Researchers from the non-profit organization Exponential Science and University College London have pointed out that Bitcoin mining bans might have unintended environmental consequences that could increase carbon emissions by up to 2.5 million tonnes annually.

In the paper titled “The Unintended Carbon Consequences of Bitcoin Mining Bans: A Paradox in Environmental Policy,” the researchers examined how concerns over Bitcoin mining’s environmental impact have prompted various governments to consider or implement bans on cryptocurrency mining.

However, these well-meaning policies may have had the opposite effect of shifting mining operations to regions with higher carbon emissions.

The research team, consisting of Dr. Paolo Tasca, Juan Ignacio Ibáñez, Aayush Ladda, and Logan Alred, utilized data from Nodiens to model the environmental impact of Bitcoin mining bans by assessing total carbon emissions across various countries.

Environmental impact

The researchers emphasized that mining bans in countries rich in renewable energy — such as Canada, Paraguay, El Salvador, and Norway — could increase emissions, thereby undermining these countries’ environmental objectives.

For instance, Canada, which heavily relies on nuclear and hydroelectric power, might experience a significant rise in carbon emissions of up to 2.5 million tonnes annually. Paraguay, El Salvador, and Norway would also see increased emissions due to similar bans.

Meanwhile, a ban in nations with carbon-intensive energy sources, like Kazakhstan, China, and Malaysia, would likely reduce emissions. Kazakhstan, which primarily relies on fossil fuels, could see a significant decrease in carbon emissions of up to 3.4 million tonnes if it adopted such initiatives.

The study also examined potential bans at the state level in the US. It noted that Kentucky, Georgia, and Nebraska could experience reduced emissions with a ban, while New York and Texas would likely see increased emissions from similar actions.

Unintended consequences

The research suggests that bans on Bitcoin mining in low-emission countries could lead to a substantial net increase in global carbon emissions as mining operations relocate to regions with higher carbon footprints. This outcome contradicts the original goals of these policies.

To address these challenges, the researchers advocate for a more nuanced regulatory framework surrounding Bitcoin mining. They stress that not all Bitcoin mining is equal, and it is vital to evaluate the energy sources used in mining operations before establishing regulatory policies.

Further, the paper urged policymakers to reconsider the effectiveness of outright Bitcoin mining bans as a means to reduce global carbon emissions.

Instead, the paper stated that the authorities should encourage renewable energy use for mining operations in high-carbon areas and provide incentives for relocating mining activities to low-carbon regions, which could better align with the goal of reducing carbon emissions while supporting the growth of the crypto sector.

Margot Paez, a fellow at the Bitcoin Policy Institute, echoes this sentiment. She believes that Bitcoin has the potential to facilitate a transition from the existing economic system to one that better aligns with ecological principles, ultimately helping mitigate the worst effects of climate change.

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