‘Zero emission’ crypto miners are still polluting
Bitcoin's 2021 energy use has already surpassed its total consumption in 2020
After the recent Crypto Climate Accord, the mining industry claimed to turn green. However, bitcoin energy consumption has increased drastically in the last few months according to Digiconomist.
Environmentalists, who forecast that China's recent crypto-mining ban would actually increase emissions, blame the Proof of Work (PoW) mechanism behind BTC and ether – at least until the launch of Ethereum 2.0 in January with its new Proof of Stake protocol.
Although many are declaring zero emissions, not every miner is actually switching to green energy and some are still relying on fossil fuels, using carbon-offsetting websites instead.
The Accord’s overall objective is to decarbonise the global crypto industry by supporting the transition to net-zero greenhouse gas emissions by 2040 and net-zero emissions from electricity by 2030. The agreement was signed by more than 200 companies.
Despite this, bitcoin mining has already surpassed its total energy consumption in 2020 after a 62-fold increase from 2015 to March 2021.
An estimated 180 terawatt-hours per year of electricity – that's 180 billion kilowatt-hours – is currently consumed by bitcoin miners, twice the level in April, with experts expecting the China mining ban in June this year to increase further miners’ energy consumption and carbon emissions.
Following China’s crackdown, bitcoin mining in the Black Sea territory of Abkhazia has been blamed for overloaded electricity lines and power station fires, leaving some areas without power for days.
“The reason for this considerable GHG and e-waste footprint is rooted in the deeply energy-intensive Proof of Work process with which cryptocurrency miners compete to validate transactions on their blockchains,” explains a recent letter sent to the White House by several US national and international green organisations.
But that is not enough to explain the reason why miners’ energy consumption and emissions almost doubled in the past three months.
Offsetting websites and e-waste
Several miners declaring zero-carbon emissions use personal carbon-footprint calculators and offsetting websites that allow investors to donate funds using bitcoin or other cryptos to finance forest-conservation projects in developing countries such as Brazil, Indonesia and Kenya.
However, to tackle emissions from fossil fuel power stations effectively requires switching to a more eco-friendly form of mining, say researchers Peter Howson from Northumbria University, Newcastle, and Alex de Vries from the Digiconomist organisation in the Netherlands.
As they explain, the carbon calculator is commonly targeted at Ethereum investors, specifically those using the network to buy non-fungible tokens (NFTs).
Moreover, research shows that bitcoin mining produces 30,700 tonnes of electronic waste (e-waste) annually – comparable to the e-waste of the Netherlands – while the minerals often present in e-waste are limited resources and aren’t easily recyclable.
Following the reopening of redundant fossil fuel power plants for bitcoin mining, the New York State Senate is considering a three-year moratorium on mining operations.
Appeal from environmentalists
More and more environmentalists are calling for voluntary mechanisms for incentivising renewable energy use and sustainable waste management to regulate PoW cryptocurrencies, as well as tax frameworks to discourage investment in the most polluting projects.
“Every hour of every day in 2021, bitcoin used an amount of energy equivalent to leaving on several hundred billion lightbulbs. Bitcoin is cancelling out breakthroughs for global climate governance in other areas,” say Howson and de Vries in their report for ScienceDirect.
“Effective environmental regulation is urgently required that will not only reduce the threat of catastrophic climate change but will help the world’s poorest people towards sustainable development.
“Implementing restrictions on PoW mining would prove an easy win in progressing global sustainable development and climate change goals negotiated by the UNFCCC.”