Utilizing NFT in response to climate change

An effective way to read trends is to understand technologies that usher in changes. What comes to mind when you hear the phrase ‘disruptive technologies?’ This column explores how NFTs based on blockchain touted as one of the iconic technologies of the 4th Industrial Revolution can be leveraged to empower our responses to climate change.

 

 

 

 

What is a blockchain-based NFT?

 

In a nutshell, blockchain is a new breed of hacking defense technology. Efficiency and immediacy are the strengths of this technology but the most remarkable one is security. Blockchain provides a fair and secure platform drawing upon a series of information technologies accumulated since the emergence of the Internet in the 1990s. Hence, a wide range of transactions optimally linking prosumers and consumers are enabled by blockchains thanks to such characteristics.

 

 

NFT, drawing upon the innovative blockchain technology, is the acronym of non-fungible token, indicating a scarce and irreplaceable token. Simply put, it is an encrypted token that is forgery and counterfeiting-proof and associated with economic value. On an NFT-trading platform, all participants share ledgers and testify transactions at the same time. It is neither necessary to trust each other nor to distrust given data.

 

 

 

 

 

Cases where NFTs are leveraged for environmental preservation

 

 

NFTs are used for a variety of applications in several industries. We present some cases where tokens are utilized not only for economic gains but also for social sustainability. In those cases, NFTs are regarded as value-storing assets and valued in reference to social consensus and demand/supply mechanism. In other words, NFT value is determined by how scarce it is. For instance, masterpieces created by celebrated painters are priced exorbitantly not because such paintings contain as much intrinsic value but because many consumers highly treasure those paintings that happen to be available only in limited quantities. There are many cases these days where consumers can engage in eco-friendly practices simply buying NFTs.

 

 

1) NFT leveraged in preserving the tropical forests in Amazon

Brazilian social enterprise Nemus sells NFTs mapped to specific sections of the Amazonian tropical forests. Their NFTs are priced between a minimum of 150 dollars to a maximum of 51,000 dollars. Proceeds from the NFT sale are used to fund tree preservation and forest restoration programs in sections of the Amazon. In return, NFT purchasers are given illustrations of plants or animals found in the Amazonian tropical forest.

 

Nemus sells NFTs mapped to specific sections of the Amazonian tropical forests (Courtesy: https://nemus.earth)

 

 

2) NFT used in the UN’s climate change response program

The United Nations (UN) has launched a digital art program to help with responses to climate change in partnership with the blockchain platform Unique Network. This program allows young artists to transform their works of art committed to environmental preservation to NFTs. The UN encourages engagement in actions against climate change by fostering a forum of unique artistic statements on the NFT platform.

 

UN-Unique Network’s Digital Art Program (Courtesy: https://digitalart4climate.space/)

 

3) KIA Motors EV Digital Art NFT

KIA Motors sold digital art NFTs themed after its iconic eco-friendly SUV model Niro in Klip Drops, Kakao’s blockchain-based distribution service platform. NFTs were reportedly sold out in just 15 seconds after they were rolled out. Proceeds from the NFT sale are donated to maritime environment protection programs via Naver Happy Bean service, adding another NFT-based ESG management initiative to the ever growing list of comparable cases.

 

KIA Motors EV Digital Art (Courtesy: Newsroom, Hyundai Motors Group)

 

 

 

 

NFT’s impacts on and benefits for environmental challenges

 

NFTs leveraging the strength of blockchain technology are being used for more applications. Yet, some are also criticizing that NFT transactions rather increase greenhouse gas emissions than consume significant electric power. Elon Musk stopped to accept cryptocurrencies as payment for Tesla in May, 2021 because of considerable power consumption by Ethereum transactions. And NFTs are converted to cryptocurrencies like Ethereum. In addition, when Hype Co., Ltd., the talent agency of BTS, announced a plan to sell NFTs featuring photos of BTS members in partnership with Dunamu, a Kakao affiliate, some BTS fans opposed the plan, citing the adverse impact on environmental issues.

 

If an effort to preserve environment backfire by increasing greenhouse gas emissions, those efforts will not be endorsed. Some NFT programs are now considering donating part of proceeds from NFT sales to environmental preservation initiatives to offset the carbon footprint of NFT transactions. As well, considerable numbers of Bitcoin miners are attempting to use renewable energies.

 

There is no denying that blockchain technology offers unique strengths and infinite potential. However, we still need to wait and see whether blockchain technology will contribute to unleashing innovative endeavors to address the critical climate challenges facing mankind.

 

 

 

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