Cryptocurrency Mining and Climate Change

When political leaders demonstrate the courage of their convictions, it’s immediately evident. Perhaps it’s because the authenticity shines through the usual political fog so brightly. All pretense drops, the language becomes direct and straightforward, and the clear meaning of their words rings out.

The most striking example recently of such leadership, one that has been both inspiring and breathtaking, is that of President Volodymyr Zelensky. He has not shied away from acknowledging the immense military odds stacked against Ukraine or downplayed the difficulty ordinary Ukrainians face. He has invoked a deep sense of common purpose and brought his country together.

Kathy Hochul sworn in as the 57th governor of New York. Photo by NY Senate licensed under CC BY 2.0.

In a different way and at a very different level, NY Gov. Kathy Hochul has a similar opportunity to demonstrate the courage of her convictions. The Climate Leadership and Community Protection Act (CLCPA), signed into law in 2019, laid out aggressive benchmarks for New York to reduce its carbon emissions. Gov. Hochul has emphatically expressed her support for the CLCPA, proclaiming in her recent State of the State address that climate change is “a threat to our way of life, here and now.” She boldly called for a ban on the use of natural gas in new construction after 2027, the rapid development of offshore wind, and the phasing out of peaker plants—only used when excess energy is needed by the grid—as well as older fossil-fuel power plants.

Another closely related issue offers Hochul a similar chance to display bold leadership: imposing a statewide moratorium on proof-of-work bitcoin mining, a practice that poses a profound threat to the climate. Assemblymember Anna Kelles has introduced a bill that would place a three-year moratorium on proof-of-work cryptocurrency mining. The bill is currently making its way through the legislative process and has gained the support of 41 co-sponsors and 15 key committee chairs in the Assembly.

So far the governor has said very little about bitcoin mining, its environmental impact, or whether she supports a moratorium. It’s time she stepped forward.

Why is this action so critical?

Proof-of-work cryptocurrency mining consumes a tremendous amount of energy to operate the multiple, high-powered computers that validate the exchange of bitcoins as well as the cooling technology needed to keep the machines from overheating. In fact, a Cambridge University study concluded that bitcoin mining uses more electricity annually than the entire country of Argentina.

What is especially galling is that proof-of-work is only one way to mine cryptocurrency. “Proof-of-stake, another popular method, uses far less energy,” points out Yvonne Taylor, co-founder and vice president of Seneca Lake Guardian. But, she notes, proof-of-work’s energy use in the U.S. has grown 320% in just the past five years. New York, moreover, hosts nearly 20% of that.

Thanks to the work of Taylor and other environmentalists, attention in New York has focused on Greenidge Generation, a recently revived operation located on Seneca Lake. Formerly a coal-fired power station, it turned to natural gas when it reopened its doors. Originally intended to be a peaker plant, no one knew it would become a private bitcoin mining operation that ran 24 hours a day, 7 days a week.

Greenidge’s Title V air permit is currently up for renewal, as discussed in our last issue. The decision on the renewal was due Jan. 31 but has been postponed to March 31 so that the state Department of Environmental Conservation (DEC) could “complete its ongoing review” of about 4,000 public comments on the case. As Peter Mantius reports, however, the delay provides Greenidge with the ability to expand its operations.

Under the CLCPA, the state is required to reduce its greenhouse gas emissions 40% by 2030. The importance of doing so was underscored by today’s release of a report from the UN’s Intergovernmental Panel on Climate Change (IPCC) warning that the pace of global warming threatens to overcome our ability to adapt to it. Greenidge is just one of many fossil-fuel power plants retired in upstate New York that could potentially be reopened for proof-of-work cryptocurrency mining; the possibility of Cayuga Power Plant going down this road punctuates the point.

If the bitcoin mining industry is allowed to continue growing without any oversight or regulation, the ability to achieve the CLCPA goals will be put in serious jeopardy. For the governor to be true to her word that climate change is a threat to our way of life, it’s clear what her next move must be: declare a moratorium on bitcoin mining.

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