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The Intergovernmental Panel on Climate Change (IPCC), the United Nations branch that evaluates the science related to climate change, said that cryptocurrencies are among a number of technologies that may require greater energy consumption.
IPCC report on CO2 emissions from cryptocurrencies
According to a report published on April 4, 2022, the IPCC said the cryptocurrency has the potential to become the "main source of carbon dioxide emissions globally" as it is part of the infrastructure around blockchain-related data centers and information technology systems.
The group said estimated CO2 emissions between 2010 and 2019 showed that only a 50% probability of limiting the average rise in The Earth's temperature by 1.5°C, based on the remaining carbon budget from 2020. Most experts agree that the impacts could include rising sea levels, rising extreme weather, posing challenges for populations residing near the coast, and crop production.
However, the report also points out that there is a significant uncertainty that exists around the energy use of the underlying blockchain infrastructure because "although it is clear that the energy demand of Bitcoin Mining globally has increased significantly since 2017, but recent documents point to a series of estimates for 2020 (47 TWh to 125 TWh) due to data gaps and differences in model approach." In fact, CoinShares reported in January that the Bitcoin (BTC) mining network accounts for 0.08% of global carbon dioxide production – 49,360 megatons – by 2021.
Solutions to reduce cryptocurrency emissions
The Intergovernmental Panel on Climate Change also made energy requirements for artificial intelligence along with cryptocurrencies and blockchain in the report. However, the IPCC also noted that all technologies have the potential to enable reductions in emissions as well as increase emissions based on how they are managed by strengthening energy efficiency controls, reducing transaction costs for energy production and distribution, improve management from the demand side and reduce the need for physical transportation.
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Many regulators, lawmakers, and even those working in the entertainment sector have implemented goals on cryptocurrencies and blockchain as the effects of climate change become clearer globally and the need to reduce emissions is on the day. more and more.
"Major improvements in information storage, processing and communication technology, including artificial intelligence, will affect emissions. They can enhance energy efficiency control, reduce transaction costs for energy production and distribution, improve management from the demand […] side, and reduce the need for physical transportation."
The report is the third and latest by the IPCC in its bid to recommend halving global emissions by 2030 to reduce the environmental impact of climate change. Most experts agree that the impacts could include rising sea levels, rising extreme weather, posing challenges for populations residing near the coast, and crop production.
"In the scenarios we have assessed, limiting warming to around 1.5°C (2.7°F) requires global greenhouse gas emissions to reach their highest levels by 2025 and by 43% by 2030; At the same time, methane will also need to be reduced by about a third," the IPCC said. "Even if we do this, it is almost inevitable that we will temporarily exceed this temperature threshold but could return below that threshold by the end of the century."
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