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How economic shifts contribute to climate change

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On 2nd of April this year, Russia, Saudi Arabia and the UAE announced a reduction in oil production. Such an unexpected decision immediately led to resumption of discussions about the relevance of alternative energy sources, use of solar panels, increase the number of electric vehicles and other issues of «green» energy. However, any scenario in which the «green agenda» can be implemented as an alternative to traditional energy sources requires huge investments which even the most developed countries of the world cannot afford in the current economic conditions.

The Economist magazine’s new cover is dedicated to the central element of the transition to clean energy — economy electrification and carbon-based fuel sources reduction. Where such a transition can leads to? Will try to understand it in our new article.

Trying to study this cover carefully, you will definitely pay attention to the strange word — “Environmentalism”.
Environmentalism is a social movement that spread in the 20th century in European countries and proclaimed the importance of environmental protection measures. The basic concept of Environmentalism says that humanity needs to transform nature in the interests of mankind and the assumption that people develop largely under the influence of the environment.

The main argument put forward in favor of changing the approach to energy independence is that economic growth should help but not hinder the fight against climate change. Stabilization of the climatic situation is impossible without stopping the production of electricity from the fossil fuel sources. But it should be understood that about 43% of the world’s population (mainly in the most economically weak countries) depends on dirty energy sources. An effective adaptation of the economies of such countries requires not just years, but decades. And everyone understands it!

Recent report made by the Energy Transitions Commission indicates that in order to ensure a sufficient amount of clean electricity it is necessary to change the ratio of existing energy stations powered by fossil fuels to the «green» stations in the 55:45 proportion. But these 45% which go to support traditional energy networks and fuel storage facilities, amount to approximately $ 1.1 trillion per year, which is $260 billion less than is necessary to maintain “green” energy networks. In addition, the introduction of new energy sources requires a huge amount of bureaucratic work which significantly hindering their development.

Is the energy transformation possible?

The unequivocal answer to this question is «yes». Modern energy networks can be transferred to the «green» railways quite quickly. But this requires encouraging governments and energy companies to follow the decarbonize process. European studies show that clear information about reducing emissions into the atmosphere supported by real data has a very positive effect on energy policy and contributes to the transition to the new energy sources.

Those who believe that there is no way to stop climate change through the economic growth like to quote Albert Einstein, who said «Humanity is not able to solve its problems using the same thinking that it used to create them». But economic growth makes it possible to build new power lines and installations for renewable energy. And this is a great incentive for each of us to do everything possible to contribute to the preservation of the health of our planet.
Soon we’re planning to launch the Green Falcon Carbon project — special blockchain project specializing in the tokenization and trading of carbon credits developed by the MalisaSoft — the UAE-based company specialized in creation of high-tech projects. This project will work on the basis of the HAQQ blockchain.

The HCC community has a large number of consumers interested in creating of such developments and we will expand the possibilities of using the HCC token within the frameworks of “green” projects development.

New and existing blockchain projects are exploring everything from switching to less energy-intensive consensus-building systems to exploring the possibility of mining based on renewable energy sources. While it seems obvious and effective to solve the problem of CO2 emissions and high energy consumption by banning cryptocurrency mining, such a decision can seriously slow down the development of the blockchain. And therefore, it is possible and necessary to look for solutions that can return the blockchain to the status of “green” technology. The most promising is the transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS). The operability of PoS-blockchains is supported by validators — owners of cryptocurrencies. They check user transactions, and if at least 2/3 of the validators agree that the transaction is correct, it is included in a new block. Validators are engaged only in useful work (verification), and not in sorting numbers, so they do not have a race for performance, like miners.

The PoS algorithm is the most environmentally friendly way of blockchain operation. It is he who is used in the work of the HAQQ blockchain of the IslamicCoin project. IslamicCoin cannot be arbitrarily printed and therefore devalued. It also cannot be “inflated” by raising the Central Bank’s interest rate; its price is determined by the market and, therefore, is always fair. IslamicCoin can be minted (issued) only by those who contribute to the work and investments as validators of the network at a predetermined announced rate.

HAQQ blockchain can also be used in projects of so-called green smart contracts. Green smart contracts open up new ways to combat climate change and overcome the negative consequences of its change. This is especially important in areas requiring the collection and verification of large amounts of data and the promotion of sustainable environmental behavior, such as regenerative agriculture, carbon offsetting, crop insurance, etc. Green smart contracts can help solve environmental problems as they expand the scope of environmentally-oriented blockchain-based solutions. And this is an excellent application for compliance with the 7 and 12 Sustainable Development Goals, declaring “Access to inexpensive, reliable, sustainable and modern energy” and “Ensuring rational consumption and production models”.

Advances in consensus mechanisms and a focus on the use of renewable energy sources will reduce the overall environmental costs of cryptocurrencies and blockchain networks with widespread adoption. There is still a problem of electronic waste from outdated mining operations that needs to be dealt with, but non-PoW cryptocurrencies will reduce the demand for the construction of new and larger mining installations in the future, which will potentially reduce energy consumption and environmental emissions.