New Report published

01.06.2021 - Climate Ledger Initiative

This report provides an overview of the most relevant governance challenges facing blockchain-based climate actions on the international, national and blockchain levels. While blockchain works without a central authority, this does not translate to an absence of governance. Governance is defined as an allocation of power, risks and responsibilities and should thus be considered a core component of blockchain-based climate actions. Different governance challenges have to be carefully addressed in order to build trust and create confidence in the technology, including ensuring compliance with legal regulations as well as actively determining rules and designing systems to automatically enforce them.
The report not only discusses the most relevant governance challenges on the international, national and blockchain levels, but also provides insights into how they have been addressed by the following three use cases in practice: the World Bank's Climate Warehouse, which provides a transparent and blockchain-based, shared data layer supplied by participating registry operators about climate projects and their issuances, transfer and use, KfW's TruBudget platform,  which records workflow steps for donors, fund managers and project implementers using a "logbook approach" in a permissioned blockchain (Multichain), and Etherisc weather insurance in Kenya, which provides an affordable, blockchain-based climate risk insurance for smallholder farmers.

In conclusion, it is of critical importance to address governance issues on all three levels from the conceptualisation stages of a project. This ensures that perspectives from the blockchain, climate change and legal community are convened, while also guaranteeing projects will be built in a manner that garners trust and creates confidence in using blockchain for climate action. This report supports the study of further use cases and calls for exchange and mutual learning of topics related to governance.