Crypto mining could hinder efforts to tackle climate change, a report warns
A report from the Office of Science and Technology Policy (OSTP) calls for industry standards and threaten actions over energy-intensive mining practices with PoW.
Cryptocurrency mining operations have the potential to impede or advance efforts to tackle climate change, according to a report released by the Office of Science and Technology Policy (OSTP) in the White House.
“Depending on the energy intensity of the technology used, crypto-assets could hinder broader efforts to achieve net-zero carbon pollution consistent with U.S. climate commitments and goals,” warned the report out of the White House, which is the result of the executive order signed in March by President Joe Biden.
“The ability for rapid growth in crypto-asset electricity usage raises concerns about fast increases in electricity usage, and subsequent impacts on consumers and the grid,” the report says.
According to the statistics cited by the White House, annualized electricity from global crypto-assets grew rapidly from 2018 to 2022, with estimates of electricity usage doubling to quadrupling. As of August 2022, published estimates of the total global electricity usage for crypto-assets are between 120 and 240 billion kilowatt-hours per year, a range that exceeds the total annual electricity usage of many individual countries, such as Argentina or Australia. This is equivalent to 0.4% to 0.9% of annual global electricity usage and is comparable to the annual electricity usage of all conventional data centers in the world.
The report estimates that annualized global crypto-asset electricity usage grew by more than 67% from July 2021 to January 2022. As of August 2022, Bitcoin is estimated to account for 60% to 77% of total global crypto-asset electricity usage, and Ethereum is estimated to account for 20% to 39%.
“Electricity usage from digital assets is contributing to GHG emissions, additional pollution, noise, and other local impacts, depending on markets, policies, and local electricity sources,” the White House adds in the report.
New Standards to Reduce the Impact
In light of the alarming data, the White House suggests that “crypto-asset policy during the transition to clean energy should be focused on several objectives: reduce GHG emissions, avoid operations that will increase the cost of electricity to consumers, avoid operations that reduce the reliability of electric grids, and avoid negative impacts to equity, communities, and the local environment,” calling on federal agencies to work with states and local officials to develop standards for the industry’s impact on the environment.
“Should these measures prove ineffective at reducing impacts, the Administration should explore executive actions, and Congress might consider legislation, to limit or eliminate the use of high energy intensity consensus mechanisms for crypto-asset mining,” the report warn.