Cost of crypto: report says US bitcoin as dirty as 6 million cars

Published September 23, 2022 Updated September 23, 2022 03:02pm

The carbon footprint of the United States bitcoin industry is rising at breakneck speed, a report from environmental groups found on Friday, now rivalling the emissions of six 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 decarbonise … 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 US coal plant — or close to the annual emissions of six 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 per cent of global bitcoin mining was located in the United States in 2020 — now it’s approaching 38pc, according to a recent study from the White House.

The groups urged US 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 0.09pc and 1.7pc of total US 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 its relatively clean, he told the Thomson Reuters Foundation.

“But every industry needs to take part in addressing the climate crisis.”

Mining boom

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 US 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 US 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.

Green bitcoin?

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 smooth demand.

Others brand themselves as green; publicly traded CleanSpark says its energy is more than 96pc 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.

Now you can follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

UNGA speech
25 Sep, 2022

UNGA speech

CRISES test a nation’s resilience but also provide opportunities to rise and move forward. Prime Minister Shehbaz...
Dar’s return
Updated 25 Sep, 2022

Dar’s return

Dar will now be expected by his party to conjure up fiscal space for the govt to start spending ahead of the next elections.
Iran hijab protests
25 Sep, 2022

Iran hijab protests

FOR over a week now, Iran has been witnessing considerable tumult after a young woman died earlier this month in the...
Post-flood economy
Updated 24 Sep, 2022

Post-flood economy

WITH a third of the country — especially Sindh and Balochistan — under water, over 33m people displaced, and...
Panadol shortage
24 Sep, 2022

Panadol shortage

FROM headaches to fever to bodily pain — paracetamol is used ubiquitously in Pakistan as the go-to remedy for most...
Star-struck cops
24 Sep, 2022

Star-struck cops

IN this age of selfies and social media, it is easy to get carried away in the presence of famous people, even if ...