- Bitcoin mining and AI data centers contributed to 1% of global carbon emissions due to their electricity use.
- Without changes, Bitcoin mining could account for 0.7% of global carbon emissions by 2027, warns IMF.
The IMF has outlined concerns regarding the environmental impact of cryptocurrency mining and data centers, projecting significant carbon emissions from these sectors by 2027. Specifically, cryptocurrency mining alone is expected to contribute 0.7 percent of global carbon emissions.ย
When data centers are also considered, the combined emissions are anticipated to rise to 450 million tons, which would account for 1.2 percent of worldwide emissions.
If air pollution and its health impacts are also considered, this rate would increase to $0.089 per kilowatt hour. Such an increase would elevate the average electricity cost for miners by 85 percent, potentially generating $5.2 billion in global government revenue annually while reducing emissions by an amount equivalent to those of Belgium.
Crypto mining and data centers are now responsible for 2 percent of global electricity consumption and almost 1 percent of global emissions, and their footprint continues to grow. – Excerpt from the report
Data centers, which often operate in locations with access to greener energy, would face a slightly lower tax rate of $0.032 per kilowatt hour, or $0.052 when including air pollution considerations. This tax could bring in about $18 billion annually.ย
According to a recent blog post by the IMF, these sectors accounted for 1% of global carbon emissions due to their electrical usage.
In 2022, Bitcoin mining and AI data centers were responsible for 2% of the world’s electrical energy consumption. Projections by the International Energy Agency (IEA) indicate that this figure could rise to 3.5% in the next three years, matching the current electricity demand of Japan, which ranks fifth globally in electricity usage.
The IMF warns that without intervention, the carbon emissions from Bitcoin and cryptocurrency mining could reach 0.7% of the global total by 2027. To combat this, the IMF recommends an 85% increase in electricity tariffs for these sectors.ย
Critics of Bitcoin have long argued that its network consumes excessive electricity, which is integral to maintaining its security. However, recent studies present a different view.
A recent @IMFNews paper mistakenly uses- among other errors – energy/transactions & discredited @DigiEconomist figures to assess #Bitcoin's energy use. Our industry leading BEEST model shows emissions per dollar of capitalisation are historically divergent despite flat emissions. pic.twitter.com/27bI2AL5xQ
— da-ri (@dari_org) August 17, 2024
Research by ETHNews, examining ten detailed reports from the last two years, found that nine showed positive environmental externalities from Bitcoin mining. The lone report indicating negative effects relied on data that was three years old.
Despite #Bitcoin's price and hash rate growth over 4 years, its network emissions have remained relatively static. This suggests improving energy efficiency in Bitcoin mining, countering the narrative of ever-increasing environmental impact. pic.twitter.com/E9d9kAGxK5
— da-ri (@dari_org) August 12, 2024
The IMF’s proposal seeks to align the energy consumption practices of Bitcoin miners and AI data centers with global carbon emission goals, suggesting drastic measures to ensure environmental sustainability in the face of rapid technological advancements.
