Research indicates that prohibiting Bitcoin mining may exacerbate carbon emissions.

Researchers from the non-profit organization Exponential Science and University College London have indicated that prohibitions on Bitcoin mining may lead to unforeseen environmental repercussions, potentially raising carbon emissions by as much as 2.5 million tonnes each year.

In the study titled “The Unintended Carbon Consequences of Bitcoin Mining Bans: A Paradox in Environmental Policy,” the researchers analyzed how apprehensions regarding the environmental effects of Bitcoin mining have led various governments to contemplate or enact bans on cryptocurrency mining.

However, these well-intentioned measures may inadvertently result in the relocation of mining activities to areas with greater carbon emissions.

The research team, which includes Dr. Paolo Tasca, Juan Ignacio Ibáñez, Aayush Ladda, and Logan Alred, employed data from Nodiens to model the environmental implications of Bitcoin mining bans by evaluating total carbon emissions across different nations.

Environmental impact

The researchers highlighted that mining prohibitions in countries abundant in renewable energy — such as Canada, Paraguay, El Salvador, and Norway — could lead to an increase in emissions, thereby compromising these nations’ environmental goals.

For example, Canada, which heavily depends on nuclear and hydroelectric energy, might see a notable rise in carbon emissions of up to 2.5 million tonnes annually. Paraguay, El Salvador, and Norway would also experience heightened emissions due to similar restrictions.

Conversely, a ban in countries with carbon-heavy energy sources, such as Kazakhstan, China, and Malaysia, would likely result in lower emissions. Kazakhstan, which primarily utilizes fossil fuels, could witness a significant reduction in carbon emissions of up to 3.4 million tonnes if it implemented such measures.

The study also explored potential bans at the state level in the United States. It observed that Kentucky, Georgia, and Nebraska could see decreased emissions with a ban, while New York and Texas would likely experience increased emissions from comparable actions.

Unintended consequences

The research indicates that prohibitions on Bitcoin mining in low-emission countries could result in a considerable net increase in global carbon emissions as mining operations shift to areas with higher carbon footprints. This outcome contradicts the initial objectives of these policies.

To tackle these issues, the researchers recommend a more sophisticated regulatory framework regarding Bitcoin mining. They emphasize that not all Bitcoin mining is the same, and it is crucial to assess the energy sources utilized in mining operations prior to implementing regulatory measures.

Additionally, the paper urged policymakers to reassess the efficacy of outright Bitcoin mining bans as a strategy to lower global carbon emissions.

Instead, the paper suggested that authorities should promote the use of renewable energy for mining operations in high-carbon regions and offer incentives for relocating mining activities to low-carbon areas, which could more effectively align with the objective of reducing carbon emissions while fostering the growth of the crypto industry.

Margot Paez, a fellow at the Bitcoin Policy Institute, shares this perspective. She asserts that Bitcoin has the capacity to aid in the transition from the current economic system to one that is more in harmony with ecological principles, ultimately contributing to the mitigation of the most severe impacts of climate change.

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