Oversight of cryptocurrency — particularly its environmental impacts is long overdue
What happens when smoke and mirrors burn the planet? While the epic collapse of overhyped digital currencies and exchanges makes front page news, the environmental damage from cryptocurrency mining is hiding in plain sight. Especially for energy-guzzling “proof of work” cryptocurrencies like Bitcoin.
Any claims that Bitcoin is environmentally friendly are just as flimsy as the industry’s brash statements about the stability of cryptocurrencies and crypto exchanges. As the U.S. and the world look to slow the effects of climate change, it makes no sense to continue ignoring Bitcoin’s skyrocketing energy demands.
The largest cryptocurrency by market share, Bitcoin requires ever-increasing amounts of electricity to power its mining and validation operations, which in turn leads to more greenhouse gas emissions. The White House Office of Science and Technology Policy found crypto assets already represent up to 1.7 percent of U.S. electricity use, comparable to what powers all home computers or residential lighting.?Left unchecked, this demand will grow exponentially. Bitcoin now uses the equivalent of roughly half the global banking sector’s electricity use and is on track to overtake the industry’s usage within two years.
In November, I attended the COP27 global climate change summit in Egypt, where world leaders grappled with the challenge of limiting global warming to no more than 1.5 degrees Celsius. To meet that goal, more countries must join the U.S. in making specific pledges to address the climate crisis. To meet our commitments, the U.S. must lead across every industry and every sector of our economy. There is no special carve out for Bitcoin.
Wasteful by design, “proof of work” digital currencies rely on hugely energy-intensive calculations that strain electrical grids and burn through computers, creating tons of electronic waste. Cryptomining facilities not only undermine our efforts to fight the climate crisis, but can also create air, waste, and other pollution for nearby communities. Granting this industry impunity to inflict such environment harm runs counter to numerous federal policies, including accelerating energy efficiency, tackling the climate crisis, and reducing e-waste.
It is past time for serious government oversight and regulation of the cryptocurrency industry.
There is nothing radical or unusual about setting energy efficiency and performance standards or other establishing regulations to safeguard natural resources and public health. We do it for everything from passenger vehicles to refrigerators, but not crypto.
That’s why I have led the charge with Senator Elizabeth Warren to push for oversight into cryptocurrency’s environmental and energy impacts, particularly on communities near crypto mining operations. We’ve gathered a coalition of congressional colleagues to call on EPA Administrator Michael Regan to evaluate these facilities’ compliance with the Clean Air Act and Clean Water Act, sent letters to OSTP, EPA, and DOE to share our findings on cryptomining’s environmental impacts, and worked to uncover exactly how much crypto is impacting energy consumption, emissions, and costs for Texans. And this week, Senator Ed Markey and I teamed up to introduce The Crypto-Asset Environmental Transparency Act to require cryptomining facilities to report their carbon dioxide emissions under the Clean Air Act, as well as require a detailed interagency study on crypto’s environmental impacts – finally pulling the curtain back on this industry.
The implosion of so many overhyped crypto scams is a cautionary tale for investors, consumers, and ponderous would-be regulators. We cannot take the same wait and see approach to when it comes to the climate and environmental impacts of cryptomining schemes like Bitcoin. The time for transparency, oversight, and accountability is now.
By: Jared Huffman
Source: The Hill