Study reveals ban could increase carbon emissions
A new study by cryptocurrency research firm Exponential Science Research finds that bans on Bitcoin mining in the name of environmental protection could be counterproductive. The study noted that a blanket ban on cryptocurrency mining could lead to an increase in global carbon emissions as miners could move to areas highly dependent on fossil fuels, exacerbating climate change issues.
Research shows that the impact of mining bans is geographically and energy structurally heterogeneous, meaning the effects of the ban depend on where miners move and the local energy infrastructure. For example, if a mining ban were implemented in Kazakhstan, it would reduce the Bitcoin network’s global annual carbon emissions by 7.63%. Conversely, imposing restrictions in Paraguay could lead to a 4.32% increase in emissions.
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Source: Exponential Science Research The impact of the mining ban varies by geography and energy structure
Miner migration and the impact of energy sources
The environmental impact of Bitcoin mining also depends on the energy company’s source of energy. Bitcoin mining using a grid powered by fossil fuels such as coal will produce more carbon emissions than using hydroelectric power. As a result, global carbon emissions are likely to increase as miners migrate from countries using clean energy to countries that rely on fossil fuels.
The situation in the United States is particularly complex. A ban in places like Kentucky or Georgia could have a positive impact on carbon emissions, but measures in New York, Texas, Washington or California could increase the carbon footprint of the Bitcoin network. Canada is also a key case, with its extensive use of nuclear and hydroelectric power. If Canada banned Bitcoin mining, it could lead to an increase in network emissions of approximately 5.6%, or 2.5 million tons of carbon dioxide per year.
Source: Exponential Science Research The situation in the United States is more complicated for mining.
Policy implications in China and other regions
The study also paid attention to the situation in China. China banned cryptocurrency mining in 2021, but some miners have gone underground and continue to operate illegally. This underground digging activity has had different environmental impacts in different provinces: the Xinjiang ban led to a 6.9% reduction in global annual emissions, while the Sichuan ban could increase emissions by 3.8%, showing a significant impact on global carbon emissions. Opposite effect.
Source: Exponential Science Research China banned cryptocurrency mining in 2021, but some miners went underground and continued to operate illegally.
Meanwhile, other countries are also adjusting their cryptocurrency mining policies. The Canadian province of Manitoba recently extended a moratorium on applications for electric service from new crypto miners, which applies to applicants who have not yet signed infrastructure construction agreements. In Russia, President Vladimir Putin signed a series of laws on November 1 that provide a regulatory framework for cryptocurrency mining activities in the country. However, industry experts warn that these measures do not fully "legalize" cryptocurrency mining, but instead establish new controls and restrictions for the industry.
Experts call for scientific policies
The study highlights the importance of developing careful, science-based policies rather than adopting blanket bans.
"Well-intentioned policies may lead to unintended consequences, particularly redirecting mining activity to more carbon-intensive areas," the researchers noted.
Therefore, implementing a ban on digging in low-emitting countries could lead to a net increase in global carbon emissions, a phenomenon that exacerbates carbon leakage.
“Not all Bitcoin mining is the same, and different countries vary in the energy sources they use and their environmental impacts,” the research report reiterates. Emerging mining jurisdictions may significantly affect the environmental impact of the Bitcoin network. Therefore, legislators need to carefully consider the potential global impact of a mining ban to avoid exacerbating the global carbon emissions problem by causing miners to relocate to high-carbon emission areas.
Further reading
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