IPCC Recognizes Cryptocurrencies as Carbon Emission Factor
- A recent report mentions mention cryptocurrency networks as a carbon emissions risk.
- The demand for blockchain technology has allowed institutions to overlook several other aspects.
- However, with governments and institutions coming together, a change could be expected.
A recent report released on Monday by the Intergovernmental Panel on Climate Change (IPCC) contained dire warnings about future climate risks.
Environment Risks Pertain
IPCC is an intergovernmental panel within the United Nations that recently published a series of reports examining the state of climate change mitigation efforts. The committee said in a statement,
“Without immediate and deep emissions reductions across all sectors, limiting global warming to 1.5°C is beyond reach is needed.”
The report includes over 2,000-page with a mention of cryptocurrency networks as a carbon emissions risk. It further states,
“Large improvements in information storage, processing, and communications technologies, including artificial intelligence, will affect emissions. They can enhance energy-efficient control, reduce transaction cost for energy production and distribution, improve demand-side management…and reduce the need for physical transport.”
The report highlights that data centers and related IT systems, including blockchain, are electricity-intensive and will raise energy demand.
Additionally, cryptocurrencies could be a global source of carbon dioxide if electricity production is not decarbonized.
Governments and Institutions Coming Together
The IPCC report notes that governments play a crucial role in determining whether technology reduces or increases emissions. The report’s author suggests that the challenge will be to ‘enhance the synergies and minimize the trade-offs and rebounds, including taking account of ethical and distributional dimensions.’
However, the report states that ‘digitalization, automation, and artificial intelligence, are general-purpose technologies’ and may lead to a plethora of new products and applications that are likely to be efficient but may also lead to undesirable changes or absolute increases in demand for products.
The report also notes,
“The energy requirements for cryptocurrencies is also a growing concern, although considerable uncertainty exists surrounding the energy use of their underlying blockchain infrastructure.”
However, of late, combined efforts from governments worldwide and institutions to curb energy consumption have led to actions in the right direction.
Notably, environmentalists have criticized bitcoin mining due to the large amounts of power it consumes. However, initiatives toward greener BTC mining have surfaced of late.