Bitcoin Mining Bans Could Lead to Increase in Carbon Emissions: Researchers

A new research paper has argued that Bitcoin mining bans could have the unintended consequence of actually increasing global carbon emissions in some cases.

The paper argued that banning Bitcoin mining in areas that use a comparatively high amount of renewable energy, such as Canada, Norway, or El Salvador, would encourage Bitcoin mining to grow in more fossil fuel-reliant countries like Kazakhstan, Russia, or China.

The working paper was put together by researchers at a not-for-profit blockchain research group Exponential Science, alongside researchers attached to University College London. It has not been peer-reviewed.

Proof-of-work blockchains such as Bitcoin rely on computers running an energy-intensive series of computations, a process called mining, which can often use fossil fuels for power.

As a result, many campaigners in different parts of the world have called for bans on Bitcoin mining, in the interest of reducing fossil fuel consumption and greenhouse gas emissions.

A Bitcoin mining ban in Canada would have the largest negative impact on any single country, if the report is correct.

The paper claimed that banning mining in the country could cause global mining emissions to rise 5.6%, launching an additional 2.5 million tonnes of CO2 into the atmosphere.

Canada is one of the world’s largest miners of Bitcoin, according to The Cambridge Centre of Alternative Finance, and is also a leader in renewable energy, which represents over 17% of the country’s total energy supply.

In comparison, the researchers estimated that a U.S.-wide ban would cause a 0.64% rise, and launch an additional 287,000 tonnes of greenhouse gas into the atmosphere, but they argue that the environmental impact of mining differs heavily depending on which state you look at.

A ban implemented in very fossil fuel-reliant states such as Kentucky or Georgia could help bring emissions down, the researchers argued, but a ban in states that have plenty of renewable energy like New York would have the opposite effect. Meanwhile, the paper claimed a European Union-wide ban would launch an additional 523,000 tonnes of greenhouse gas into the atmosphere

The paper worked on the assumption that miners would seek to continue their operations elsewhere and would also flock to countries with low energy costs, like Kazakhstan or Malaysia, to keep profitable.

This isn’t to say that banning mining in some countries wouldn't be beneficial when it comes to reducing emissions.

The paper found that a ban in Kazakhstan would reduce network emissions by approximately 7.6%, resulting in a decrease of 3.4 million tonnes of CO2 annually.

“Alternative regulatory approaches”

The paper’s authors suggested that “alternative regulatory approaches could prove more effective” than bans.

These could include “incentivizing the use of renewable energy for mining operations in high-carbon jurisdictions, and attracting bitcoin mining operations to low-carbon jurisdictions through tax breaks and other benefits.”

But’s unlikely the harshest critics of the Bitcoin mining industry will back down any time soon.

In March 2024, U.S. non-profit Greenpeace U.S. launched a scathing report on the industry, alleging it had “deep ties” with the fossil fuel industry and “right-wing climate deniers”.