Carbon emissions resulting from China’s domestic Bitcoin mining operations may reach 130.5 million metric tons by 2024, surpassing the total of countries including the Czech Republic and Qatar, according to a study released on Tuesday.
Such a level of greenhouse gas production would place the cryptocurrency mines in the top ten of China’s domestic industrial sectors, as well as in the top ten of the country’s largest-emitting cities, the study showed.
The article, published in Nature Communications and led by scholars at the Chinese Academy of Sciences, suggests that punitive carbon taxes are ineffective in reducing the environmental impact of digital currency mining, calling instead for measures that restructure the energy consumption model of the young and rapidly growing industry.
China represents the world’s largest producer of Bitcoins by a significant margin, claiming almost two-thirds of the global distribution as of April 2020.
SEE ALSO: Inner Mongolia to End Crypto Mining by April in Bid to Reduce Energy Consumption
Cryptocurrencies like Bitcoin employ blockchain technologies, which depend on sophisticated computers that solve increasingly difficult mathematical equations to unlock a new unit of currency. The progressively more complex model serves to stabilize the currency and prevent inflation. Given the exponential growth rate of energy required to generate a new Bitcoin, the potential environmental impact of future mining is significant.
The study also predicted that China’s domestic Bitcoin industry will by 2024 surpass the total energy consumption of sizeable economies such as Saudi Arabia and Italy, unless drastic actions are taken by regulators. More broadly, the scholars contend that current mining trends threaten to “become a non-negligible barrier against the sustainability efforts of China.”
Authorities have already begun to adopt policies to reign in the environmental impacts of Bitcoin mining. In late February, the government announced plans to completely dismantle Inner Mongolia’s growing mining operations by the end of April.
Moreover, the central government’s 14th five-year plan, released last month in Beijing, calls for the country to reach peak carbon emission levels before 2030 and achieve total carbon neutrality by 2060. These ambitious targets will rely in part on regulators’ ability to successfully counteract the adverse effects of representing the global leader in Bitcoin mining.
In order to reign in the environmental consequences of the industry, the study emphasized the need to move away from punitive carbon tax approaches, which do nothing to alter the underlying model of energy consumption. Instead, the scholars propose the adoption of specific policies that would create a negative feedback emissions cycle, incentivizing miners to conduct their operations in a more sustainable way.
In a correspondence with Forbes, one of the study’s contributors Wang Shouyang explained that this alternative approach “should be carried out by the government, placing limitations on Bitcoin mining in certain regions that use coal-based heavy energy.”
By making it more profitable to operate facilities with renewable energy, authorities may succeed in reducing emissions even as the industry continues to grow.