In Malawi, dust hangs low over the towns, mingled with smoke from cooking fires. Above the dry earth, brilliant orange mangoes hang from the trees. In the very early morning, groups of women can be seen carrying buckets and jerry cans as they scour the commercial capital, Blantyre, for water. It lies at an altitude of over 3,000 feet, and in periods of water shortage, some districts can go without water for days.

These “bucket brigades” can start as early as 2 a.m., knocking on the doors of wealthier homes and asking to fill their buckets. Then, they walk for hours carrying the water back home. “I’ve seen people go without food, and that is very difficult,” said Jasmine Leitao, who worked in the humanitarian sector in Malawi for 15 years. “But water just seems like a fundamental human right, and it’s such an extreme form of suffering to have to walk so far to find it. It’s the poorest who are hardest hit.”

Water scarcity is just one of a slew of problems caused by climate change, which is already impacting many of the world’s poorest people. Scientists on the United Nations’ Intergovernmental Panel of Climate Change (IPCC) estimate that $2.4 trillion of annual global investment in renewable energies is needed every year until 2035 to even begin slowing or reversing catastrophic climate change. The Paris Climate Agreement managed to secure an annual pledge of $100 billion for its Green Climate Fund (GCF) to be distributed to poorer countries to help them adapt to climate change. Yet, in reality, the fund has only received a little over $10 billion to date.

The Green Climate Fund has been beset by difficulties, including failing to secure new funding or agreeing on major policies. Distributing funding has become embroiled in complex and opaque bureaucracy. Developing countries rely on intermediaries like U.N. agencies or the European Bank for Reconstruction and Development (EBRD) to design project proposals for them. Profit-driven multinational banks also help manage the fund, dishing out a combination of grants and development loans, leading to a bias towards income-generating projects over those with the greatest environmental impact.

Harsen Nyambe, head of environment at the African Union Commission, said that when it comes to assessing projects, “they should not only look at the bankability of the project, they should also consider the social and economic benefits which sometimes are very difficult to measure.”

Meanwhile, the transition to a low-carbon economy has been outpaced by the accelerating rate of climate change. In Malawi, most people rely on farming, hoeing fields into furrows in the hottest months in anticipation of the first rains. But climate change is already causing crops to fail, and subsistence farmers are being admitted to hospital with starvation.

In a united effort to break the logjam of climate finance bureaucracy, the Blockchain Climate Institute (BCI) was established as a think-and-do tank during the 2017 United Nations Climate Change Conference, known as COP23. It’s now a global network of 80 blockchain experts from 30 countries working to bring technical innovation to the climate policy community.

Tim Reutemann, chair of the BCI’s green finance working group, said it can take five years for funding to be spent on the target project. The traditional ways of overcoming trust issues between all parties “accreditation, detailed planning documents, and repeated approval letters from the national governments, are the main drivers of bureaucracy,” he said.

But blockchain, artificial intelligence, and smart contracts have the potential to disrupt the entire green financial marketplace, automating systems to find smarter and faster ways of administering climate finance and green energy.

The Blockchain Climate Institute presenting at the COP24. Photo courtesy of BCI.

Paul Brody, Principal & Global Innovation Leader of Blockchain Technology at accounting firm Ernst & Young, explains that blockchain became popular as a way of powering effective public ledgers of shared assets, with bitcoin just the most famous example. Other projects have included a land registry in the Black Sea country of Georgia, public energy data tracking in Chile, and voting in Switzerland.

“Without the necessity of appointing a central authority to keep track of the books, instead all the participants in the network review transactions and check up on each continuously,” he said. “It was a technical breakthrough because, in the past, it was not possible to transact with confidence and security without appointing a central authority.”

Alastair Marke, Director-General of the BCI, said a blockchain-based system could be used to monitor, report, and verify (MRV) climate finance resource flows and operations. “That, in turn, could provide a relevant framework to scale climate finance and provide safeguards to investors,” he explained. “As transactions are timestamped, traceable, and replicated across all nodes, the risk of data tampering, double-counting, greenwashing, and inaccurate MRV are minimized because records are available to the public domain and open to inspection. This is central to establishing trust in climate finance.”

In smart contracts, the terms and conditions of the agreement are pre-programmed with the ability to self-execute. “This could automate payment of grants,” said Marke, “making it easier for smaller-scale projects to receive funding and more cost-effective, and less risky for investors.”

Smart contracts can pool data from different sources and initiate fast and cheap disbursement for lending. They could also help make peer-to-peer lending accessible for green energy projects, helping to bypass the bureaucratic loan approval process.

“This could automate payment of grants, making it easier for smaller-scale projects to receive funding and more cost-effective, and less risky for investors.”

Beyond this, there is potential for artificial intelligence to inform monitoring of climate change prevention, said Marke. “Image recognition through deep neural networks could identify afforestation, preservation, and logging activities in protected areas, and could be connected with smart contracts to trigger financial transfers.”

Together with expert stakeholders, Marke is developing a blockchain-based climate funding platform to simplify the climate finance accreditation and funding disbursement process and offer technical guidance and assistance for project development. He said the focus, at the moment, is predominantly on grant projects with milestone payments.

There’s still a lot of work to be done before the platform can be rolled out and some big challenges to consider, such as how underdeveloped countries with poor internet infrastructure could access the platform.

“Initially, electronic democratization of climate finance will remain a club of the willing. And most importantly, a lot of experiments on the rules and incentives are required before any serious proposals for a $100 billion apparatus can be made,” said Marke. “Afterwards, an incentive mechanism is required to scale the project and invite broader participation.”

Brody believes that development banks or other institutions will be needed to help kickstart some of these opportunities in cooperation with technology and social entrepreneurs. He hopes to see some early ideas take root in 2019.

It’s a paradox of modern history: The 18th century Industrial Revolution that brought the most drastic improvement in modern living standards could also destroy the planet. But innovation, the BCI believes, could once again be harnessed to reverse the trend.

“Meaningful action requires no less than a global revolution disempowering the most entrenched empire in human history,” said Reutemann. “I feel overwhelmed every single day, but the survival of DNA-based life forms seems like a worthy goal.”

Update: An earlier version of this story incorrectly stated the capital of Malawi. Blantyre is the commercial capital.