5 Ways Blockchain Technology Can Help Stop Deforestation

Did you know that the world has lost roughly 420 million hectares of forest since 1990, which is approximately the size of the European Union or California? Deforestation is a major global issue, and the loss of forests is happening at an alarming rate. Agriculture is the main driver for deforestation, accounting for roughly 70%-80% of deforestation in tropical regions.

Blockchain could emerge as an effective solution for protecting forests. Those outside the blockchain spice might think this technology serves as a tool primarily for financial transactions or cryptocurrency speculation. Indeed, anyone is welcome to join the CEX.IO platform for spot trading and experimenting with digital assets trading strategies.

However, blockchain goes beyond being a mere technology for financial activities. Its decentralized and immutable nature has already contributed to solving many real-world challenges in supply chain management, healthcare and automotive industries. Its functionalities can be harnessed to address complex issues, such as deforestation. Here’s how:

Blockchain Technology Can Help Stop Deforestation

In this article, we’ll cover the following topics:

  1. Supply Chain Transparency
  2. Tokenization of Carbon Credits
  3. Decentralized Land Registry
  4. Crowdfunding Conversation Projects
  5. Incentivizing Reforestation

Supply Chain Transparency

As mentioned earlier, blockchain technology can support preventing deforestation in more than one way. It could be used in the creation of transparent and immutable records of every transaction and every movement of forest products. This way, it could help trace activities from harvesting to processing to distribution.

Such a recording method would help stakeholders easily trace the origin of wood products, ensuring they come from legal and sustainable sources. A similar approach was introduced in the supply chain industry, with several blockchain projects like VeChain already achieving widespread adoption in overcoming challenges like data verification and industry coordination.

Also, blockchain could play a key role in preventing illegal logging. For instance, this technology could integrate with Internet of Things (IoT) devices such as GPS trackers and sensors. This could provide real-time data on the movement and condition of forest products, allowing stakeholders to monitor the entire supply chain in real time and detect potential irregularities.

Tokenization of Carbon Credits

Tokenization of Carbon Credits

Another way blockchain technology can contribute to preventing forest denudation could be through the tokenization of carbon credits.

In other words, blockchain could be used to incentivize people who own forests to take care of them.

To make this work, one would have to measure the carbon sequestration capacity of forests, quantify it, and represent it as a digital token.

This way, by purchasing these tokens, contributors could play a major role in incentivizing forest owners and caretakers alike to keep forests healthy instead of cutting them down.

The tokenization of carbon credits could promote global participation. Contributors from all corners of the world, including corporations, stakeholders, individuals, investors, and governments, could help harness financial resources through blockchain technology and help combat forest clearance. 

Decentralized Land Registry

Lack of stringent logging regulations can lead to unsustainable practices like clear-cutting, exceeding harvesting quotas, and neglecting reforestation efforts. In regions where land rights are unclear or poorly enforced, blockchain-based land registries can provide a secure and immutable record of land ownership.

Brazil is an excellent example of how weakening environmental protection policies can result in devastating consequences. Namely, the Amazon deforestation surged in 2022, when the annual rate of deforestation was estimated to be 11,568 km². Clear land tenure rights can help prevent illegal land grabs and encroachment into forests, thus reducing deforestation.

Enhancing Data Management for Monitoring and Enforcement

Immutability is one of the key features of blockchain. This means that once recorded, data can not be altered or tampered with, at least not without consensus from the network participants. Such a practice could ensure the integrity and reliability of the data collected through various monitoring technologies, such as satellite imagery and drones.

Storing forest monitoring data could have many benefits. One such is making it accessible to relevant stakeholders, including:

  • Governments
  • Non-governmental organizations (NGOs)
  • Local communities
  • General public

This transparency could promote accountability and enable greater collaboration between stakeholders in monitoring and enforcing forest protection laws.

Verification of Sustainable Forestry Practices

Smart contracts built on blockchain could have a revolutionizing role in creating and verifying sustainable forestry practices. They could provide transparent, tamper-proof, and automated mechanisms for ensuring compliance with predefined sustainability criteria.

For example, forest management companies and relevant stakeholders such as governments and environmental organizations can establish specific standards that define sustainable forestry practices. These conditions can include requirements such as:

  • Replanting trees after logging
  • Protecting wildlife habitat
  • Minimizing soil erosion
  • Adhering to legal regulations

It can even go further and include the data management techniques mentioned in the section above and incorporate them into smart contacts. As a result, smart contracts could automatically verify whether the sustainability criteria have been met based on all collected data.

Ultimately, this could enhance accountability, promote transparency, and incentivize sustainable management of forest resources, thus preventing the depletion of forests in the long run.

Author - Olivia Poglianich
Olivia Poglianich          

Content Strategist

Olivia Poglianich is a nomadic brand strategist and copywriter in the wooden crafts and 3D product design space who has worked with brands such as Visa, Disney and Grey Goose. Her writing has taken her all over the world, from a Serbian music festival to a Malaysian art and culture event. Olivia is a graduate of Cornell University and is often writing or reading about travel, hospitality, the start-up ecosystem or career coaching. Her latest interests are at the intersection of web3 and communal living, both on and offline.


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