Following the United Nation’s Intergovernmental Panel on Climate Change sounding the alarm on cryptomining companies’ soaring energy use, Senator Edward J. Markey (D-Mass.) and Representative Jared Huffman (CA-02) introduced the Crypto-Asset Environmental Transparency Act.
The legislation would require the Environmental Protection Agency (EPA) to conduct a comprehensive impact study of U.S. cryptomining activity and require the reporting of greenhouse gas (GHG) emissions from such operations that consume more than 5 megawatts of power.
In the United States, Bitcoin crypto-asset mining facilities use up to 1.4% of domestic electricity—the same as the electricity needed to light every home in the country, producing as much GHG emissions as seven million gasoline-powered cars. Senator Jeff Merkley (D-Ore.) is a cosponsor.
“Big-money cryptomining companies are undermining decades of progress in our fight against climate change by putting profits over the promise of our clean energy future – jeopardizing the reliability and safety of our grid in the process and making it all the more likely for utilities to raise energy prices on working families,” said Markey. “Ensuring cryptomining companies report their greenhouse gas emissions is a necessary step toward holding them accountable and protecting communities across the country that rely on the grid to heat their homes, cook their food, and go about their daily lives.”
“Cryptomining facilities not only undermine our efforts to fight the climate crisis, but can also create pollution for nearby communities. Granting this industry impunity to inflict such environmental harm runs counter to numerous federal policies, and we need to understand the full harm this industry presents,” said Huffman. “My bill with Senator Markey will require cryptomining facilities to report their carbon dioxide emissions, as well as a detailed interagency study on crypto’s environmental impacts – finally pulling the curtain back on this industry. The time for transparency, oversight, and accountability is now.”
“Crypto-asset mining consumes massive amounts of electricity, most of which is generated by burning fossil fuels,” said Merkley. “This has an environmental impact on climate chaos equivalent to putting 30 million gas-burning cars on the road! And a lot of that fossil electricity is generated at power plants that have a disproportionate impact on disadvantaged and frontline communities, making bad environmental justice issues worse. In addition, they create massive amounts of electronic waste, strain on fragile electric grids, and higher electricity prices for everyone. This bill is an important step to understanding the full environmental impacts of these operations, as well as holding crypto mining operations accountable for the damage they cause.”
The significant environmental impacts of cryptomining stem from the use of a highly energy-intensive approach to creating crypto-assets and verifying blockchain transactions, called “proof-of-work.” This method, which is used by the Bitcoin blockchain, uses specialized computers to solve puzzles, or “cryptographic equations,” as a way to award crypto-assets to miners.
Cryptomining companies can often have hundreds or thousands of computers drawing electricity to solve these equations.
Current estimates show that Bitcoin uses more electricity than countries such as Belgium and Finland. One blockchain, Ethereum, decreased its energy consumption by 99.9% when it stopped using the proof-of-work method.
“While I have been critical of cryptocurrency in general, because it makes consumers vulnerable to fraud, I am acutely concerned about the danger of wasting energy while we struggle to convince powerful politicians to transition to a clean energy economy,” said Lisa McCormick, the progressive New Jersey activist who earned 38 percent of the 2018 Democratic primary vote. “I applaud Sen. Ed Markey and Rep. Jared Huffman for introducing legislation to require more reporting and analysis of the climate and energy impacts of cryptocurrency mining, and to set mining energy efficiency standards.”
The Crypto-Asset Environmental Transparency Act is endorsed by the Sierra Club, Earthjustice, Environmental Working Group, and Seneca Lake Guardian.
“In our organization’s efforts to retire coal and gas plants that threaten our planet’s climate, we have witnessed a disturbing trend of large-scale crypto-asset operations providing an economic incentive to keep burning fossil fuels at power plants that would otherwise retire,” said Patrick Drupp, deputy legislative director at the Sierra Club.
“Despite the fact that proof-of-work crypto-asset mining now uses as much electricity globally as Argentina or Australia, and that best estimates are that more than a third of this mining is located in the United States, it is difficult or impossible to know where mining is located, how much electricity it is using and where that electricity comes from, and what the local and global effects of those mining operations are,” said Drupp. “We’re pleased to see Senator Markey take initiative to address this glaring lack of transparency, and hope this bill will shine light upon the threat crypto-asset proof-of-work mining poses to our shared climate and environmental justice goals.”
“Energy-intensive crypto-asset mining is a threat to our ability to curb the climate crisis, and strong federal regulations must address it,” said Mandy DeRoche, clean energy attorney, Earthjustice. “The Crypto-Asset Environmental Transparency Act will help us gain a better understanding of crypto’s environmental impacts in the United States to better inform our policy solutions. We thank Senator Markey for his efforts to ensure that this largely unregulated industry is operating within compliance of our nation’s laws and climate commitments.”
“In New York, we just successfully won a first-in-the-nation moratorium on fossil fuel-powered cryptomining. And earlier this year, we won our campaign to get the air permit denied for Greenidge Generation, a massive Bitcoin mine wreaking havoc on Seneca Lake, our local economy, and the climate. But the cryptomining industry is growing rapidly, threatening communities across the country,” said Yvonne Taylor, vice president, Seneca Lake Guardian. “This can’t be a town-by-town or state-by-state fight. We need federal action on climate-killing cryptomining, and Senator Markey’s legislation is a great start.”
“Digital assets that rely on proof of work are wasteful by design,” said Scott Faber, senior vice president for government affairs at the Environmental Working Group. “The incentives baked into digital assets like bitcoin demand more and more electricity – not less – at a time when all of us need to use electricity more efficiently. EWG applauds Senator Markey for making the climate and energy impacts of cryptocurrency mining a priority.”