Sanneke Kloppenburg on Climate & Crypto

Sanneke Kloppenburg has recently co-authored an extremely informative article that surveys what she and her two co-authors call "climate cryptogovernance." They have pored over the documents from various international organizations engaged in climate governance and have found plenty of what I could only describe as techno-solutionist claims with regards to the immense transformative potential of the blockchain.

Yet, reading that article, I got the impression that it resembles the sort of "non-transformative solutions" – a phrase I borrow from this excellent paper – that circulate in international policy discourse. Unsurprisingly, it turns out that much of this cryptogovernance discourse is just another way of legitimating existing approaches, which rely on a combination of technocracy and a belief that market-based solutions would work. As the article makes clear, blockchain technologies are also reinforcing many of the existing trends in environmental governance, including – a new word for me – "measurementality."

~ Evgeny Morozov

Keywords: Blockchain, measurementality, climate cryptogovernance, crypto mining, non-blockchain politics

There’s a widespread belief, including among many international organizations, that blockchain technologies could help fix climate governance. One ardent proponent of this idea even took to the pages of Nature, in 2017, to argue that that “the environment needs cryptogovernance.” You and your co-authors are not convinced. Before dissecting the reasons for your skepticism, let’s make the best case for the proponents of climate cryptogovernance. What exactly do they expect?

According to these advocates, blockchain can help fix human failings in environmental policy making and implementation. The assumption is that environmental policy fails due to a lack of trust between different parties. With blockchain, trust, law, and enforcement could be outsourced to computer code. This means that rules and laws would be written in the computer code and automatically executed. In that way, all parties involved would automatically comply with the rules, and no third party or central authority would be necessary.

To give us a sense of what this cryptogovernance imaginary means in practice, could you give us some examples of institutions – and specific projects – that are acting out of this faith in the political possibilities of blockchain in this space?

In the field of climate governance, we see this imaginary coming back in different ways. The most widespread set of expectations has to do with the blockchain bolstering climate policy through the enhanced monitoring and reporting of greenhouse gas emissions. Carbon stocktaking is enshrined into the Paris Agreement, through the inclusion of articles 4 and 14 which require parties to prepare, communicate and maintain a nationally determined contribution (NDC) to pursue domestic measures to reduce carbon emissions. However, there have been widespread concerns that, without transparent and standardised methodology, these commitments would not be achieved. This is where commentators have suggested blockchain could play a role, but so far there have not been any attempts to put this in practice (as far as we know).

Any other examples?

It has also been suggested that blockchains could strengthen climate policy in the context of voluntary carbon offsetting. Here the idea is that blockchain could enhance the accessibility and auditability of voluntary carbon markets. For example, carbon offsetting platforms such as Nori and CarbonX have used blockchain technology to develop carbon removal marketplace​s. Buyers can pay for verified carbon removal activities through transactions which are registered on the blockchain. As a result, blockchain-based solutions for carbon offset trading offer the possibility to go beyond stocktaking and create a consumer market-driven price on removing carbon dioxide from the atmosphere. ​

Markets and financialization more broadly do seem to continue to play an important role in forming the climate imaginary, with or without blockchains...

Yes, there are people arguing that blockchains could help achieve climate objectives by facilitating the trading of climate-oriented tokens and cryptocurrencies. Climate-oriented tokens and cryptocurrencies are disseminated with a climate-related philosophy, but unlike the blockchain-based solutions which focus on existing carbon markets, token supply and price are not directly coupled to carbon metrics. For example, the SolarCoin cryptocurrency incentivises the production of solar energy by rewarding solar producers with an energy-referenced currency. Or the Energycoin, which seeks to reward climate-friendly choices through digital tokens. These digital tokens represent a consumer’s avoided CO2 emissions and would have an exchange value in a local community.

In your empirical work, you have closedly studied how various international actors in climate governance talk about the blockchain and its promises. What is one big observation that stood out?

We have looked at the United Nations Framework Convention on Climate Change (UNFCCC) Secretariat, the World Bank, and World Economic Forum, among others. The general storyline that we identified in the writings and talk about blockchain for climate governance is that blockchain would enable more ambitious climate action. But this more ambitious climate action was not about a fundamentally different way of doing climate governance. Rather, it meant making existing forms of climate governance more efficiently.

What kinds of themes tend to dominate in this discourse?

In our analysis, we identified four key components of this storyline: blockchain would enhance the reliability, transparency, accountability and democratization of climate governance arrangements.

Let's tackle each of them then, starting with reliability.

The discourse around reliability builds on this basic assumption that blockchain can fix human failings and fraud. The claim is that blockchain can replace the need for human trust by ensuring reliability and reducing uncertainty through the use of computer code. Think of measuring, reporting and verification (MRV) procedures for greenhouse emissions. These procedures in climate governance are often administratively cumbersome. The blockchain is imagined not just to streamline those procedures but also to make them more reliable because its inherent features prevent humans from tampering with the data.

What about transparency claims?

Here the idea is that the blockchain, via calculation and measurement, can make visible not only transactions happening in carbon markets, but also the climate actions of citizens, businesses, countries. Current carbon markets are seen as lacking transparency, and with the help of the blockchain these markets would become more transparent and thereby integrate more stakeholders. Also, blockchain would make visible the countries' progress in cutting emissions, opening up this information to other parties, such as NGOs and citizens.

Are promises about accountability distinct from those related to transparency then?

Somewhat. The third element, accountability, builds on the previous two. Here the argument is that by stimulating the generation of reliable and transparent information, the blockchain enhances the prospect of holding climate actors to account. For example, if the blockchain makes the countries' emission reductions visible, then the actions of nation states and other powerful actors can be held up to scrutiny. This would enhance the accountability of existing climate governance arrangements.

Well, it's a lot of promises made in the name of the blockchain. What, then, about the last, fourth component?

It advances the claim that blockchains, thanks to their decentralized and disintermediated nature, enhance the democratic quality of climate governance arrangements. Blockchain would do away with powerful intermediaries and thereby make collaboration in climate governance easier. It would also empower individual citizens to contribute to climate governance, as the blockchain makes the climate impact of their individual actions visible, helping them to address this. The voluntary offset markets and climate-oriented tokens that we mentioned earlier would play a large role in this.

In 2013, I published a book on technological solutionism. Today, as I hear claims made in the name of blockchains “solving” this or that problem, including climate, I worry that the analytical distinctions between various "solutions" get erased. To techno-solutionists, all methods seem equally well-suited to achieving their task, so they opt for the most efficient or innovative ones. This tends to ignore the hidden politics of problem-solving, blinding them to the fact that solutions differ in terms of their political costs: some shift more responsibility to citizens, some produce a veneer of quantitative objectivity while concealing the sources of the problem. Do you see a similar dynamic in the field of climate governance with regards to crypto?

Yes, indeed. In the early expectations around blockchain that we examined, influential climate policy actors saw blockchain as a neutral tool to improve existing strategies for tackling the climate crisis. As we explained earlier, these existing strategies include a reliance on voluntary transparency and on carbon markets. So, blockchain was generally portrayed as a neutral or objective technology that would automatically improve the workings of existing governance arrangements. It was not seen as a political strategy in itself, or as part of such a strategy.

However, when blockchain is designed to facilitate carbon markets or used to further the transparency of existing MRV procedures, blockchain is not neutral, but political. Relying on markets is just one strategy for trying to solve the environmental crisis, and an approach that comes with its own fundamental problems. But in the texts and talks that we studied, the scenario that blockchain could also add to the problems related to this strategy, or that it could divert attention away from the sources of the climate crisis – think of overconsumption, pollution, and natural resource extraction – was not discussed.

What, in your view, are the most likely consequences of mainstreaming the blockchain technology as an instrument of fighting climate change if no further structural changes are forthcoming? Are we likely to end up with a new form of blockchain-mediated green consumerism, with consumers in the Global North now being assured that the coffee they are buying has been deemed “fair” and “sustainable” via the blockchain and not just through a signed certification? Could it simply extend the life of what seems like a failed experiment – the trading of carbon emissions offsets?

The risk is, indeed, that the blockchain will mostly be used as a "simple solution" to the climate crisis. This would mean keeping the focus mainly on streamlining existing governance arrangements, on blockchain-mediated green consumerism in transparent supply chains and offsetting emissions with blockchain-based credits. The problem with such an approach is that it frames individuals as rational actors with a significant degree of ability to enact change. But in the end the power of consumers is only limited and corporations, financial institutions, state policies and multilateral agencies have a much larger influence on climate governance and its impacts.

I see two possible paths emerging from your critique. One points towards non-blockchain and non-technological politics, e.g. you write of approaches that build on “mandatory state-driven regulation that targets the structural causes of climate change.” Another one points to recuperating the scant – for now – emancipatory potential of properly technological politics, which might even include the blockchain. Could you say a bit more about the second option? You hint at that when discussing the possibility of using tokens as an alternative measurement system for valuing things...

Influential climate actors now imagine the blockchain mainly as a technology that improves the efficiency of existing arrangements. But that is not the only way we can use it for improving climate governance. Through the blockchain, we can represent and assign value to diverse entities, including nature, things, or behaviors.

In that sense, a blockchain project, or maybe even just its imagined potentialities, can invite us to deliberate on how to value things, what behaviors to incentivize, and if this could or should be otherwise. That basic idea – to use the blockchain to think about whether things could or should be otherwise – is its emancipatory potential.

However, it requires a different way of talking and  thinking about the blockchain: not seeing it as a techno-fix – as something that will automatically optimize processes. The emancipatory potential of the blockchain thus ultimately depends on the fundamental questions we, as humans, ask about the problem blockchain is imagined to address.

There is, of course, a third, even more radical possibility: the boycott of anything related to blockchains and cryptocurrencies, not least because they have a huge environmental impact. Some scholars, like Pete Howson, for example, have called for global bans (or least limitations) on crypto-mining due to their disastrous impact on emissions (which we probably still underestimate). So, there’s always the option of moving from “blowing up a pipeline” in the colorful formulation of Andreas Malm to “blowing up a blockchain.” What are you thoughts on this more radical option?

Blockchain, like many other digital technologies, does have a huge environmental footprint. There is now an increasing effort to develop guidelines and regulations for the responsible use of digital technologies, for example by the EU and by standard setting organisations. The goal of such guidelines and regulations is to mitigate the societal implications of digital technology. The harmful environmental impacts of digital technologies, however, do not get the same amount of attention yet.

Often the energy consumption of technologies, but also the more systemic environmental risks of using digital technologies, is an externality, which remains invisible and hard to quantify. This is a serious problem, which goes beyond the case of the blockchain, as it also applies to Artificial Intelligence, for example. It is crucial to better integrate sustainability in these efforts to regulate the societal impact of digital technology. The sustainability aspects of technologies should not be an afterthought, but taken into account already when a technology is proposed or designed.

Sanneke Kloppenburg is a sociologist interested in emerging digital technologies and their implications for the governance of sustainable production and consumption practices. Her work examines how digital infrastructures transform how we organise and govern systems of production and consumption, and the sustainability implications this has. Sanneke is particularly interested in processes of platformisation and the use of blockchain in energy, food, and mobility. She explores how such digital infrastructures bring along redistributions of responsibilities, new valuations, and inclusions and exclusions.

Combining social practices theory with digital sociology and science and technology studies, Sanneke also focuses on the use of digital tools and devices in everyday (urban) practices. Here, she explores how digital technologies (co)shape sustainable behaviour and forms of environmental citizenship. Sanneke works at the Environmental Policy Group at Wageningen University in the Netherlands.