Executive summary
Climate change adaptation and mitigation (CCAM) entails many challenges. Addressing these challenges requires transformational changes for which innovative solutions should be investigated. Among innovative digital technologies, the blockchain technology (BCT) has been considered to offer a unique opportunity to bring greater efficiency, transparency and traceability to the exchange of value and information in the agriculture sectors. To provide more background knowledge and insights into the promise and limitations of blockchain, this paper outlines the possible applications of BCT in agriculture and how it may be used in the context of climate change.
The objective of this study is to provide insights into potentialities, steps and best practices in applying BCT to use cases in agriculture in the context of climate change, to explore the opportunities and challenges in applying the blockchain technology in agricultural sectors with the aims of reducing greenhouse gas emission, increasing carbon sequestration, as well as supporting farmers’ adaptation to climate change. Furthermore, this study also aims to shed light on policy options and propose policy guidance adapted to developing countries on blockchain applications.
Following the objective of the study, the following research questions were addressed:
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What are the key features of blockchain that will help in tracking GHG emissions and offsets?
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What are the main areas of application of blockchain in agriculture in the developing and developed worlds? What features of blockchain are relevant to climate change adaptation and mitigation in agriculture in developing and developed worlds?
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What are the key opportunities and challenges in applying blockchain in agriculture?
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What are the policy options that are relevant to the application of blockchain in agriculture?
The main methodology comprised of literature research and case studies based on information available on the internet. Nine use cases from different agriculture sectors in developing and developed countries were studied in detail and documented using a common template (see Appendix 2). Based on the findings from the literature and analysis of the use cases, this background paper describes the current state of play and outlook for applying blockchain to CCAM in agriculture.
Main features of blockchain application: distributed ledger, governance and ecosystem BCT is not a single technology, nor is blockchain a single entity. At its core, blockchain is a distributed ledger that is consensually shared, replicated and synchronized among different nodes. Blockchain is also a governance technology for which rules and agreements need to be set and enforced with regard to the distributed ledger and the utilities derived from it. Blockchain application necessarily involves an ecosystem of different actors with different roles.
The implementation of BCT entails many technological choices and governance arrangements. This study provides an overview of the architectural components (see Figure 2) and technological choices to be made regarding the basic blockchain framework (see Table 10 and Table 11), the type of blockchains (see Table 1) and the roles of actors involved in the blockchain ecosystem (see Figure 3, Figure 4 and Table 12).