Blockchain for climate finance

Updated: Mar 13

It’s pretty easy for everybody to say that our current financial system is not sustainable: climate change is probably the world’s greatest market failure and ignoring it would profoundly threaten economic growth. Put economic costs aside, the uneven distribution of climate change impact signifies social injustice and ethical consequences: poor countries and their population will be at the highest risk, even though their contribution to the causes of climate change is minimal.

Over the past decade, public and private climate finance have risen in power, as both sectors increasingly recognize that climate actions are in their economic interest, but several factors can explain most of the difficulties encountered at a national and international level:

  • Need for great coordination and intermediation to facilitate investment flows and align the interests of stakeholders, regulators, communities and investors.

  • The “mutual trust”, needed for negotiations is actually compromised by problems of clarity and transparency, mainly regarding the task of tracking, monitoring, reporting and verifying climate finance funds. Much of this is due to the lack of solid data and transparency, owing to lack of regulation and an adequate system for defining, categorizing, tracking, and evaluating climate finance to guarantee the data reported are true and accurate.

  • Many of the smallest and most risky countries now claim that they do not have the means to access the international climate funds directly and such centralized transaction mechanisms force them to go through financial intermediaries.

As we know Blockchain can address the ab