Without appropriate intervention and policy changes, the energy consumption and carbon emissions from Chinese Bitcoin mining will jeopardise the country’s climate goals.
These claims come from a new study carried out by researchers at the University of Chinese Academy of Sciences, Cornell University, Tsinghua University and University of Surrey.
Their research finds that the annual energy consumption of the Bitcoin mining in China is expected to peak in 2024 at 297 terawatt-hours and generate 130 million metric tons of carbon emissions.
This would exceed the total energy consumption of countries like Italy and Saudi Arabia, whilst the carbon emissions would exceed annual greenhouse gas emissions of countries such as the Czech Republic and Qatar.
China accounts for more than 75% of global Bitcoin mining as of April 2020, largely as a result of its cheap power which is taxed at a lower rate than other countries. Even so, President Xi Jinping has pledged China will reach its carbon emissions peak by 2030 and become carbon neutral by 2060.
However, due to Bitcoin being a relatively new industry it is not recognised as an independent department for carbon emissions, which “adds difficulty for policy makers to monitor the actual behaviours of the Bitcoin industry and design well-directed policies,” according to the researchers.
“Without appropriate interventions and feasible policies, the intensive Bitcoin blockchain operation in China could quickly grow as a threat that would potentially undermine the emission reduction effort taking place in the country,” the researchers added.
The study comes at a time of heightened global interest into cryptocurrencies and mining operations alike, with the entire industry’s market cap having surpassed $2 trillion (£1.45 trillion) in April 2021, doubling from $1 trillion (£726 billion) in just two months.
Leading blockchain developers, such as Ethereum, are hoping to transition away from the energy intensive system of mining currently used – called a proof of work model – to the far less environmentally damaging proof of stake model.