Following a new White House report on the climate implications of energy-intensive cryptocurrency mining, Cornell Engineering research suggests that providing green policy incentives for carbon capture and renewable energy should help these mining operations reduce their carbon footprint.
Cornell’s study, “Mining Bitcoins with Carbon Capture and Renewable Energy for Carbon Neutrality in All U.S. States,” was published Sept. 14 in Energy & Environmental Science.
The carbon impact of cryptocurrency is increasingly being scrutinized and was examined in a White House report, “Climate and Energy Implications of Crypto-Assets in the United States,” released Sept. 8 by the White House Office of Science and Technology Policy. This report is the result of President Joe Biden’s Executive Order 14067 (March 2022) – “Ensure Responsible Development of Digital Assets”.
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“Bitcoin Mining’s energy thirst for energy and the problematic carbon emissions associated with it have raised concerns worldwide,” said lead author Fengqi You, Roxanne E. and Michael J. Zak, Professor of Engineering. Energy Systems.
“Whether we like it or not, there is a market. The crypto is here,” said You, senior fellow at the Cornell Atkinson Center for Sustainability. “As the cryptocurrency market grows, how can we better use science to inform energy and climate policy? How can we encourage industry to adopt environmental, social and governance management and to manage mining in a more sustainable way? This is the key.
Validating crypto asset transactions – done through consensus mechanisms such as proof of work, used by Bitcoin and Ethereum blockchains – requires huge amounts of electricity. Total global electricity consumption for cryptocurrency mining assets is between 120 billion and 240 billion kilowatt-hours per year — a range greater than the total annual electricity consumption of major countries, such as Australia and the United States, according to the White House report.
The Cornell study shows that states with a high share of renewable energy in the grid and lower electricity prices can reduce the environmental damage caused by cryptocurrency.
In the United States, if federal and state policies balance economic development, strengthen environmental protection, and provide incentives for direct carbon capture from the air and environmentally responsible mining, cryptocurrency will become more sustainable.
“Cryptocurrency mining is like mining precious metals,” he said. “The deeper you go underground, the harder it is to mine. For cryptocurrency it now takes longer to validate than before.
In a techno-economic environmental analysis in the document, the Cornell Group surveyed all 50 states for the viability of cryptocurrency mining operations. Of the states with crypto mining operations, Vermont, Maine, Washington, Idaho and New Hampshire emitted the least carbon dioxide, while Delaware, West Virginia, Rhode Island and Kentucky produced the most.
Economically, Hawaii, Rhode Island, Alaska, Connecticut, West Virginia and Kentucky were the worst performers, while Washington was the most profitable state, followed by Vermont (with almost all green energy) and New York (with many hydroelectric power plants) and is on the way to complete green energy).
“The study finds that states with lower electricity prices generally have higher renewable energy penetration into the power grid,” You said. “If you run a cryptocurrency mining operation and choose a location with a lower electricity price, chances are it will use cleaner electricity to mine bitcoin.
“Green technology is coming,” he said. “We are developing renewable energy systems to support the sustainable development of this industry, boost the economy and support climate action.”
In addition to U, first author is Haider Niaz, a visiting professor in Cornell’s Process-Energy-Environmental Systems Engineering (PEESE) lab. The National Science Foundation helped fund this research.