture of its impact on climate and nature.
Web3’s Potential for Climate Action
A separate working group will assess ways for web3 technologies to address challenges relating to carbon pollution to meet the Paris Agreement’s milestones. Citing an example, the WEF mentioned that “the decentralized nature of crypto-mining and its ability to operate at off-peak times may provide a new business model for utilities and investors looking to develop renewable energy microgrids.”
“On-chain” Carbon Credits
Furthermore, the WEF has indicated that blockchain-based carbon credits could tackle existing challenges in the global carbon markets, such as the lack of transparency around carbon offsets for either providers or buyers; the failure of markets to remove carbon emissions at the scale and pace required; and the inability of millions of the world’s smallholder farmers, forest stewards and Indigenous communities to participate in or benefit from carbon credit markets.
The Coalition’s 30 partners cuts across several leading blockchain firms such as Accenture, Avalanche, Avatree, CC Token, Circle, Climate Collective, Crypto Council for Innovation, Emerge, Energy Web Foundation, eToro, EY, Flowcarbon, Heifer International, KlimaDAO, Lukka, NEAR Foundation, Nori, PlanetWatch, Plastiks. Others include Rainforest Partnership, Recykal, ReSeed, Ripple, Solana, Stellar Development Foundation, STEWARD, Sustainable Bitcoin Standard, The Global Brain, Toucan Protocol, University of Lisbon, and Zero Labs.
Meanwhile, the Coalition will center its wider aim around fostering a broad education campaign on web3’s potential and capacity to better inform governments on how they regulate these technologies and incentivize investment and research into their development. The regulation of Web3 technologies has become a front-burner issue, considering how they are reshaping global economies.