Earthjustice and Sierra Club release comprehensive guide on the environmental impact of cryptomining

New York, NY

Today Earthjustice and the Sierra Club released a new handbook, The Energy Bomb: How Proof-of-Work Cryptocurrency Mining is Making the Climate Crisis Worse and Now Harming Communities. The Guide is a comprehensive account of the opaque and unregulated cryptocurrency mining industry and its negative impact on the climate, local communities and public health. It also features a myth-busting section that taps into the industry’s greenwashing talking points to justify its massive use of energy. The paper’s co-authors joined with advocates from directly impacted communities and New York Assemblywoman Anna Kelles — author of the nation’s first moratorium law on cryptocurrency mining — to introduce the guide and advocate for better regulation.

Read the guide here.

Watch the press conference here.

The White House Office of Science and Technology Policy released a groundbreaking report this month that confirms many of the paper’s findings: Proof-of-work cryptocurrency mining is inconsistent with federal and local emissions reduction targets, it cannot continue unabated.

Highlights from the travel guide

  • Proof-of-work cryptocurrency mining has exploded in the United States since 2020. Today, an estimated 38% of bitcoin is mined in the US, resulting in almost 30 million tons of excess CO2 emissions in the last year alone.

  • From mid-2021 to 2022, Bitcoin consumed 36 billion kilowatt-hours of electricity — as much as the combined electricity consumption of Maine, New Hampshire, Vermont, and Rhode Island over the same period.

  • The massive energy consumption of cryptocurrency mining threatens to undermine decades of progress in meeting climate goals and reducing local pollution. Additionally, cryptocurrency mining practices increase costs and risks for utilities and their tariff payers, can strain power grids, and inundate communities with noise.

  • The cryptocurrency mining industry already consumes half the power of the entire global banking sector and will overtake the sector in two years if current trends continue. Meanwhile, the ratio of bitcoin energy consumption to people actually owning bitcoin is extremely high.

  • Rather than investing in long-term energy infrastructure that benefits the power grid, the cryptocurrency mining industry seeks the fastest energy that can meet its needs and seeks minimal regulation and oversight. In practice, this means mining cryptocurrency at coal and gas-fired power plants, loading the Texas power grid, and tapping into power grids often fueled by fossil fuels.

  • Most mining facilities get their electricity from the grid. This means that electricity is generated from the energy available in the region. No grid in the US is 100% renewable yet.

  • Proponents also claim that mining is driving the development of new renewable energy and stabilizing the grid. But clean energy allocated to cryptocurrency mining doesn’t really help to decarbonize the grid, and there are few mining rigs building renewable energy to even power their own operations, let alone, to send them to the network.

  • Proponents of cryptocurrency mining claim that mining uses only “wasted” energy from overproduction of solar or wind energy. But mining operations use energy 24 hours a day, not just when there’s too much sun or wind – meaning mining operations wouldn’t be profitable using only the hours when wasted energy is available.

The handbook shies away from simply banning the practice of proof-of-work cryptocurrencies and provides policy recommendations for local and state officials, utility regulators, utilities, environmental regulators and grid operators to protect energy systems, communities and tariff payers.

“The cryptocurrency mining industry is nebulous and opaque, with very little regulation or reporting standards. This makes it difficult to track the full impact and get the full picture. We put this guide together because having the information we’ve gathered so far in one place is critical to understanding how damaging this industry can be to communities and the climate,” he said Mandy DeRoche, Associate Executive Director of Earthjustice’s Clean Energy Program.

“Last year, the US cryptocurrency mining industry alone generated three times more emissions than the country’s largest coal-fired power plant. It’s an industry with a track record of breathing new life into abandoned coal and gas-fired power plants and relying on the dirtiest energy sources. The industry’s blind growth threatens to erode decades of climate action,” he said Jeremy Fisher, Senior Strategy and Technical Advisor at the Sierra Club’s Environmental Rights Program. “But in an attempt to disguise its harmful and irresponsible environmental impact, the cryptocurrency mining industry has engaged in a relentless greenwashing campaign. By shedding light on the industry and debunking these myths, we hope this report will spur communities and regulators to investigate the true costs of cryptocurrency mining.”

“According to the United Nations, we must reduce our total global greenhouse gas emissions by 50% by 2030 to avoid the worst impacts of climate change. But proof-of-work cryptomining threatens our climate goals in New York, the country and the planet. The data collected shows that our overall energy use, our dependency on fossil fuels and therefore our overall greenhouse gas emissions are being misdirected,” he said Anna Kelles, member of the New York Assembly. “I instituted the crypto mining moratorium in New York to pause the practice of consolidated crypto mining at fossil fuel based power plants here to protect our natural environment and resources in this state, but we cannot be alone . All states and the federal government must follow our example. We must not allow this one industry to set back our collective progress.”

“In the Finger Lakes and across New York and across the country, outside speculators are exploiting local communities and depleting our natural resources just to make rich people richer. But our lakes, our climate, and our local economies are worth more than this fueling, bogus commodity masquerading as “currency” that the vast majority of Americans have absolutely no interest in. We need real regulation now to contain this dangerous industry.” said Yvonne Taylor, Vice President of Seneca Lake Guardian.

“In a state whose economy is centered on energy production, we need more transparency about how these operations are regulated, how many jobs will actually be created and, most importantly, what impact this will have on the host communities that have to deal with it noise, pollution and the impact on our resources,” he said Lane Boldman, director of the Kentucky Conservation Committee.

“Bitcoin and other proof-of-work crypto mining are inherently wasteful, and that waste has very real public health costs and environmental damage — particularly in the vulnerable communities near these operations. Worse, miners often use old, polluting coal plants to power their operations because we — the taxpayers — heavily subsidize them,” he said Rob Altenburg, senior director of energy and climate at PennFuture.

Earthjustice is involved in litigation and other efforts against cryptocurrency mining, which is accelerating climate change, in New York, Kentucky, Pennsylvania, Texas, Indiana, Montana and elsewhere. In May, Earthjustice, along with advocates, submitted comments to the White House OSTP to inform its latest report. In New York, Earthjustice has been instrumental in efforts to impose a moratorium on cryptocurrency mining at power plants that produce their own energy. The organization is also active in efforts and litigation against the Greenidge Generation gas plant in Dresden, NY, and its work resulted in the New York City Department of the Environment denying the plant an air permit.

BACKGROUND

Proof-of-work cryptocurrency mining is an extremely energy-intensive process that threatens the ability of governments around the world to reduce our reliance on climate-warming fossil fuels. Mining requires thousands of machines whirring around the clock to solve complex equations. The more machines are running, the faster a coin is mined. Each of these machines requires energy to operate and more energy to cool. Globally, bitcoin mining consumes more energy each year than the entire country of Argentina. In the US alone, bitcoin mining is estimated to generate an estimated £40 billion in carbon emissions each year. Cryptocurrency mining rigs are major emitters of air pollutants. And when cryptocurrency miners rely on the public grid, they can burden ordinary people with the bill. A 2021 study estimates that “the electricity needs of cryptocurrency mining operations in New York state add about $165 million to annual electric bills for small businesses and $79 million for individuals.”

Without action to limit cryptocurrency mining, we will not meet the goals of the Paris Agreement and the Intergovernmental Panel on Climate Change to limit warming to 2 degrees Celsius. Cryptocurrency mining operations are now harming local communities, including through increasing local pollution and impacting electricity prices and supply. The guide describes several examples where cryptocurrency mining has increased local air, water and noise pollution, electricity prices for everyday people and climate pollution at a time when we should be doing everything we can to reduce the To reduce and mitigate dependence on fossil fuels The worst impacts of the climate crisis.

Leave a Comment