Blockchain-based Governance for Social Welfare in the Forestry

Abstract

While the future must be aligned more ecologically, different intensive chal-lenges arise for the society. We exemplify these challenges by the multi objec-tives of a forest, since it offers renewable resources, conserves biodiversity, acts  as a carbon sink, and provides recreational functions in a simultaneous manner.  We approach the forest management problem (FMP) by using multi-criteria de-cision analysis (MCDA) with diverging stakeholder preferences as input and  social welfare across participating stakeholders as output. To reach social wel-fare, we focus on mechanism design to gather truthful stakeholder valuations.  Hence, this research in progress presents an instantiation of the participatory  MCDA in the context of forestry. The research objective is to examine how dis-tributed ledger technologies (DLT) can help to implement the mechanism and  to coordinate the participatory MCDA transparently and securely.

Introduction

The forest is a complex system that offers several ecological, economical, and social  services [1], while the demand for these services varies greatly and depends on pref-erences of heterogeneous stakeholders [2]. Involvement of stakeholders in the plan-ning process and exchanging information transparently [3], binding, reliable, and  transparent participation [4, 5] and similar activities promise to increase public com-mitment, the acceptance of decisions, and might help to reduce distrust between par-ties involved [6].

While stakeholder preferences diverge in forestry and their focus, besides others, is  on timber harvesting, recreation, water supply, or biodiversity conversion, it often-times results in multi-criteria decision analysis (MCDA). MCDA itself is a powerful  methodology to incorporate diverging preferences, to solve such multi-objective prob-lems and has therefore been proven to be a valuable methodology in the forestry [7]  over the last three decades [3]. Many MCDA approaches were combined with group  decision-making [8], which have also been applied in public participation for the  forestry [9] (in the following pMCDA). Today’s forest decision making usually follows a top-down principle, i.e., the forest decision power distribution is quite concen-trated (e.g., by the forest owner), while other stakeholders remain affected by, but are  not involved in forest decision making. Our assumption is therefore that forest man-agement must be more aligned to the overall interests to take full effect for the socie-ty. Consequently, we build on this research with the question on how to reach social  welfare by means of pMCDA. For this purpose, we show that distributed ledger tech-nologies (DLT, also known as blockchain) can help to reach social welfare (by using  mechanism design theory (MDT) [10]) and to coordinate the pMCDA, since it is  capable to exercise the role of a trusted third party (TTP). Although DLT was initially  discussed with cryptocurrencies, nowadays applications reach from voting systems  [11] to digital organizations [12], partly positioned in the field of cryptoeconomics.  Additionally, DLT-based governance is gaining popularity [13, 14] and is also dis-cussed in bioeconomy [15, 16].  

Following the steps of design science research (DSR) [17], we first put a problem  formulation and motivate it by describing the current situation in Germany. After that,  we derive solution objectives for an IT artefact in a requirement-driven manner and  conclude our research in progress (RIP) with further research steps.