Intergovernmental Panel on Climate Change calls cryptocurrency CO2 emissions a 'growing concern'

The United Nations arm aimed at assessing the science related to climate change, the Intergovernmental Panel on Climate Change, or IPCC, has named crypto among technologies that may require greater energy demands.

According to a report released on Monday, the IPCC said cryptocurrencies, as part of the infrastructure around data centers and information technology systems related to blockchain, had the potential to be a “major global source” of carbon dioxide emissions. The group said that estimated CO2 emissions between 2010 and 2019 suggested there was only a 50% probability of limiting the rise of the average temperature of Earth by 1.5°C, based on the remaining carbon budget from 2020.

“The energy requirements of cryptocurrencies is also a growing concern, although considerable uncertainty exists surrounding the energy use of their underlying blockchain infrastructure,” said the report. “While it is clear that the energy requirements of global Bitcoin mining have grown significantly since 2017, recent literature indicates a wide range of estimates for 2020 (47 TWh to 125 TWh) due to data gaps and differences in modelling approaches.”

The IPCC included the energy requirements for artificial intelligence alongside crypto and blockchain. However, the group noted that all technologies had the potential to enable emissions reductions as well as increased emissions based on how they were governed:

“Large improvements in information storage, processing and communication technologies, including artificial intelligence, will affect emissions. They can enhance energy-efficient control, reduce transaction cost for energy production and distribution, improve demand-side management [...] and reduce the need for physical transport.”

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The report was the IPCC’s third and latest in its efforts to recommend halving global emissions by 2030 to reduce the environmental impacts of climate change. Most experts agree that the effects could include rising sea levels, an increase in extreme weather, posing challenges to populations residing near coastlines and crop production.

“In the scenarios we assessed, limiting warming to around 1.5°C (2.7°F) requires global greenhouse gas emissions to peak before 2025 at the latest, and be reduced by 43% by 2030; at the same time, methane would also need to be reduced by about a third,” said the IPCC. “Even if we do this, it is almost inevitable that we will temporarily exceed this temperature threshold but could return to below it by the end of the century.”

"We need to take action now or 1.5ºC will become out of reach, it will be physically impossible to get there." – #IPCC Working Group III Co-Chair Jim Skea at today’s press conference for the release of the latest #IPCC#ClimateReport on the mitigation of #climatechange. pic.twitter.com/EVouUNxaVQ

— IPCC (@IPCC_CH) April 4, 2022

Many regulators, lawmakers and even entertainers have made crypto and blockchain targets as the effects of climate change become more visible globally and the need to reduce emissions grows. However, CoinShares reported in January that the Bitcoin (BTC) mining network accounted for 0.08% of global carbon dioxide production — 49,360 megatons — in 2021.