{"id":364709,"date":"2021-11-09T18:39:00","date_gmt":"2021-11-09T15:39:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/cryptos-climate-impact-are-carbon-offsets-good-enough\/"},"modified":"2021-11-09T18:39:00","modified_gmt":"2021-11-09T15:39:00","slug":"cryptos-climate-impact-are-carbon-offsets-good-enough","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/cryptos-climate-impact-are-carbon-offsets-good-enough\/","title":{"rendered":"# Crypto\u2019s climate impact: Are carbon offsets good enough?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a23d47e3662b\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a23d47e3662b\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/cryptos-climate-impact-are-carbon-offsets-good-enough\/#Are_carbon_offsets_greenwashed\" >Are carbon offsets greenwashed?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/cryptos-climate-impact-are-carbon-offsets-good-enough\/#ESG_crypto_assets\" >ESG crypto assets<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/cryptos-climate-impact-are-carbon-offsets-good-enough\/#Cryptos_role_in_the_climate_crisis\" >Crypto\u2019s role in the climate crisis<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># Crypto\u2019s climate impact: Are carbon offsets good enough? <\/strong>&#8221;<br \/>\n<img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMTEvZGYwMDk5ZGQtZGRiNi00ZmIxLTk0MmYtMzExY2EyZjFlOWEyLmpwZw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-128018ef>As global leaders discuss what needs to be done to address the concerns surrounding climate change at the COP26 summit in Glasgow, Scotland, businesses throughout the world are looking to achieve carbon neutrality. Environmental impact has been a hot topic in the crypto sector, with renaming it as being a top priority.<\/p>\n<p>Earlier this year, electric car maker Tesla started accepting Bitcoin (BTC) payments and invested $1.5 billion in the cryptocurrency, only to drop BTC payments a few months later over concerns surrounding the \u201crapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal.\u201d<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">Tesla &amp; Bitcoin <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/t.co\/YSswJmVZhP\">pic.twitter.com\/YSswJmVZhP<\/a><\/p>\n<p>\u2014 Elon Musk (@elonmusk) <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/elonmusk\/status\/1392602041025843203?ref_src=twsrc%5Etfw\">May 12, 2021<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><br \/>\nSince then, efforts for the crypto space to become environmentally friendly have grown, partly taking into account Tesla CEO Elon Musk\u2019s statement that the electric car manufacturer\u00a0would take BTC payments when there\u2019s a \u201cconfirmation of reasonable (~50%) clean energy usage by miners with positive future trend.\u201d<\/p>\n<p>As part of these efforts, cryptocurrency exchange BitMEX became one of the first trading platforms in the sector to announce a carbon-neutral status, vowing to offset the emissions of all Bitcoin transactions to and from the platform.<\/p>\n<p>BitMEX revealed it\u00a0purchased 7,110 metric tons of CO2 credits, valued at around $100,000, in partnership with AI carbon data tracking firm Pachama. Carbon credits are certifications of <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>roval granted by official legislative bodies that allow corporations to use one ton of carbon dioxide in an approach that fosters accountability and data traceability.<\/p>\n<p>BitMEX\u2019s move will ensure that the platform sustains its operations for the upcoming calendar year while offsetting all emissions associated with Bitcoin transactions to and from its servers. To the exchange, a \u201cholistic effort\u201d needs to both include research into the environmental impact and also fundamental education on the \u201cpossibilities unlocked by crypto <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a>.\u201d<\/p>\n<p>Speaking to Cointelegraph, Alex Salnikov, co-founder and head of product at NFT marketplace Rarible, said that part of the reason the cryptocurrency industry is so heavily scrutinized over its carbon footprint is \u201cthe transparent design\u201d it has, and not necessarily its environmental impact.<\/p>\n<p>Salnikov added that the \u201cadditional pressure is a good thing, as the space is accelerating its push to become energy efficient with proof-of-stake blockchains.\u201d To Salnikov, the ultimate goal is to ensure that most, if not all, Web 3.0 tools \u201chave minimal or zero carbon footprint.\u201d<\/p>\n<p>Carbon offsets, Salnikov said, are \u201cdefinitely important as a stepping stone.\u201d Not everyone agrees, however, with some arguing that these offsets may do more harm than good.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Are_carbon_offsets_greenwashed\"><\/span>Are carbon offsets greenwashed?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>In early October, Jennifer Morgan,\u00a0executive director of Greenpeace, spoke at the Reuters Impact conference on the growing carbon-offset trend and implied that companies are evading their responsibilities through carbon credits.<\/p>\n<p>At the conference, Morgan <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.reuters.com\/business\/sustainable-business\/reuters-impact-greenpeace-calls-end-carbon-offsets-2021-10-06\/\">argued<\/a> that there is \u201cno time for offsets,\u201d as we are in \u201ca climate emergency,\u201d and as such, there is a need to phase out fossil fuels. She added that \u201coffsetting schemes are pure \u2018greenwash\u2019\u201d that allow companies to \u201cdo what they\u2019ve been doing and make a profit.\u201d<\/p>\n<p>Speaking to Cointelegraph, Martha Reyes, head of research at cryptocurrency exchange Bequant, seemingly agreed with Morgan, saying that carbon credits are \u201cnot an ideal solution to reduce carbon emissions.\u201d She added that both investors and regulators are \u201crightly waking up to greenwashing, which is an issue in traditional markets.\u201d<\/p>\n<p>As for what cryptocurrency companies can do to reduce their impact, Reyes argued that a more sustainable approach to Bitcoin mining is to use more renewable energy. China\u2019s crypto mining ban meant miners that were using carbon-based energy sources were forced to leave the country and migrate.<\/p>\n<p>To Morgan, carbon offsets allow companies to keep polluting without cutting off their emissions, as they simply buy credits from projects that reduce or avoid the release of CO2, such as solar power farms.<\/p>\n<p>In April, according to Reuters, a group researching the integrity of carbon offsets said that 29% of the forest carbon offsets it analyzed in a $2 billion program <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.reuters.com\/business\/environment\/california-program-overestimates-climate-benefits-forest-offsets-study-2021-04-30\/\">overestimated<\/a> the amount of emissions being offset, totaling around 30 million metric tons of CO2.<\/p>\n<p>The problems surrounding carbon offsets are evident, but whether there are other ways for cryptocurrency industry players to make a difference if they aren\u2019t involved in mining is up for debate.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"ESG_crypto_assets\"><\/span>ESG crypto assets<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>In the face of a climate emergency, Greenpeace has increasingly been moving against polluting entities. In May, the organization said its ability to\u00a0accept Bitcoin donations was \u201cno longer tenable.\u201d The organization started accepting BTC donations back in 2014 and cited a clearer view of the amount of energy needed to run Bitcoin as the reason for the move.<\/p>\n<p>Speaking to Cointelegraph, Eric Berman, senior legal editor of U.S. finance at Thomson Reuters Practical Law, said he does not see anything inherently \u201cdirty\u201d about Bitcoin or any other cryptocurrency. Berman added that like other commercial enterprises, BTC uses energy and, as such, sustainability \u201cis in the eye of the miner.\u201d<\/p>\n<p>To Berman, large mining enterprises can be required to use clean energy sources, not because regulators force them to do so but because the market collectively votes on that happening by preferring BTC mined with renewable energy. He told Cointelegraph:<\/p>\n<blockquote><p>\u201cAs I understand it, developers are currently designing ways to digitally tag a Bitcoin or other crypto units to reflect that it has been sustainably mined, which could create bifurcated markets within each cryptocurrency with the sustainably mined version holding the greater value.\u201d<\/p><\/blockquote>\n<p>He said that tracking coins mined with renewable energy could make them accessible to investment vehicles focused on optimal environmental, <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">social<\/a> and governance (ESG) factors.<\/p>\n<p>Who decides which coins get an ESG tag, he added, is \u201clikely to be quite political,\u201d as even figuring out who would be the arbiter of the rating raises creates \u201ca whole spectrum of questions and would threaten to institutionalize crypto in a way that is antithetical to the spirit of Bitcoin and crypto.\u201d<\/p>\n<p>Bequant\u2019s Reyes also pointed out that cryptocurrency miners are signing energy deals with suppliers and \u201care taking advantage of the renewable energy market.\u201d Green mining initiatives are growing, she said, considering both their source of energy and the disposal of outdated mining equipment.<\/p>\n<p>Players in the cryptocurrency space have done more than buy carbon credits to reduce their environmental impact. Through the\u00a0Crypto Climate Accord, an environmental initiative supported by over 150 organizations from the sector, crypto firms pledged to make their operations more sustainable.<\/p>\n<p>However, most firms have not become CCA signatories, an act requiring a public statement of commitment to achieving net-zero carbon emissions from electrical operations by 2030. Nevertheless, experts argue thatneither Bitcoin nor the cryptocurrency space should be in the spotlight.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Cryptos_role_in_the_climate_crisis\"><\/span>Crypto\u2019s role in the climate crisis<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>While cryptocurrencies are often in the spotlight when it comes to climate change, Sarah Manski, assistant professor at George Mason University\u2019s School of Business, said that it\u2019s important to understand that \u201cEvery commodity and every currency has some carbon footprint.\u201d Speaking to Cointelegraph, Manski said:<\/p>\n<blockquote><p>\u201cIt would be reasonable to say that the printing of U.S. banknotes in a year equals about 200,000,000 kilowatt hours of energy consumption, including thousands of tons of ink, cotton, linen and water. Our coins use hundreds of thousands of tons of metal.\u201d<\/p><\/blockquote>\n<p>Manski added that while some carbon offsets are greenwashing, many are not, implying that not all carbon offsets are equal and some are more transparent than others. Speaking to Cointelegraph, Pete Humiston, manager at Kraken Intelligence, said that developments in the industry have been alleviating concerns surrounding the industry\u2019s \u201ccarbon intensiveness.\u201d<\/p>\n<p>Humiston added that China\u2019s crypto ban moved mining hashing power to North America, where the \u201cenergy mix is much more skewed towards renewables.\u201d He specifically focused on the state of Texas, saying it was a preferred destination for many of the mining entities that fled China and that it derives \u201ca significant chunk\u201d of its energy from wind power.<\/p>\n<p>Large-scale mining entities, he added, purposefully built their operations close to local renewable initiatives to \u201ctake advantage of cheap power surpluses which would otherwise be discharged as waste.\u201d<\/p>\n<p>For Humiston, the crypto-asset space has made \u201csignificant inroads into becoming carbon neutral\u201d and will keep doing so. He concluded:<\/p>\n<blockquote><p>\u201cThis is especially true given that the economics of mining incentivizes miners to use cheap renewable energy to mine Bitcoin and other crypto assets.\u201d<\/p><\/blockquote>\n<p>Back in October 2020, the 3rd Global Cryptoasset Benchmarking Study by the University of Cambridge showed that 76% of cryptocurrency miners use electricity from renewable energy sources as part of their energy mix, with 39% consuming only renewable energy when mining proof-of-work cryptocurrencies like Bitcoin, Ether (ETH) and Bitcoin Cash (BCH).<\/p>\n<p>In July, The Bitcoin Mining Council estimated that the Bitcoin mining industry was using 56% renewable energy in its power mix while using a \u201cnegligible amount of energy\u201d when compared with the global energy consumption. The BMC\u2019s estimate was based on a three-question survey of just 32% of the miners on the Bitcoin network, which revealed a 67% sustainable power mix and was used as a basis for the 56% estimate.<\/p>\n<p>While estimating how renewable energy is being used to mine Bitcoin or other cryptocurrencies, Humiston has argued that the industry is \u201cgoing in the right direction.\u201d Reyes claimed an overlooked but growing use of blockchain technology is \u201cin conservation and reforestation efforts,\u201d which benefit from the added transparency and accountability of a blockchain.<\/p>\n<p>A trend is visible among key industry players with or without carbon offsets with a shift toward a more sustainable approach. The industry\u2019s efforts to be more environmentally friendly are showing, as not every institution is running from BTC because of its carbon footprint.<\/p>\n<p>The $9-trillion multinational investment giant BlackRock, which has been vocal about its focus on ESG initiatives, held almost $400 million worth of shares in two Bitcoin mining firms through its funds as of August.<\/p>\n<p>As the industry moves toward a greener future, cryptocurrency adoption may grow as some of those sitting on the sidelines may stop seeing the environmental impact as a concern surrounding their involvement in the industry. Whether other sectors will join crypto\u2019s green ambitions, only time will tell.<\/p>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/p>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. 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Environmental impact has been a hot topic in the crypto sector, with&#8230;<\/p>\n","protected":false},"author":1,"featured_media":364710,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMTEvZGYwMDk5ZGQtZGRiNi00ZmIxLTk0MmYtMzExY2EyZjFlOWEyLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74894,74872,117,10595,73711,70934,4965],"class_list":["post-364709","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-blockchain","tag-green-technology","tag-business","tag-environment","tag-investments","tag-regulation","tag-technology"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/364709","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=364709"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/364709\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/364710"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=364709"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=364709"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=364709"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}