Blockchain Revolution

ENGAGING CITIZENS TO SOLVE BIG PROBLEMS
Most people who believe in science understand that human carbon emissions are
warming the atmosphere. This climate change is dangerous to ours and many other
life-forms on the planet. Governments, companies, and NGOs working on reducing
carbon tend to agree that so-called carbon trading is an environmentally effective and
economically sensible approach to lowering emissions.
One policy is called “cap and trade.” A regulatory body sets a “cap” or limit on
carbon emissions and lowers it over time to reduce the amount of pollutants released
into the atmosphere. The “trade” represents a market for carbon allowances, helping
companies and other organizations to comply with their allocated limit. According to
the Environmental Defense Fund, “The less they emit, the less they pay, so it is in
their economic incentive to pollute less.”
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Today the European Union’s most developed nations have cap-and-trade
exchanges. California, Ontario, and Quebec agreed on the Montreal Protocol,
advocating for a global exchange. Officials at nation, state, city, and enterprise levels
could allocate cap-and-trade credits to balance set allowances. At the same time,
blockchain-based reputation systems could rate the kilowatt-hours of energy providers
to the grid according to standards of sustainable greenhouse gas reduction. For
example, the system could tag energy sourced from coal with higher cap debits and
renewables like solar as credits. Blockchain can help automate the cap-and-trade
system on an industrial scale. Efficient pricing algorithms compute credits and debits
in real time, and green organizations capture and track their carbon credits on the
ledger and roll them into an exchange.

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What if we created a cap-and-trade system for people? Surely we need more than
our institutions to change their behavior! Personal carbon trading would work through
the Internet of Things. Sensors, detectors, and instrumentation would measure your
water heater, dishwasher, and household thermostat in real time and inform you of
your carbon credits balance. At the same time, you could earn credits by acting in
practical, sustainable ways. If you added an array of solar panels to your roof, you
would earn credits by returning excess energy to the grid.
Could this create new sources of annual income for people? After all, the poor
and homeless are low carbon users. By biking to work, you could save credits that
your hot water heater could spend: “Hey, dishwasher—my personal cap-and-trade
watch indicates we can afford to run on full wash and thirty-minute dry cycle.” Water
sensors in the washer could manage water usage based on an acceptable level of
particulate density, dampness sensors in the dryer could turn the dryer off when the
clothes have reached an acceptable level of dryness, and the building’s HVAC system
could harness the excess heat.