The Intergovernmental Panel on Climate Change (IPCC), an arm of the United Nations responsible for assessing the science related to climate change, released a new report Monday highlighting warnings about future climate risks.
The IPCC’s latest report is the third version in a series of reports that examine the state of climate change mitigation efforts. In the latest report, IPCC identified cryptocurrency among technologies that may require greater energy demands, recommending a 50% global emissions elimination by 2030 to reduce the environmental effects of climate change.
The report said that the energy requirements of cryptocurrencies are a growing concern and stated that considerable uncertainty exists surrounding the energy use of their underlying blockchain infrastructure. “While it is clear that the energy requirements of global Bitcoin mining have grown significantly since 2017, recent literature indicates a wide range of estimates for 2020 (47 TWh to 125 TWh) due to data gaps and differences in modelling approaches,” the report mentioned.
The IPCC also included the energy requirements for artificial intelligence (A.I.) alongside cryptocurrency and blockchain. However, the body mentioned that all technologies have the potential to enable emissions reductions and increase emissions depending on how they are governed. “Large improvements in information storage, processing and communication technologies, including artificial intelligence, will affect emissions. They can enhance energy-efficient control, reduce transaction cost for energy production and distribution, improve demand-side management […] and reduce the need for physical transport,” The IPCC stated.
Cryptocurrencies in the Crosshairs
The IPCC is not the only authorized body to have singled out cryptocurrency as a concern for carbon emissions.
Early this year, U.S. lawmakers began probing Bitcoin mining firms to disclose how much electricity they use for crypto mining, as the impact of cryptocurrency mining on energy is being felt across the world.
In January, eight U.S. senators, led by Senators Elizabeth Warren (D-MA), sent letters to six Bitcoin mining firms in the U.S., asking them to disclose how much electricity they use, where it comes from, and how they plan to grow.
The letters were sent amid an oversight hearing on crypto mining’s effect on energy by the House Energy & Commerce Committee.
In November last year, Erik Thedéen, the Vice-chairman of the European Securities and Markets Authority (ESMA), called for a bloc-wide ban on “proof of work” (PoW) crypto mining in Europe, stating that the industry’s energy usage was becoming a “national issue” in his native Sweden. “Bitcoin is now a national issue for Sweden because of the amount of renewable energy devoted to mining,” Thedéen said.
The E.U. regulator pointed out that crypto mining threatened targets to limit global warming to 1.5 degrees Celsius under the 2015 Paris Agreement.
Last year, data from the Bitcoin Energy Consumption Index from Digiconomist and the Cambridge Bitcoin Electricity Consumption Index showed that the two largest cryptocurrencies, Bitcoin and Ethereum, consume around twice as much electricity in one year as the whole of Sweden.
Image source: IPCC
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