Democrats Set Their Sights On Crypto Companies Over Their Carbon Footprints

This past Monday, groups of Democrat legislators called for a probe into the mining activities of cryptocurrency companies and their total impact on climate change.

The process in which cryptocurrencies are “mined” involves computers running “proof of work” algorithms that rapidly solve complicated mathematical problems, which causes them to earn new tokens. As stated in the letter — which was signed by Rep. Rashida Tlaib (D-MI), Sen. Elizabeth Warren (D-MA), and a few other representatives — the amount of energy utilized to ‘create’ these coins is now comparable to the total annual energy consumption of countries such as Norway or Sweden, and may actually outpace the reductions in greenhouse gas emissions that stem from electric cars.

This letter calls for Jennifer Granholm, the Energy Secretary, and Michael Regan, the Administrator of the Environmental Protection Agency (EPA), to “require emissions and energy use reporting by cryptominers.”

“State and federal regulators currently know little about the scope of the problem. There is no national or state reporting requirement or compilation of the locations of cryptomining facilities in the United States, and no federal regulations specifically governing cryptomining,” expressed the legislators in their letter. “Consequently, policymakers and the public do not have a comprehensive source of information about where these operations are located, how much energy they consume, and what their sources of energy are — and without the energy use and source reporting, there is a subsequent lack of data regarding the associated air emissions of pollutants or carbon dioxide.”

The sending of the letter came in the wake of the cryptocurrencies — which is decentralized digital money that can be freely transferred across the digital wallets of various users —  rapidly dropping in price over the past few months. The exchange rate for one of the most popular of these currencies, Bitcoin, dropped from where it sat at roughly 48,400 back near the end of december to where it sits now at about $21,600 as of Monday. One of the major exchange platforms, Coinbase, has been forced to prepare itself to lay off over 18% of its staff, while the founders of cryptocurrency venture fund 3AC are currently nowhere to be found in the wake of their company defaulting on hundreds of millions of loans.

These legislators took time to speak with seven different cryptocurrency comapnies in the United States, which lead them to conclude that “cryptominers are large energy users that account for a significant — and rapidly growing — amount of carbon emissions.” By making use of the Clean Air Act, the letter calls for the agencies to require published consumption reports from all entities mining the carious currencies.

“This collected data would enable valuable public policy activities, including better monitoring of energy use and trends, better evidence basis for policy making, improved data for national mitigation analyses, better abilities for evaluating technology policies for the sector, and better modeling of national and regional grid loads and transitions,” claimed the legislators.

Warren has sounded the call to initiate a crackdown on the cryptocurrency sector over the purported lack of regulation across the market.

“I have become increasingly concerned about the dangers cryptocurrencies pose to investors, consumers, and the environment in the absence of sufficient regulation in the United States,” she expressed to Treasury Secretary Janet Yellen last year. “However, as the demand for cryptocurrencies continues to grow and these assets become more embedded in our financial system, the Council must determine whether these trends raise concerns beyond investor and consumer protection and extend to broader systemic vulnerabilities that could threaten financial stability.”

Leave a Comment

Recommended Articles