Environmental Tolls of Bitcoin Equal to Beef Production, Crude Oil: Study – The Hill
The story at a glance
- Online cryptocurrencies can use a huge amount of energy.
- To better estimate the environmental impacts of Bitcoin mining, the researchers assessed the value of the “social cost of carbon”.
- Damages from Bitcoin’s carbon dioxide emissions are similar to those inflicted by the beef industry and the burning of crude oil.
New research puts the climate damage of Bitcoin on par with pollution from the beef production industry and crude oil burned as gasoline, suggesting that the cryptocurrency could exacerbate climate change if the status quo continues.
The findings, published in Scientific Reports, include estimates of the energy-related climate damage from mining Bitcoin, a popular cryptocurrency first created in 2009.
Using a calculation known as the social cost of carbon, researchers found that between 2016 and 2021, every $1 in Bitcoin market value created was responsible for $0.35 in global climate damage, falling between that measured for beef production ($0.33 ) and crude oil that was burned as gasoline ($0.41).
They also found that as the industry matured, climate damage per coin increased rather than decreased, and at certain points Bitcoin’s climate damage exceeded the price of each coin created.
The $0.35 in damages created by Bitcoin is also higher than both wind and solar power, but lower than electricity generated from coal.
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“Taken together, these results represent a set of red flags for sustainability,” the authors wrote. “While proponents have offered Bitcoin as representing ‘digital gold’, from a climate damage perspective it functions more like ‘digital crude’.”
In 2020 alone, Bitcoin mining used more electricity than the entire country of Austria or Portugal.
Compared to 2016 rates, a Bitcoin mined in 2021 released 126 times the carbon dioxide equivalent on average into the atmosphere, increasing from 0.9 to 113 tons per coin.
In addition, “each Bitcoin created in 2021 resulted in an average of $11,314 in climate damage, with total global damage across all coins mined in 2021 exceeding $3.7 billion,” the authors wrote. Total global Bitcoin climate damage was estimated to reach $12 billion between 2016 and 2021.
The social costs of carbon account for harmful factors resulting from the emission of 1 extra tonne of carbon dioxide into the atmosphere. These can include losses in agricultural and labor productivity and devastation caused by rising sea levels.
Previous research has estimated that the majority of electricity used to mine cryptocurrencies such as Bitcoin comes from fossil fuels, while an average of 39 percent comes from renewable energy sources.
In the analysis, the researchers used a social cost of carbon measured at $100 per ton to determine their estimates.
However, varying totals for this cost have been proposed, and the current US government value stands at $51 per tonne in 2020 dollars.
When researchers tested several social costs of carbon values in their models, climate damage from Bitcoin mining still increased significantly from 2016 to 2021, and had a continuous upward trajectory.
Additional models showed increased use of renewable sources to generate electricity led to lower associated climate damage for each coin. But even in a high-renewable scenario, “climate damage still averages 23% of the coin’s price (2016-2021), despite miners using only 37% of electricity from fossil fuels,” the authors warned.
The study only measured environmental damage and did not consider any health-related costs associated with Bitcoin, meaning that the sustainability evaluations may be worse than reported.
