New York, NY
In September, three major research organizations published new reports about the cryptocurrency mining industry, adding to the growing body of work proving just how detrimental the opaque and little-regulated industry is to the climate, local communities, and public health.
These new papers all reach the same conclusion as the recent groundbreaking report from the White House Office of Science and Technology Policy (OSTP): cryptocurrency mining is incompatible with federal and local emissions reductions goals, impacts local communities negatively, and it cannot continue unabated.
Earthjustice and the Sierra Club released The Energy Bomb: How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now. The guidebook is a comprehensive report on the negative environmental impacts of cryptocurrency mining in the United States, including a mythbusting section that tackles the industry’s greenwashing talking points to justify its massive energy use.
Highlights from the Guidebook
- Proof-of-work cryptocurrency mining has grown explosively in the United States since 2020. Today, an estimated 38% of Bitcoin is mined in the U.S, resulting in nearly 30 million tons of excess CO2 emissions in the last year alone.
- From mid 2021-2022, Bitcoin consumed 36 billion kilowatt-hours of electricity — as much as all of the electricity consumed in Maine, New Hampshire, Vermont, and Rhode Island put together in that same time period.
- The massive energy consumption of cryptocurrency mining threatens to undermine decades of progress toward achieving climate goals and reducing local pollution. In addition, cryptocurrency mining practices raise costs and risks for utilities and their ratepayers, can stress electric grids, and flood communities with noise.
- The cryptocurrency mining industry already uses half the electricity of the entire global banking sector, and it will overtake the sector in two years if current trends continue. Meanwhile, the ratio of Bitcoin’s energy consumption to humans who actually have Bitcoin is extremely high.
- Rather than investing in long-term energy infrastructure that benefits the grid, the cryptocurrency mining industry seeks the fastest energy that can serve its needs, and looks for minimal regulation and oversight. In practice, that translates to mining cryptocurrency at coal and gas plants, straining the electric grid in Texas, and tapping into power grids that are often fossil-fuel heavy.
- Most mining facilities draw their power from the grid. That means electricity is generated by whatever existing energy is in place in the region. No grid anywhere in the U.S. is 100% renewable yet.
- Proponents also claim that mining is spurring new renewable development and stabilizing the grid. But clean energy allocated to cryptocurrency mining doesn’t actually do anything to decarbonize the grid, and there are few mining facilities that are building renewables to even power their own operations, let alone send to the grid.
- Cryptocurrency mining proponents claim that mining only uses “wasted” energy from solar or wind overproduction. But mining operations consume energy 24 hours a day, not just when there is excess solar or wind — meaning mining operations would fail to be profitable using only the hours when wasted energy is available.
Scientific Reports published Economic Estimation of Bitcoin Mining’s Climate Damages Demonstrates Closer Resemblance to Digital Crude than Digital Gold. The paper provides economic estimates of the energy-related climate damages of Bitcoin mining, finding that from 2016-2021:
- Per coin climate damages from Bitcoin were increasing, rather than decreasing as the industry grew
- During certain time periods, Bitcoin climate damages exceed the price of each coin created
- On average, each $1 in Bitcoin market value created was responsible for $0.35 in global climate damages, which as a share of market value is in the range between beef production and crude oil burned as gasoline.
According to the paper, “taken together, these results represent a set of sustainability red flags.”
University of Cambridge’s Judge Business School released A Deep Dive Into Bitcoin’s Environmental Impact. Key findings include:
- By mid-September 2022, approximately 199.65 million metric tons of CO2 were attributed to the Bitcoin network, and 92% of those emissions occurred since 2018.
- Coal is the largest single energy source for Bitcoin mining worldwide, accounting for 36.6% of it.
- Fossil fuels account for nearly two-thirds of Bitcoin mining’s total electricity mix. This finding deviates wildly from the industry’s likely incorrect estimate that 59.5% of mining comes from sustainable energy sources.
Proof-of-work cryptocurrency mining is an extremely energy intensive process that threatens the ability of governments across the globe to reduce our dependence on climate-warming fossil fuels. Mining requires thousands of machines whirring 24/7 to solve complex equations. The more machines that are running, the faster a coin is mined. Each one of these machines requires energy to run, plus more energy for cooling. Globally, Bitcoin mining consumes more energy each year than the entire country of Argentina. In the U.S. alone, Bitcoin mining produces an estimated 40 billion pounds of carbon emissions each year. Cryptocurrency mining facilities are major emitters of air pollutants. And when cryptocurrency miners rely on the public grid, they can stick everyday people with the bill. A 2021 study estimates “the power demands of cryptocurrency mining operations in upstate New York push up annual electric bills by about $165 million for small businesses and $79 million for individuals.”
Without action to limit cryptocurrency mining now, we will not meet the goals set forth by the Paris Agreement and Intergovernmental Panel on Climate Change to limit warming to 2 degrees Celsius. Cryptocurrency mining operations harm local communities now, including by increasing local pollution and impacting electricity rates and delivery. The guidebook describes several examples where cryptocurrency mining has increased local air, water, and noise pollution, increased electricity rates for everyday people, and increased climate pollution at a time when we should be doing everything in our power to reduce dependence on fossil fuels and mitigate the worst impacts of the climate crisis.
Earthjustice is involved in litigation and other efforts against climate change-accelerating cryptocurrency mining in New York, Kentucky, Pennsylvania, Texas, Indiana, Montana, and elsewhere. In May, Earthjustice submitted comments in partnership with advocates to the White House OSTP to inform its recent report. In New York, Earthjustice has been instrumental in efforts to put a moratorium on cryptocurrency mining at power plants that produce their own energy. The organization is also active in efforts and litigation against the Greenidge Generation gas plant in Dresden, NY, where the New York Department of Environmental Conservation denied the facility’s air permit.