IPCC cites cryptocurrency as carbon emissions factor in landmark report

A new report from the Intergovernmental Panel on Climate Change (IPCC) released Monday contained dire warnings about future climate risks.

The report from the IPCC, an intergovernmental panel within the United Nations, was the third in a series of reports examining the state of climate change mitigation efforts. The panel said in a statement Mondy that “[w]ithout immediate and deep emissions reductions across all sectors, limiting global warming to 1.5°C is beyond reach.”

Included in the more than 2,000-page report were a pair of mentions of cryptocurrency networks as a carbon emissions risk. 

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As per the report, “large improvements in information storage, processing and communications 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.”

“However, data centres and related IT systems (including blockchain) are electricity-intensive and will raise demand for energy — cryptocurrencies may be a global source of C02 if the electricity production is not decarbonized — and there is also a concern that information technologies can compound and exacerbate current inequalities.” 

But governments play a key role in determining whether technology reduces or increases emissions, the authors note. “Overall, the challenge will be to enhance the synergies and minimize the trade-offs and rebounds, including taking account of ethical and distributional dimensions.”

Later, the report states that “digitalization, automation and artificial intelligence, as general-purpose technologies, may lead to a plethora of new products and applications that are likely to be efficient on their own but may also lead to undesirable changes or absolute increases in demand for products.” This section later goes on to state:

“The energy requirements for cryptocurrencies is also a growing concern, although considerable uncertainty exists surrounding the energy use of their underlying blockchain infrastructure.”