Thomson Reuters Foundation: The Cost of Cryptocurrency: US Bitcoin Is Dirty Like 6 Million Cars

Thomson Reuters Foundation: The Cost of Cryptocurrency: US Bitcoin Is Dirty Like 6 Million Cars

A carbon footprint of the bitcoin industry in the United States is rising by leaps and bounds, according to a report released Friday by environmental groups, now rivaling the emissions of 6 million cars each year.

The groups urged US states to consider banning new mining operations to help protect the planet.

Emissions from the energy-starved sector could undermine goals to tackle climate change, said Jeremy Fisher, an energy analyst with the nonprofit Sierra Club and co-author of the report.

“We are at an inflection point,” he said. “We are trying to decarbonize quickly… bitcoin mining has the potential to undo some of that progress.”

The groups said the industry’s carbon footprint was 27.4 million tons from mid-2021 through 2022 — three times the largest US coal plant — or close to annual emissions of six million vehicles, 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 US in 2020 – now approaching 38%, according to a recent study from the White House.

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The groups urged US states to consider blocking new mining operations. This year, the New York legislature passed a law to stop any new fossil-fuel-powered operations in the state.

Bitcoin industry groups say the crypto sector is greener than other heavy industries and uses a relatively small amount of electricity — between 0.09% and 1.7% of all US energy, according to a White House report. The Bitcoin Mining Council, which represents some of the major players in the sector, released data showing that more than half of the energy used by 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 use.

“It’s a matter of perspective – if you’re going to compare it to other industries, like cement for example, it’s relatively clean,” he told Thomson Reuters.

“But every industry needs to be involved in tackling the climate crisis.”

Mining boom

The report, co-authored by environmental law nonprofit Earthjustice, pulls from public documents, facility records, regulatory filings and financial disclosures, as well as press reports and testimonies from activists across the United States.

Earlier in the year, a coalition of green groups launched a campaign to pressure Bitcoin to change its software – known as “Proof of Work” – to a less energy-intensive method, known as “Proof of Stake”.

“We have seen a relatively large increase in mining here in the US very quickly, since it was banned in China,” said Mandy Deruchi, an attorney at Earthjustice, who represents clients who are exploring how to challenge local mining operations.

“We are concerned about the direction it is going.”

In 2021, China imposed severe restrictions on bitcoin mining, prompting many companies to move or expand their presence in the United States.

Earlier in the year, Democratic lawmakers asked publicly traded bitcoin miners to disclose the energy they use.

Environmental groups say the environmental record of industry, energy use, and long-term impact on societies has largely been hidden from scrutiny.

Friday’s report highlights cases in which bitcoin miners have extended the life of fossil fuel stations, raised electricity rates, strained power grids, and failed to deliver on promises made to the local community.

Green Bitcoin?

Some miners say they benefit power grids by providing stability and financing for renewable energy generation.

In Texas, some miners struck deals with renewable energy providers and signed up for flexible use to ease demand.

Others describe themselves as green; Publicly traded CleanSpark says its energy is over 96% carbon-neutral.

“It’s not just that miners can be more efficient and use clean energy for their operations,” said Zach Bradford, CEO of CleanSpark. “But this bitcoin mining can actually accelerate the low-carbon energy transition.”

But in Kentucky, bitcoin mining has moved in the opposite direction, said Lynn Boldman, executive director of the Kentucky Commission for Conservation, an environmental group.

“A lot of these operations will support bad or dirty energy projects – and that’s exactly what happened here,” she said.

The report also examines what it says are the industry’s unfounded environmental claims.

Those tactics include relying on carbon credits or renewable energy “offsets” — tactics that Sierra Club’s Fisher said are meant to mask the true impact of crypto mining on the climate.

“There’s a lot of green washing going on,” he said. Originally published at: https://news.trust.org/item/20220922181848.

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