Federal report warns of crypto environmental impacts and urges actions

A September 8, 2022 report issued by the White House Office of Science and Technology Policy, Climate and Energy Implications of Crypto-Assets in the United States, urged the US to take actions to mitigate the environmental, climate and pollution implications arising from crypto-assets and crypto mining.  

The report noted that "Crypto-assets use a significant amount of electricity," although noting that the "Electricity usage varies substantially with different crypto-asset technologies."  The report stated that "Global electricity generation for the crypto-assets with the largest market capitalizations resulted in a combined 140 ± 30 million metric tons of carbon dioxide per year (Mt CO2/y), or about 0.3% of global annual GHG emissions."

At the same time, though, the report noted that "There is potential for blockchain technologies to play a role in environmental markets, and DLT could potentially enable distributed energy resource coordination, as well as broader supply chain management."

The report concluded that "To help the United States meet its climate objectives of a 50% to 52% reduction in GHG [greenhouse gas] emissions by 2030, a carbon pollution-free electricity system by 2035, and a net-zero emissions economy no later than 2050, crypto-asset policy during the transition to clean energy should be focused on several objectives: reduce GHG emissions, avoid operations that will increase the cost of electricity to consumers, avoid operations that reduce the reliability of electric grids, and avoid negative impacts to equity, communities, and the local environment."

The report recommended various "actions for consideration" to help "ensure the responsible development of digital assets," such as that: 

The US should "Minimize GHG emissions, environmental justice impacts, and other local impacts from crypto-assets."

The US Department of Energy (DOE), "in coordination with the Federal Energy Regulatory Commission, the North American Electric Reliability Corporation and its regional entities, should conduct reliability assessments of current and projected crypto-asset mining operations on electricity system reliability and adequacy. If these reliability assessments find current or anticipated risks to the power system as a result crypto-asset mining, these entities should consider developing, updating, and enforcing reliability standards and emergency operations procedures to ensure system reliability and adequacy under the growth of crypto-asset mining."

Federal agencies should "Obtain data to understand, monitor, and mitigate impacts" from crypto-assets. "The Administration should consider working with Congress to enable DOE and encourage other federal regulators to promulgate and regularly update energy conservation standards for crypto-asset mining equipment, blockchains, and other operations."

The report urges that "Crypto-asset industry associations, including mining firms and equipment manufacturers, should be encouraged to publicly report crypto-asset mining locations, annual electricity usage, GHG emissions using existing protocols, and electronic waste recycling performance."

Federal agencies should "promote and support research and development priorities that improve the environmental sustainability of digital assets, including crypto-asset impact modeling, assessment of environmental justice impacts, and understanding beneficial uses for grid management and environmental mitigation."