Here’s everything you need to know about the Crypto Climate Accord — the push to make cryptocurrencies 100% green
- The non-profit led Crypto Climate Accord (CCA) seeks to eliminate carbon emissions from the crypto industry by 2030.
- Over 45 companies and individuals have joined the accord so far.
- Countries and large businesses have cited crypto’s energy needs as a major concern in bringing cryptocurrencies into the mainstream.
The CCA, announced in April this year, aims to limit the pages of history that will talk about the harmful environmental impact of cryptocurrencies. Led by the private sector players, the consortium wants to transition all blockchains to renewable energy by 2030 if not sooner.
And, by 2040, it wants the crypto industry to reach ‘net zero’ emissions — or carbon neutral. This means that greenhouse gases still going into the atmosphere will be balanced out with technology that removes those gases as well.
|Cryptocurrency||Annualised total carbon footprint||Compared to annual carbon footprint of the countries|
|Bitcoin||62.94 million tons of carbon dioxide||Serbia and Montenegro|
|Ethereum||25.32 million of carbon dioxide||Bosnia and Herzegovina|
If achieved, these moon-shot goals could solve a very real problem that may inspire other industries to put their foot to the pedal as well.
“The Accord, inspired by the Paris Climate Agreement, is a private sector-led initiative for the entire crypto community focused on decarbonizing the cryptocurrency industry in record time.”
What is the Crypto Climate Accord?
Inspired by the Paris Agreement of 2015, the CCA aims to decarbonise the crypto industry.
The initiative is led by three non-profit companies — the Rocky Mountain Institute, the Energy Web Foundation, and the Alliance for Innovative Regulation. The first two are non-profits focused on sustainability and transition to low-carbon footprints, while the Alliance for Innovative Regulation is an international advocacy group that speaks for the implementation of fair financial systems.
Why do we need the CCA?
Climate concerns haven’t just been cited by countries, they have also been cited by crypto enthusiasts and billionaires who want to fund the industry. Tesla’s Elon Musk, for instance, has flip flopped on his company’s plans to deal in crypto owing to climate change concerns.
He recently joined hands with Twitter’s Jack Dorsey to sponsor a report which wanted to show how Bitcoin can be part of renewable energy projects.
On the other hand, countries like China have cited environmental concerns as one of the chief reasons for their crackdown on the industry. A project by the Cambridge University reported that Bitcoin mining alone can consume about 112.57 terawatt-hours of energy per year, more than the total power requirement of some countries.
Even countries like El Salvador, which became the first nation state to legalise Bitcoin earlier this month, has said it’s looking to find clean energy sources for Bitcoin mining within its borders — with volcanoes.
What could go wrong?
While the CCA will definitely be a boon for the crypto industry, critics wonder whether mining for digital tokes would be the best use of renewable energy. At the end of the day, the same energy could be used to power homes, schools and hospitals.
There’s also a risk. Right now, Bitcoin’s hash rate is dropping and it is expected that ‘mining difficulty’ will get easier resulting in lower energy consumption. However, if cryptocurrencies see a boom due the use of renewables and more people invest in mining, the underlying difficulty will increase again.
An increase would mean more energy consumption. And, that would lead everyone back to square one — using fossil fuels to meet the burgeoning demand.
The crypto industry has no choice but to support the CCA
No one who is remotely engaged with the technology industry can afford to ignore climate change today. According to research published in scientific journal Science this month, data centers accounted for 1% of the world’s electricity consumption last year, and it more than quintupled between 2010 and 2018. Crypto mines are, in essence, single-minded data centers.
“We recognise that crypto does use a lot of energy, so let’s make it 100% green,” Jesse Morris, chief commercial officer at Energy Web, told Al Jazeera. To that end, Energy Web has launched an open-source software solution called Green Hashrate that will track and verify green Bitcoin mining.
But, non-profits aren’t the only ones who recognise the CCA’s benefit, and need. For instance, UK-based global crypto mining firm Argo Blockchain as well as crypto and blockchain company DMG Solutions announced their partnership with the CCA last month. Zumo, a company that makes B2B products for crypto firms has also signed up for the accords.
“I’m proud to support the Crypto Climate Accord and to collaborate with other like-minded players that believe this technology can lead to a renewable energy revolution through collective action,” Meltem Demirors, CSO of digital asset investing firm CoinShares, told NSR Energy earlier.
According to the CCA’s website, over 45 companies and individuals from the crypto and related industries have joined the accord as supporters. It is also supported by the United Nations Framework Convention on Climate Change (UNFCCC).
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