Summary:
Blockchain technology and climate finance are surely two very interesting concepts, yet, most of the public does not really know how their interplay looks like in reality. Low Carbon City invited four experts to answer this and many more questions.
As defined by the United Nations Framework Convention on Climate Change (UNFCCC), climate finance comprises all finance aimed at climate change related activities. Cecilia Repinski correctly states that the successful allocation of finance and investment to sustainable, impactful projects currently faces a bottleneck. A lot of investors, and today this may also be the average citizen, are looking for high-impact, well-documented projects. The problem? Trust. Whilst high amounts of financing are available, many high-impact projects on local level have difficulties earning the trust of the investors, therefore only small parts of available financing reach the local level. Traditional investments also come with huge transaction costs, according to Juan David Durán. Blockchain, he says, will be able to lower these transaction costs significantly, so that even small, local projects will be economically viable. Sven Braden added on this stating that blockchain technology, making middlemen redundant, will help substantially in overcoming trust-issues as well as lowering said transaction costs.
When discussing different blockchain-based mechanisms of green finance, critics often question to which extent blockchain technology can actually be regarded as “green”, as one of the most common and widespread critics of the blockchain is its high energy consumption. On this point, our experts all agree to disagree and warn not to confuse cryptocurrency-related problems with the blockchain technology as such. Katherine Foster remarks that firstly, the blockchain in climate finance applications by far does not use as much as energy as if deployed for cryptocurrencies, and secondly, that the energy requirements of the blockchain can also be fulfilled with green energy. Apparently, despite its potential, blockchain technology suffers a lot from public trust issues originating from failed cryptocurrencies.
Speakers:
Katherine Foster is the co-founder and deputy general director of the Blockchain Climate Institute and executive director of Blockchain Labs for Open Collaboration. She has developed different sustainable development and climate initiatives, including solar energy, emissions, supply chains, etc., World Bank climate market pilots, IKEA Solar Ville Labs and Maritime Blockchain Labs (fuel traceability).
Sven Braden is program director of the Climate Ledger Initiative, co-founder of the Wood Tracking Protocol, and director of the Sustainable Development Initiative (SDI) program at the Gold Standard. He was previously the deputy director of the LIFE Climate Foundation in Liechtenstein.
Cecilia Repinski is the Executive Director of Stockholm Green Digital Finance, a not-for-profit tasked to accelerate green finance and investments through fintech applications founded in May 2017. Stockholm Green Digital Finance raises awareness about the potential synergies between green finance and fintech and co-creates new solutions together with the financial services sector. Under the lead of Cecilia, and in collaboration with capital market actors, Stockholm Green Digital Finance has produced the Green Assets Wallet, a blockchain based platform for accelerating green finance. Prior to funding Stockholm Green Digital Finance, Cecilia headed the Sustainable Finance Platform at the Stockholm School of Economics overseeing 30+ research projects on green finance and investments and initiating the School’s Executive Education in Green Finance. She has advised the Stockholm Resilience Center around how the financial sector is implicated by planetary boundaries. Cecilia serves on the boards of SweSIF (Swedish Sustainable Investment Forum) and FinDec (the Swedish Fintech Hub), she is also head of Innovation at the Stockholm Sustainable Finance Centre.
Juan David Durán is an electronic engineer from Universidad Pontificia Bolivariana in Colombia and FH-Münster in Germany, MS.Sc. Electrical Power Engineering from the RWTH Aachen in Germany. Juan worked in Germany in the software development of the control systems for the electric traction and electric system in Lokomotives. In 2013, he moved to Colombia to work with XM, subsidiary of ISA, where he was on the team responsible for the simulation systems for the real time control of the Power System in Colombia and was part of different research projects of XM together with different universities. Since 2017 he has been working in the innovation team, helping the company to develop new ideas like Ecoregistry, a registration system for the voluntary carbon market in Colombia.
Juan Manuel España is part of the EnergEIA group as a researcher. At the EIA University in Medellin-Colombia he currently leads the Transactive Energy Initiative Colombia, a program designed for piloting and developing an evidence base for a P2P clean energy to generate technical and policy recommendations for urban and rural new energy business models in Colombia. Prior to joining EIA University, Juan made part of SOLshare, the “Uber of the off-grid world”, leading some of the most remarkable business and technology development initiatives such as the GSMA-M4D grant and the Elsevier Renewable Transformation Challenge. Juan also lead several projects in the field of energy access and climate micro-financing in countries such as Bangladesh, Honduras and Colombia.
