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Based on the European carbon credit market, you will need $197 to offset 2.2 tonnes of CO2 annually. With Bitcoin currently trading at around $37,000, it is a negligible amount.
Research findings published by CoinShares on Monday have shown that the bitcoin carbon footprint is less than 0.08% of global CO2 emissions. According to the report, the Bitcoin (BTC) mining network emitted 42 megatons of carbon dioxide in 2021. Compared to the global emissions of 49,360 Mts in the same year, the figure looks negligible.
It becomes even clearer when the bitcoin carbon footprint is stacked against major sectors like Aviation and Marine transport which generate 48x and 36x more carbon respectively.
What is more interesting is that most of the bitcoin carbon footprint is from non-western countries. These countries generate electricity with fossil fuels and accounted for up to 53% of Bitcoin’s total carbon emission early in 2021. Contrarily, countries like Norway, Iceland, and Sweden that use renewable energy for bitcoin mining do not produce carbon emissions.
The implication of this is simple: if Bitcoin mining begins to run on clean energy, the network could very well generate no carbon emissions.
How a Change in Policy Can Affect Bitcoin Carbon Footprint
As it stands, global estimates put Bitcoin’s use of renewable energy between 40 and about 75 percent, most of which happens in Western countries. Thus, if more western countries pursue clean energy and incentivize miners, bitcoin carbon footprint could reduce even further. One such call was that made by Spanish MP after protests in Kazakhstan stalled bitcoin mining.
Alternatively, if the nations unveil regulations, bans, and taxations that force the miners into non-western countries where fossil fuel is the thing, emissions will increase.
Again, if more non-western countries begin to make the switch to clean energy, the bitcoin carbon footprint will reduce even further. However, if they simply incentivize miners by reducing taxation, giving them room for operation, and issuing licenses freely, carbon emissions would increase.
Cost of Offsetting Carbon Emission Also Negligible
In the end, there is a need to offset carbon emissions. According to the report, if this cost is shared among bitcoin holders, 2.2 tonnes of CO2 will need to be offset for each coin.
Based on the European carbon credit market, you will need $197 to offset 2.2 tonnes of CO2 annually. With Bitcoin currently trading at around $37,000, this is also a negligible amount.
At 91 terawatt-hours of electricity annually, Bitcoin may use more energy used by 159 countries. However, as Satoshi Nakamoto said in 2010:
“The utility of the exchanges made possible by Bitcoin will far exceed the cost of electricity used. Therefore, not having Bitcoin would be the net waste.”
Read other Bitcoin news on Coinspeaker.