Blockchain Summit Fireside Chat: How Carbon Neutrality Has to be an Ecosystem Game?
Leo Lin:
Hello ladies and gentlemen, my name is Leo Lin, and I’m the CEO of aitos.io. I’ll be your moderator for today’s fireside chat on how carbon neutrality has become an ecosystem imperative on so many fronts!
From our two distinguished guests, we’ll learn exactly how they implement solid carbon neutrality and sustainability strategies. Whether you are already a blockchain developer, work in a leading blockchain company, or even a related enterprise, you will not want to miss today’s informative session! Joining me today are Mr. Vincent Wang and Mr. Tze-Eng Chiew. I’d like to ask each guest to introduce themselves now.
Vincent Wang:
Hello everyone, my name is Vincent Wang, and I am the head of WanXiang Blockchain. I’ve been in this blockchain game since 2016. I am thrilled to be here and look forward to exchanging ideas and getting initiatives started in this marriage…., let’s call it a holy marriage of renewable core causes and blockchain technologies.
Tse Eng Chiew:
Thank you, Leo, and hello, everyone; my name is Tse Eng Chiew. My friends in the office call me Tze. I am the 5G & IoT transformation lead at NCS here in Singapore. On my LinkedIn page, I refer to myself as an architectural technologist. What interests me is emerging technology, including Web3 and Blockchain solutions; you might see these topics are hot buttons to catch my attention, and I am very interested in dealing with these emerging technologies. On a daily basis, I talk to many different enterprises about their ESG strategies and their net carbon zero objectives. I am delighted to share and exchange viewpoints with Vincent and Leo; thank you very much.
Leo Lin:
Thanks so much, Tze. Allow me to ask the first question. Do WanXiang Blockchain and NCS have carbon neutrality strategies to counter ESG requirements？ Since it comes to carbon neutrality, the blockchain is an essential digital tool to help plan the first steps to action. Therefore, please be so kind as to share with us from your experience how blockchain can create a net positive impact. Let’s start with Vincent.
Vincent Wang:
As we prepare for our regenerative innovative strategic initiative, there is already a generation of regenerative innovations to evaluate successful carbon and blockchain technology utilization. We have pinpointed three different categories enhancing these growth opportunities. The first is an enterprise-level carbon emissions measurement and voluntary emission reduction plan, and it’s on the infrastructure side. The second growth opportunity is on the community side. Our goal is to organize consumers, businesses, and governments together to form a cohesive ecosystem where carbon emission reduction is a major and shared goal, across the board, for all players, industries, and communities. The final category of opportunity involves the assetization of carbon infrastructure and renewable energy sources. Please allow me to make an analogy comparing our industry to farming and planting seedlings in the ground: The first is the insistence on integrating the IoT infrastructure with blockchain technologies to ensure beyond a doubt that carbon emissions are accurately measured and set against a benchmark to calculate local CCER (Chinese Certified Emission Reductions) or global emissions reductions standards. This can be compared to planting a seedling. If you want a seedling to grow, you first need to dig a deep enough hole in fertile ground and then plant the seedling. As you loosen and dig up the soil, dropping the seedling into the hole, it’s analogous to community work.
You first Build mindshare, modify behavior, then create incentives and governance. Finally, it would be best if you fed the seedling with water giving it nourishment and life. The watering part is analogous to a financial resource. How do you link the financial resources to these carbon initiatives? Wanxiang Blockchain has been mobilizing our ecosystem, including partnerships with leading IoT plus Blockchain companies, like Leo’s own BoAT technology from aitos.io; we are also working with significant partners under Wanxiang holdings in the financial sector to take care of the watering portion mentioned above.
In summary, we have deployed the seed and the water, and now we are deploying the means to move forward with hot innovations like the Metaverse or the establishment of DAOs. These new initiatives fully utilize Web3 infrastructure to build the community and create the incentive to do mechanism design. Our goal is not only to launch successfully, but more importantly, it’s critical to nurture sustainable business models, mature, sustainable energy, and grow a sustainable world.
Leo Lin:
Thanks, Vincent, for sharing this valuable insight. Hi, Tze. Since your role deeply meshes with the growth of 5G and IoT deployments, please share how 5G deployments of IoT plus blockchain technologies can play a role in accelerating the cause for a net zero future.
Tse Eng Chiew:
First of all, I like the analogy that Vincent used. It was brilliant! The journey toward net carbon zero involves a complete ecosystem play. In my analogy, I usually compare it to a forest. It’s almost like being in a forest, where you have sunlight, soil, and seeds in the woods. Still, you also have many different types of plants. For the ecosystem to flourish, all the fauna and flora need to cooperate for every living organism to play a role in its evolution. It’s analogous to the telco industry. We are just one such industry out of many different industry verticals. Each ecosystem player needs to contribute to carbon neutrality in our fight to reach carbon net zero standards. An interesting fact is that the telco industry was one of the first to pledge to a net carbon-zero future. The global telco industry has contributed about 2%-3% of total energy consumption globally, which is not a minor issue when you realize Telcos provide connectivity and manage massive data center infrastructures. Data consumption from Telcos is proliferating while the energy consumption generated from telco data centers is also growing massively; Telcos need to work together to reduce energy consumption and contribute more as global citizens to achieve the goal of net carbon zero. As the hottest topic these days in Singapore, 5G is really about a fifth generation in telco cellular connectivity. The Industry has progressed from 3G, 4G, and now 5G, and in terms of energy consumption, 5G consumes about two to three times more energy than 4G in the network. However, in terms of energy efficiency, 5G is 20–30 times more efficient than 4G, which is very important, as previously stated. More data consumption means more data traffic, too, making energy efficiency the key stabilizing factor for long-term growth. Let’s compare the refrigerator or air conditioner in a home. It needs to be more energy efficient. Thus, there is no difference in comparison to 5G infrastructure. If we want energy efficiency, we must reduce energy consumption by making that energy more efficient when used, which will help advance our carbon neutrality goals!
When 5G becomes more energy efficient, it will indeed have a direct and enormous impact, but there is a secondary impact as a technology/services enabler that we should discuss. 5G will enable different technologies such as self-driving cars, stealth optimization traffic management, or smart manufacturing, indirectly contributing to lower energy consumption and higher energy efficiency. Let’s take a deeper dive into this for a minute: if we have self-organizing traffic and self-driving cars, the result means reduced traffic congestion. I can bring a clear picture into my mind of major traffic choke point cities like Bangkok and Jakarta. Traffic congestion contributes to carbon emissions from all these idling vehicles clogging up these cities’ streets, adding to GHG emissions. 5G usage in self-organizing traffic management platforms will lower energy consumption and make these cities smarter and cleaner!
Leo Lin:
Thanks, Tze, for sharing these sharp points of view. Hi, Vincent; let’s probe deeper here on this topic. You possess a rich history of experience in enterprises and government sectors. Are you seeing more enterprise customers and governments exploring the usage of Blockchain for the value of beefing up their ESG strategies compared to a few years ago? Are there specific usages and application experiences that you can share with us? Based on the feedback collected from these diverse sectors, are there emerging trends for us to be aware of?
Vincent Wang:
Let me detail my thoughts on this topic. I am not a big fan of the acronym “ESG” a good acronym or concept should automatically organize people’s imagination and resources and focus actions in a particular direction. Still, the term “ESG” doesn’t suggest how we get results, and it’s a vague time to me. Companies believe the environment, governance, and positive social change are critical, but this term has empty pockets with no call to action for what to do about it. The World is ready to create a type of ESG 2.0 with more teeth for how to weave a tighter narrative.
I’ll go back to my metaphor of the seed, loosening, and watering of the soil. Comparing the origin to enterprise carbon emission preparedness, it’s something we take very seriously in strategic planning. In 2021, Wanxiang introduced its “VenaCube” carbon emission cube, a three-dimensional (3D) multiple-level solution to manage enterprise needs on different levels. Please try to envision this in various (3D) levels as we explore the highest-dimension view, which is how enterprises look at carbon emissions from the assets, investments, and management perspectives. How do you measure emission reductions and investments using more positive carbon-capturing assets, and what is the cooperate strategy? From this highest dimension of the 3D cube, we focus on providing strategic consulting, methodologies, and quantifiable models. The second dimension is on the operational/factory level (providing optimized solutions using IoT deployments in a manufacturing line) based on incorporating carbon reduction incentives into the line operations. We offer the tools needed for a factory to be more carbon efficient and a more overall viable player to serve the highest dimension of the corporate strategy (discussed already). The third dimension is the product dimension; this is fascinating because it’s not just about the manufacturing measurement of carbon emissions. It tracks the footprint of an individual product; we can track the supply chain, the BOM (Bill of Materials) costs, and the cost of goods sold. At the point of sale, we will use CRM tools, and after the sale, we will use product life cycle management tools. What carbon offers this product level management is not just a narrow connection trail after the product ships. It gives us a better way to connect with customers in a long-tail fashion for supporting carbon emissions reduction program participation. Let me give you an example. Suppose a refrigerator is ordered from Haier and has been optimized to track emissions along with standard life-cycle management diagnostics. In that case, there will also be a profile recorded of its carbon emissions and carbon emission optimization. This is all possible because of the cellular IoT modules built into the refrigerator from Haier and many other OEMs. Tracking each refrigerator after being sold into the market to determine its emissions totals can be challenging for Haier at a product-level carbon accounting level. Looking at the bright side, though, it offers an opportunity for Haier to reach out to the customer through its carbon emission milestone for the product and interact with the customer to serve that customer’s carbon emission targets. This will give them a digital anchor into wholesales and the customer’s user behavior for the product, which is critical and productive to the continued success of an OEM-customer relationship.
Please allow me to supply an example of a product-level solution that we introduced in this VenaCube and the result from using it. These three dimensions are our answers to the enterprise level or seed level (using IoT plus Blockchain — both as a way to measure carbon emissions reliably) and as a way to use IoT technology to provide a long-tail engagement strategy with our customers. How do we make carbon emission reduction relevant to all members, different layers of society, and our economy? Now, I can draw a comparison and echo Tze-Eng’s remarks with his analogy about the forest.
Environmentally friendly activists back in the 1980s &1990s were called “tree huggers. Yet, recently, with the rise of renewable energy, it is entirely conceivable to have solar power panels or wind turbine huggers in our ecosystem. We can make friends with these renewable sources. On an individual level, in a truly distributed fashion, we can perform micro-investments into renewable infrastructure projects we believe in, including crowdfunding, to improve the overall carbon footprint of our community. It not only brings forth resources and creates initiatives to let all members of society feel engaged, but it also introduces accountability; imagine a softer rewards mechanism for how carbon incentives are provided.
Right now, we observe many incentives that look very negative. This is because when a carbon emission structure isn’t optimized correctly, the user can get penalized, yet down the road, the balance will shift to more rewards and away from penalties. At this stage, resources need to be brought in, so this is where the fundamental value of blockchain will come into play in the coming economy. A common theme of social networks is that Blockchain is great, but no killer apps exist. That is untrue! Blockchain has proven a number of killer apps. One of the leading killer apps for blockchain is assetizing the traditional product or un-assetizable asset. We have discussed our agricultural and biological assets (Cattle). You can use IoT technology combined with Blockchain to create a digital twin to manage live cattle as an investible asset. But that is only the beginning. A solar panel, solar farms, for example, how do you raise funds on the solar hub farm? How do you divide them into manageable modules for different investors to participate in, and how do you introduce accountability for the operation of these solar farms?
Solar farms, wind, and hydraulics energy production are all in common. What is it that they have in common? They tend to be in remote areas, and being in remote areas, the challenge that many investors will feel is that we need to figure out how good the regional governance structure in these remote areas can be. This is where a digital twin and blockchain can come in; a blockchain can provide total transparency into these renewable assets and make them trustworthy and reliable. And, for sure, it lowers the risk threshold of investors and financial institutions to invest. I have introduced this analogy now, but what else do we need to move forward? We also need climate, regulations, and financial policies. We also need financial markets and government agencies to enter the market to improve the climate gingerly, and fortunately, we are starting to see this around the World. Then, the Lifecycle of a productive forest will begin and be sustained.
Leo Lin:
Thank you, Vincent, for those valuable use case application examples from the different levels. Let me take us way back to the beginning of ecosystem and collaboration. Carbon neutrality strategies must develop in partnership with large institutions, individual activities, and enterprise initiatives. Tze-Eng, in your option, how is ecosystem collaboration essential in contributing to net carbon zero? Can you tell us about a few industrial examples for us?
Tse Eng Chiew:
Yes, Leo, I can explain how ecosystem collaboration is essential to contributing to a net carbon-zero planet. Achieving net carbon zero is no small feat. It’s almost as challenging as trying to solve World hunger, but it is ten times more complex and linked to the survival of humankind. It has many implications, and the stakes are super high. To achieve net carbon zero objectives, governments and enterprises need to cooperate, and I don’t just mean big enterprises, but individuals also need to contribute. This involves a mindset and behavioral change; it’s not easy. Let’s use electric vehicle usage as a perfect example. We have been driving internal combustion engine cars with petrol and diesel fuel for the last hundred years. How would we suddenly introduce and expect those drivers to quickly adopt the concept of driving an electric vehicle? When recharging an electric vehicle, the consumer wouldn’t naturally go to a Petrol or gas station to fuel up! For instance, the city-wide infrastructure must change to accommodate driver habits. Millions of EV charging stations will not miraculously appear overnight for early-adopter EV users. This is where we will require the government to step in and provide incentives for purchasing and using electric vehicles.
Incentives from industry leaders are needed to help change individual citizens’ behavior in the form of tax incentives. For example, in Norway, in the span of only 3–4 years, they managed to convince a vast majority of their citizens’ car purchasing behavior to change from buying petrol fuel cars to electric vehicles via a tax incentives plan, perhaps lowering taxes for whose drivers who volunteer 1–2 times a week to car-pool with other EV drivers, and other programs to change driver habits. Habits can change, and behavior can be learned through programs. An incentive can play a super important role in enticing people to adopt energy-efficient practices. After EV incentive programs kick in and become successful for EV drivers, the actual hardware of the EV needs upgrading to at least 4G/5G connectivity. This will allow cellular-to-vehicle communications to enable a hyper-connected intelligent traffic management system. Hence, the secondary planning phase can kick in for lower carbon emissions because you get less traffic congestion.
There is one other big issue with how to handle energy production. Most of it right now comes from coal and non-renewable sources. The government could implement new regulations for new data centers, requiring them to comply with meeting very high PUE index standards stringently. This is easier said than done, though; here in Singapore, it takes much work for a data center operator to meet a PUE level below 1.3 or 1.25, compared to a data center operator from a Nordic countries’ PUE performance levels. The Northern hemisphere climate is cool; Singapore is very hot, and it isn’t easy to run data centers energy-efficiently here. Being a small Island nation, Singapore has no natural resources to generate enough renewable energy resources. Yet, it should consider cooperating with other countries in the Northern hemisphere to import some of these renewable energy resources into Singapore.
This is a cheaper way for Singapore to be most compliant while encouraging the emergence of other alternative and renewable energy sources. Let me give one clear example of emerging fuel cell technologies for vehicles. Shipping hydrogen from one geographical location to another will enable equal distribution of renewable energies to be consumed by different enterprises and countries all over the World. This is something Singapore has been researching.
Leo Lin:
Thank you, Tze, for those fascinating examples about the ecosystem and different industry collaboration efforts. We discussed technology and products related to carbon neutrality and sustainability; let’s now discuss the carbon economy and financial incentives. This was mentioned by both Vincent and Tze-Eng already. Let’s direct this question to Vincent. Perhaps, Vincent, you can give us fresh feedback on your views of the Refi — Regenerative finance World and detail a few points?
Vincent Wang:
Regarding Regenerative finance, the most outstanding value is how people focus their attention on how Blockchain and financial resources can be bought together, as technology means and for resources to help our Earth regenerate. I covered several aspects of what we usually associate with ReFi, for example, how to assetize a significant build-out of renewable energy infrastructure and how we handle accounting aspects. For instance, it doesn’t make sense to look at a massive solar farm the same way you look at a bridge or a canal; there must be new ways to look at infrastructure investments. These investments are collected across both space and time and play a role in how we organize these resources. For example, many different banks may have a shared interest in this infrastructure. Still, these interests in the case of what’s new about Regenerative Finance is that the interests of these financial institutions that they take in these renewable infrastructure projects are not only fiscal but also social. This is why the whole “ESG” acronym was created to combine governance, social impact, and environmental initiatives.
The threat of climate change is becoming Increasingly undeniable every year, and increasingly, we will see large financial institutions face pressures not only to their return on investments but also by social and environmental impact on the implementation of their climate change policies. I don’t have a crystal ball to predict the future. Still, perhaps a community alliance of investors or financial institutions can pool their resources for a more holistic investment strategy globally. Suppose they were to ally with like-minded large resource firms. In that case, they could have at their disposal a business model built upon a larger infrastructure holistically managed and holistically accounted for. WanXiang Blockchain had already established this type of structure a few years ago as we began forming this kind of industrial alliance. Based on a point, a measurement system will calculate each player’s contributions to this alliance’s success. And I predict this could happen down the road.
I look forward to seeing the ingenuity that goes into designing such vehicles. I want to clarify; I am not talking about JVs here when discussing alliances. Blockchain offers a new way to engage with other businesses, which traditional JVs between different entities can not do. In a JV, your contribution is measured by the percentage of the capital invested, which is different from the accurate picture. It’s only a distorted view of the contribution. The more outstanding contribution occurs once the JV is in operation, the question is what new business each partner is bringing into the JV for it to be enticing. What is the volume of value that can be driven in this alliance? Very commonly, the way a JV fails is because the JV only puts up the capital, and they don’t care; they want other people to make more contributions to the entire operations of the JV. They just put up the capital, and that’s it. Because corporate governance structure usually operates in this sort of mechanism and flow process by validating a business by putting up the money. The operational management and detailed operational contribution is a more meaningful way of measurement, but without blockchain, it cannot be measured accurately; yet, with blockchain and a good incentive mechanism design and a good governance structure, this is doable and something that will revolutionize the way corporations work with one another. Please take note of the two key points the “holistic” rather than individualistic project and a brand new alliance infrastructure with a viable incentive model.
Leo Lin:
Thanks for this valuable insight from Vincent. I have one last question for both of you. We have blockchain builders here who are listening now and may be interested in entering this space for carbon neutrality projects for sustainability. Can you offer any advice for them? Please note that we have limited time, so you could briefly guide them on best practices.
Tse Eng Chiew:
I encourage any web3 developers always to explore many different initiatives, especially the one brought up by Vincent. That sounds awesome to me. I would love to learn how to participate if I’m a developer myself. I would want to know, as an individual web3 developer, how you might participate in this larger ecosystem towards doing good, sustainable, and carbon-zero projects.
Vincent Wang:
My one sentence is to follow 5G development. All these people passionate about Web3 and DAO should look at 5G, especially 5G messaging, as the portal of their choice. 5G is booming, and several important tools will establish contributors’ credits and credentials through 5G messaging. For those familiar with 5G, Messaging is capable of running browsers and APP interfaces within that messaging window and can be tied to a DID. That is all the infrastructure you need. This is longer than one sentence, but I wanted to push Tze-Eng to support the 5G cause.
Leo Lin:
It’s 5G plus Web3, that’s wonderful. Thank you, Vincent and Tze-Eng. We believe it’s crucial to highlight organizations like yours that are guiding the blockchain to the industry for achieving a carbon neutrality strategy.
Thank you, everyone
About aitos.io
aitos.io is a technology start-up focusing on the integrated innovation of IoT and Blockchain. By combining its own rich resources in the IoT industry, aitos.io has raised the standard for an open-sourced blockchain application framework BoAT (Blockchain of AI Things) with delivered via IoT chipset and module to enable IoT devices quickly implement trusted data on-chain and access the blockchain services. At the end of 2019, aitos.io and nine mainstream cellular wireless module manufacturers jointly initiated the Blockchain IoT Module alliance, and successively released their own brands of BoAT blockchain module products. This resulted in hundreds of millions of IoT devices equipped with the capability of blockchain services access as a trusted entry of IoT+Blockchain application. aitos.io’s vision is to leverage an alliance of global IoT vendors to empower them to tap the value of applications and data.
At the beginning of the project launch in the end of 2018, aitos.io received angel investment from the IoT industry expert group and strategic investment from Wanxiang Blockchain. In December 2018, aitos.io was awarded membership into ARM Accelerator Camp. In June 2019, aitos.io emerged as the founding member of China Unicom IoT and Wanxiang Blockchain IoT+Blockchain Joint Innovation Center. In November, aitos.io became a empowerment partner of Microsoft’s AI and IoT Lab . In August 2020, aitos.io transitioned into Tencent’s Blockchain Accelerator program as the first member. In February 2021, aitos.io joined RISC-V International as strategic member and initiated to form new Blockchain SIG (special interest group). In April, aitos.io initiated 1st China technical requirements standards for trusted blockchain access of IoT terminals.
