WASHINGTON – The Environmental Working Group today applauds Sen. Debbie Stabenow (D-Mich.), chairwoman of the Senate agriculture committee, Sen. John Boozman (R-Ark.), the ranking member, and Sens. Cory Booker (D-N.J.) and John Thune (R-S.D.) for including in recently introduced legislation a key provision to increase transparency of how much power is used by energy intensive digital assets like bitcoin.
The provision requires the Commodity Futures Trading Commission, an independent government agency that regulates certain kinds of financial investment instruments, to work with other relevant federal agencies to examine and report back to the agriculture committee on the energy sources and consumption used to “mine” cryptocurrencies. The provision was included in the recently introduced Digital Commodities Consumer Protection Act of 2022, which would regulate digital assets through the commission.
The oversight provision would help increase transparency in an otherwise unregulated industry as the U.S. tries to stay on track with its climate goals.
The proliferation of U.S. cryptocurrency mining operations, and the electricity needed to operate the computer-based financial transactions using software code known as proof-of-work, are leading to soaring energy bills and levels of greenhouse gas emissions, according to a congressional investigation released last month.
“We applaud this important provision as a first step to greater transparency in the energy consumption associated with proof-of-work crypto mining,” said EWG Energy Policy Director Jessica Hernandez. “Industries, including proof-of-work cryptocurrencies like bitcoin, should prioritize curbing their emissions to combat climate change – not try to keep using fossil fuels to power their operations while also increasing energy costs to consumers.”
“These mining operations must be more transparent, and it is important Congress fully grasp the scope of their impacts in their regulatory approaches,” she added.
Any legislation must include more disclosure about and transparency measures for digital assets – an argument EWG and other advocacy groups have recently made to the Biden administration.
The White House Office of Science and Technology Policy is preparing to complete its report on its request for information on the climate and energy implications of digital assets. The report follows President Joe Biden’s executive order on “responsible development” of cryptocurrencies.
Bitcoin’s proof-of-work requires the use of massive, electricity-intensive computer arrays to authenticate transactions. Between 2017 and 2022, annual estimated electricity demand from bitcoin mining increased from 7 terawatt hours to more than 80, according to the most recent University of Cambridge estimates.
Electricity demand by comparable sectors has not increased, and for some industries it has declined. For example, energy use by data centers has not gone up, even though internet traffic and data center workloads have risen significantly. Data transmission networks and mobile communications networks are also rapidly becoming more efficient.
“At a time when virtually every other industry is trying to reduce their greenhouse gas emissions and electricity use to meet our ambitious climate goals, the cryptocurrency industry should be doing the same,” said EWG’s Hernandez.
The Environmental Working Group (EWG) is a nonprofit, non-partisan organization that empowers people to live healthier lives in a healthier environment. Through research, advocacy and unique education tools, EWG drives consumer choice and civic action.