Crypto Mining: US Seeks Comments on Good, Bad for Climate
Perhaps as a way to forestall a repeat of what happened in China, a U.S. agency has called for public opinion on the impacts of digital assets mining activities. The Office of Science and Technology Policy (OSTP), put out a Request for Information (RFI) on the Energy and Climate Implications of Digital Assets seeking comments from stakeholders as it examines digital assets’ potential to impede or advance efforts to tackle climate change and the transition to a clean and reliable electricity grid.
China’s crypto mining industry crippled last year following a government clampdown on related activities. On its part, the OSTP wants to understand ways to reduce energy use associated with digital assets or any benefits and opportunities they may offer for natural assets or emissions accounting as well as their implications for U.S. policy on electricity grid reliability, greenhouse gas intensity among others.
Digital assets, including cryptocurrencies, for their use of decentralized consensus mechanisms such as “proof of work” (PoW) based systems, are estimated to use more electricity each year than many individual countries in the world thus presenting a key environmental challenge, the agency argues on the one hand. On the other, it says they might provide new opportunities for carbon accounting and verification thus increasing trust and creating a novel way to address climate change.
“These comments will inform a report to the President on the climate impacts of digital assets,” the OSTP states in the RFI.
One of the reported reasons behind China’s exit from the cryptocurrency mining space is to reduce the carbon footprint left behind by the industry due to the PoW method being employed – though a new peer-reviewed study published in the energy research journal Joule says the CO2 emitted into the environment since China left is even worse. China set a target in 2020 to peak CO2 emissions by 2030 and to achieve carbon neutrality by 2060, a goal that was reportedly threatened crypto mining hence the ban as a policy intervention to prevent a rise in energy consumption and higher emission.
In another related development, the European Union parliament this month voted and rejected a proposal – Markets in Crypto Assets (MiCA) directive – that could have limited activities related to PoW crypto assets within its region in a move that is diametrically opposed to China’s. Russia made a similar remark on the need to prohibit digital assets mining activities but has yet to make any official move in this regard.
Since the ban in China, the majority of the world’s crypto mining activities have now moved to the US which instantly became the top destination for Bitcoin miners. one mining executive described the move to be China’s “trillion-dollar present” to the U.S.
The public has until May 9, 2022, to submit comments electronically on the RFI which came to light following the March 9 Executive Order signed by President Joe Biden for a whole-of-government strategy on digital assets.