SDG Series: Blockchain & Zero Hunger
Written and researched by Gabi Skoff
In a year as turbulent as 2020, it’s no surprise that the launch of the United Nations (UN) Decade of Action didn’t exactly begin with a bang. We now find ourselves well into 2021 — with just eight and a half years left to find and apply sustainable solutions to the world’s biggest challenges. The pressure is mounting to achieve the UN’s Sustainable Development Goals (SDGs) by 2030. Luckily, enabling technologies and a growing social and environmental consciousness across the globe hold promise for progress across each of the 17 goals.
A comprehensive 2020 report authored by the World Economic Forum (WEF) and PwC offers a glimpse into how the technological advances of the 4th Industrial Revolution (4IR) — including blockchain, artificial intelligence, drones, internet of things, and 5G — can directly support our work to achieve the SDGs. The report found that applied technological innovation could have a high impact in about 70% of the 169 targets underpinning the SDGs. Blockchain technology alone is central to more than 25% of the top technological solutions analyzed in the report.
If the current systemic trends continue — including an inadequate effort to confront climate change and regressive social progress in many countries — we may not reach the SDGs until 2073. A whopping 43 years behind schedule.
While it’s clearly time to get serious about applying 4IR technologies to global impact, the authors of the WEF report are rightfully cautious of a careless approach to using novel technologies in development contexts. Responsible 4IR technological solutions, specifically built with an impact focus, can offer a more conscious approach to mid-21st century problem-solving.
SDG2 — Barriers to Achievement
We are lagging behind in achieving many of the SDGs, but SDG2 ‘Zero Hunger’ stands out as especially dire — it’s one of the only SDGs in which progress has actually regressed. After decades of the steady decline of undernourishment across the globe, the number of people who suffer from hunger has been slowly increasing since 2015. According to the UN’s stats: “Current estimates show that nearly 690 million people are hungry, or 8.9 percent of the world population — up by 10 million people in one year and by nearly 60 million in five years.”
The reasons behind this regression are complex. The International Fund for Agricultural Development (IFAD) identifies three major barriers to timely achievement of SDG2: augmenting financial resources, dedicating more effort to transformative approaches, and reforming the architecture to ensure the goals are met efficiently.
Many, if not all, of the SDGs cannot be progressed without first tackling the challenge of food security that is central to SDG2. Without reliable access to healthy food and the protection of critical food sources, populations cannot progress socially or economically. It’s therefore vital that we consider solutions that address food security as quickly and thoroughly as possible.
How Can Blockchain Help?
As evidenced by the WEF report and others, blockchain-powered solutions in particular present a huge untapped reservoir of potential for helping us to meet development targets in both the Global North and South. Blockchain’s strength as an impact tool centers on its unique ability to securely capture, verify, and record any type of information without the oversight of a centralized body. This core capacity makes blockchain a technology that can bring inclusion, transparency, and decentralized verification to the heart of any approach.
An impact-focused blockchain can support the mission to achieve ‘Zero Hunger’ by creating an open ecosystem for results-based financing (RBF) that addresses each of the three identified barriers — incentivizing investment, tracking initiative impact, and organizing international effort.
While definitions and approaches are variable, RBF is defined by the World Bank Group as: “an umbrella term referring to any program or intervention that provides rewards upon the credible, independent verification of an achieved result.” Results-based development financing is increasingly considered as a vital approach to achieving the SDGs.
An RBF structure links financing for development projects to predetermined, quantifiable outcomes — with full payment made only upon verification that the results have been met. A results-based approach incentivizes investment by reducing funding risks, links aid to measurable results, and opens the door to a broad diversity of actors while shifting the focus from program to accountability.
Creating a Blockchain-Powered RBF Marketplace
Blockchain technology enables what is known as trustless transparency. The word ‘trustless’ implies that the technology doesn’t require users to trust the parties involved in a transaction. This quality eliminates the need for a middle-man to carry out a transaction, diffusing trust by cutting out traditional powers who may be deemed unaccountable, like banks or governments. Instead, the technology itself acts as the verifier of authenticity and the mediator of the exchange. Currently, RBF frameworks operate with scant focus on trust and transparency.
In a development context — where stakeholders may be invested in tracking non-tangible impact assets — trustless transparency offered by blockchain can play a critical role. Unlike tracking a physical asset, say a number of schools built, tracking nutritional outcomes requires increased trust in a digital system because there is no physical settlement.
Blockchain’s trustless transparency can introduce a higher level of accountability into RBF systems, filling a critical gap in this infrastructure with its unique ability to track and independently verify data relating to non-tangible assets.
Current RBF systems operate as a diversity of distinct, private projects — limiting the participation of donors and actors to those involved only at the outset of a project’s creation. Broadly, this means that most RBF projects are accessible only to highly sophisticated, large-scale donors and project initiators, such as governments and NGOs. The current state of RBF thus excludes small-scale actors and donors from contributing to the advancement of the SDGs by participating in a results-based service agreement. This presents a significant barrier to mobilizing more capital from a broader diversity of sources and engaging more project implementers and service providers.
A public, results-based digital ecosystem can be created using a blockchain-powered infrastructure to engage a more diverse range of donors and project implementers, and organize their work according to targets.
Imagine this blockchain application as the ability to create a results-based impact marketplace, where stakeholders have the ability to support, participate in, and track the progress of development projects according to target indicators. A blockchain-powered RBF marketplace could also help to lower the risk of duplicate and ineffectual programs, reward successfully transformative approaches, and provide an opportunity to learn from ineffective programs.
The unique ability of blockchain to bring radical transparency, greater inclusion, and decentralized verification to the core of a results-based financing approach could be the linchpin in our effort to progress not just SDG2, but to fill funding, tracking, and accountability gaps across all global goals. Luckily, it’s not a matter of creating the technology anew, but about applying it intentionally to achieve meaningful and sustainable global impact.
