Today, Earthjustice and the Sierra Club published a new guidebook, The Energy Bomb: How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now. The guidebook is a comprehensive report on the opaque and little-regulated cryptocurrency mining industry and its negative effects on the climate, local communities, and public health. It also provides a mythbusting section that tackles the industry’s greenwashing talking points to justify its massive energy use. The paper’s co-authors joined with advocates from directly impacted communities and New York Assembly Member Anna Kelles — author of the country’s first-ever cryptocurrency mining moratorium legislation — to present the guidebook and advocate for better regulation.
Read the guidebook: The Energy Bomb: How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now.
Watch the press conference.
The White House’s Office of Science and Technology Policy put out a groundbreaking report this month that confirms many of the findings of this paper: proof-of-work cryptocurrency mining is incompatible with federal and local emissions reductions goals, it cannot continue unabated.
Highlights from the Guidebook
- Proof-of-work cryptocurrency mining has grown explosively in the United States since 2020. Today, an estimated 38% of Bitcoin is mined in the US, resulting in nearly 30 million tons of excess CO2 emissions in the last year alone.
- From mid 2021-2022, Bitcoin consumed 36 billion kilowatt-hours of electricity — as much as all of the electricity consumed in Maine, New Hampshire, Vermont, and Rhode Island put together in that same time period.
- The massive energy consumption of cryptocurrency mining threatens to undermine decades of progress towards achieving climate goals and reducing local pollution. In addition, cryptocurrency mining practices raise costs and risks for utilities and their ratepayers, can stress electric grids, and flood communities with noise.
- The cryptocurrency mining industry already uses half the electricity of the entire global banking sector, and it will overtake the sector in two years if current trends continue. Meanwhile, the ratio of Bitcoin’s energy consumption to humans who actually have Bitcoin is extremely high.
- Rather than investing in long-term energy infrastructure that benefits the grid, the cryptocurrency mining industry seeks the fastest energy that can serve its needs, and looks for minimal regulation and oversight. In practice, that translates to mining cryptocurrency at coal and gas plants, straining the electric grid in Texas, and tapping into power grids that are often fossil-fuel heavy.
- Most mining facilities draw their power from the grid. That means electricity is generated by whatever existing energy is in place in the region. No grid anywhere in the US is 100% renewable yet.
- The proponent also claims that mining is spurring new renewable development and stabilizing the grid. But clean energy allocated to cryptocurrency mining doesn’t actually do anything to decarbonize the grid, and there are few mining facilities that are building renewables to even power their own operations, let alone send to the grid.
- Cryptocurrency mining proponents claim that mining only uses “wasted” energy from solar or wind overproduction. But mining operations consume energy 24 hours a day, not just when there is excess solar or wind — meaning mining operations would fail to be profitable using only the hours when wasted energy is available.
Shy of simply banning the practice of proof-of-work cryptocurrencies, the Guidebook makes policy recommendations for local and state officials, utility regulators, utilities, environmental regulators, and grid operators to protect energy systems, communities, and ratepayers.
“The cryptocurrency mining industry is nebulous and opaque, with very little regulation or reporting standards. That makes it difficult to track and get a complete picture of its full impact. We put together this guidebook because having the information collected to date in one place is crucial for understanding just how harmful this industry can be to communities and the climate,” said Mandy DeRoche, deputy managing attorney for Earthjustice’s Clean Energy Program.
“Last year, the cryptocurrency mining industry in the US alone generated three times more emissions than the nation’s largest coal plant. It’s an industry with a track record of kicking life into defunct coal and gas plants, and relying on the dirtiest sources of energy. The industry’s blind growth threatens to undermine decades of climate progress,” they said Jeremy Fisher, senior strategy and technical advisor with the Sierra Club’s Environmental Law Program. “But in an attempt to obfuscate its harmful and irresponsible environmental impact, the cryptocurrency mining industry has engaged in a relentless greenwashing campaign. By shining light on the industry and exposing these myths, we hope this report will spur communities and regulators to examine the true costs of cryptocurrency mining.”
“According to the United Nations, we must reduce our total global GHG (green house gas) emissions by 50% by 2030 to avoid the worst effects of climate change. But proof-of-work cryptomining is threatening our climate goals in New York, the country, and the planet. From the data collected it is increasing our total energy usage, our dependency on fossil fuels and thus our total greenhouse gas emissions sending us in the wrong direction,” said New York Assembly Member Anna Kelles. “I introduced the cryptomining moratorium in New York to put a pause on the practice of consolidated cryptomining in fossil-fuel based power plants here to protect our natural environment and resources in this state, but we can’t be alone. Every state and the federal government must follow our lead. We can’t let this one industry set our collective progress backward.”
“In the Finger Lakes and across New York and the country, outside speculators are taking advantage of local communities and exploiting our natural resources, just to make rich people richer. But our lakes, our climate, and our local economies are worth more than this tanking, fake commodity masking as a ‘currency’ that the vast majority of Americans have absolutely no stake in. We need real regulation to curb this dangerous industry now.” got Yvonne Taylor, vice president of Seneca Lake Guardian.
“In a state whose economy is centered around energy production, we need more transparency about how these operations are regulated, how many jobs are actually created, and most importantly, what the full impact will be to the host communities who will have to deal with the noise, pollution, and impact on our resources,” they said Lane Boldman, director, Kentucky Conservation Committee.
“Bitcoin and other proof-of-work cryptomining is wasteful by design, and this waste has very real costs in public health and environmental damage — particularly in the vulnerable communities near these operations. Worse yet, miners often use old, polluting coal plants to power their operations because we — the taxpayers — heavily subsidize them,” said Rob Altenburg, senior director for Energy & Climate at PennFuture.
Earthjustice is involved in litigation and other efforts against climate change-accelerating cryptocurrency mining in New York, Kentucky, Pennsylvania, Texas, Indiana, Montana, and elsewhere. In May, Earthjustice submitted comments in partnership with advocates to the White House Office of Science and Technology Policy (OSTP) to inform its recent report. In New York, Earthjustice has been instrumental in efforts to put 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 led to the New York Department of Environmental Conservation denying the facility’s air permit.
Proof-of-work cryptocurrency mining is an extremely energy intensive process that threatens the ability of governments across the globe to reduce our dependence on climate-warming fossil fuels. Mining requires thousands of machines whirring 24/7 to solve complex equations. The more machines that are running, the faster a coin is gone. Each one of these machines requires energy to run, plus more energy for cooling. Globally, Bitcoin mining consumes more energy each year than the entire country of Argentina. In the US alone, Bitcoin mining produces an estimated 40 billion pounds of carbon emissions each year. Cryptocurrency mining facilities are major emitters of air pollutants. And when cryptocurrency miners rely on the public grid, they can stick everyday people with the bill. A 2021 study estimates “the power demands of cryptocurrency mining operations in upstate New York push up annual electric bills by about $165 million for small businesses and $79 million for individuals.”
Without action to limit cryptocurrency mining now, we will not meet the goals set forth by the Paris Agreement and Intergovernmental Panel on Climate Change to limit warming to 2 degrees Celsius. Cryptocurrency mining operations harm local communities now, including by increasing local pollution and impacting electricity rates and delivery. The guidebook describes several examples where cryptocurrency mining has increased local air, water, and noise pollution, increased electricity rates for everyday people, and increased climate pollution at a time when we should be doing everything in our power to reduce dependence on fossil fuels and mitigate the worst impacts of the climate crisis.