The carbon footprint of the US bitcoin industry is rising at breakneck speed, a report from environmental groups found on Friday, now rivaling the emissions of 6 million cars each year.
The groups urged US states to consider bans on new mining operations to help protect the planet.
Emissions from the energy-hungry sector could undermine goals to tackle climate change, said Jeremy Fisher, an energy analyst with the non-profit Sierra Club and a co-author of the report. “We’re at an inflection point,” he said. “We’re trying to rapidly decarbonize…Bitcoin mining has the potential to undo some of that progress.”
The industry’s carbon footprint, the groups said, was 27.4 million tonnes from mid-2021 through 2022 – three times that of the largest U.S. coal plant – or close to the annual emissions of 6 million cars, according to a calculator from the Environmental Protection Agency. Bitcoin mining involves a network of energy-intensive computers that verify bitcoin transactions, and compete among themselves for new coins. Only 3.5% of global bitcoin mining was located in the United States in 2020 – now it’s approaching 38%, according to a recent study from the White House. The groups urged U.S. states to consider blocking new mining operations. This year, the New York legislature passed a law to pause any new operations in the state that run on fossil fuel.
Bitcoin industry groups say the cryptocurrency sector is greener than other heavy industries and uses a relatively small amount of electricity – between 0.09% and 1.7% of total U.S. power, according to the White House report. The Bitcoin Mining Council, which represents some major players in the sector, has released data showing that more than half the power used by its miners comes from renewable sources.
The council did not respond to a request for comment.
“Bitcoin is a technology with a lot of positive and negative climate potential,” said Elliot David of Sustainable Bitcoin Protocol, a company that works with miners to promote clean energy usage.
“It’s a question of perspective – if you are going to compare it to other industries, like cement for example, then it’s relatively clean,” he told the Thomson Reuters Foundation. “But every industry needs to take part in addressing the climate crisis.”
The report, co-authored by the environmental law non-profit Earthjustice, pulls from public documents, utility records, regulatory filings and financial disclosures, as well as press reports and testimony from activists across the United States.
Earlier in the year, a coalition of green groups launched a campaign to pressure Bitcoin into changing its software – known as “proof-of-work” – to a less energy-intensive method, known as “proof-of-stake”.
“We’ve seen a relatively large increase in mining here in the U.S. very quickly, since it was banned in China,” said Mandy DeRoche, a lawyer with Earthjustice, which represents clients exploring how to challenge local mining operations. “And we’re concerned about the direction it’s going.”
In 2021, China severely restricted bitcoin mining, leading many firms to relocate or expand their U.S. presence. Earlier in the year, Democrat lawmakers asked publicly traded bitcoin mining companies to reveal what energy they use. Environmental groups say the industry’s environmental record, energy usage and long-term impact on communities have largely been hidden from scrutiny. Friday’s report highlights cases where bitcoin miners have prolonged the life of fossil-fuel plants, pushed up electricity rates, strained power grids, and fallen short on promises to the local community.
Some miners say they benefit energy grids by providing stability and financing to renewable power generation. In Texas, some miners have inked deals with renewable energy providers and signed up for flexible usage to smoothe demand. Others brand themselves as green; publicly traded CleanSpark says its energy is more than 96% carbon-free.
“It’s not just that miners can be more efficient and use clean energy for their operations,” said Zach Bradford, CEO of CleanSpark. “But that bitcoin mining can actually hasten the low-carbon energy transition.” But in Kentucky, bitcoin mining has moved in the opposite direction, said Lane Boldman, executive director of the Kentucky Conservation Committee, an environmental group. “A lot of these operations are going to be propping up bad or dirty energy projects – that’s exactly what happened here,” she said. The report also examines what it says are the industry’s unfounded environmental claims.
Those include a reliance on carbon credits or renewable energy “offsets” – tactics that the Sierra Club’s Fisher said aim to hide the true impact of crypto mining on the climate. “There’s a lot of greenwashing going on,” he said.
Also Read: Jimmy McNelis of Nameless on market implications of untested NFT projects
Follow us on Twitter, Facebook, LinkedIn
Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.
Author
Administraroot
Related Posts
