Can Crypto Climate Accord Ease Bitcoin?

Can Crypto Climate Accord ease Bitcoin and save the environment? Typically, blockchain and cryptocurrency are two faces of a coin (!) and they both have quite a bad reputation when it comes to consumption of energy and carbon emissions.

And, there are lots of good reasons to say so. However, not going into those details, the CCA or the Crypto Climate Accord is all set to change that.

The main aim of this climate accord is to encourage the signatories in it to reduce their carbon emissions and attain net-zero emissions status by decarbonizing as soon as possible.

Ideally, the Crypto Climate Accord is enthused by the Paris Climate Agreement and is designed to encourage a complete transition of all blockchain networks into a 100% renewable energy by the end of 2025.

However, there are also other goals of the CCA which will be dealt with in a separate section of this article.

On the whole, the accord mainly intends to decarbonize the sector completely and ensure zero emissions from electricity by 2030, and 100% net-zero by 2040 with a special focus on making the crypto ecosystem 100% green.

As of now, there are more than 200 companies, individuals and blockchain networks associated with the crypto, energy, Decentralized Finance or DeFi, and technology sectors who have signed up to show their support to the Crypto Climate Accord.

However, this is something that should not be of the interest to the crypto exchanges, miners, and investors though.

Why? For that you will need to know more about the Crypto Climate Accord and if you want that this is the right place to be.

Here in this article you will find everything that will make your knowledge about it more comprehensive.

Can Crypto Climate Accord Ease Bitcoin and Save the Environment?

Can Crypto Climate Accord Ease Bitcoin

If you are keen about crypto and follow the events and happenings around the market then you would have already heard and expect to hear a lot more about Crypto Climate accord in the years to come.

You will also possibly hear about it in different climate change conferences such as COP30.

If you are wondering why, here is the reason: the Crypto Climate Accord is considered to be a game changer and will help the different industry sectors that pollute the environment by providing them with more sustainable and effective solutions in the following years.

The solutions offered by the CCA are very attractive for anyone who cares for the climate and is worried about the rapid changes in it.

Ideally, crypto and blockchain technology both themselves have the potential to get rid of carbon emissions from the budding crypto sector.

In addition to that, it also makes it easier for the individuals and other industries to take up low-carbon solutions.

The propagators of cryptocurrencies, especially Bitcoin, argue that the carbon emissions of these coins are nothing in comparison to the value provided by them.

Still, the impact of it on the climate, irrespective of it being big or small, is being used constantly by several governments and countries, the World Bank, the economists, the market analysts and the experts to dissuade people from using this digital money, they think.

However, the CCA comes to the rescue of all including the businesses, individuals, the climate, the crypto propagators, and for the crypto itself.

The main objective of the CCA is to limit the pages of history that talks only about the harmful effects of crypto on the climate.

The CCA is actually a consortium that is led by a set of private sector players and simply wants to change all blockchain operations to renewable energy to reduce carbon emissions and help eliminate the harmful effects of it to the climate.

When such a carbon neutral state is achieved the greenhouse gases that may still go into the air will be balanced out with the technology that will remove them.

If it is successful then it will solve the most significant issues to the climate.

This will, in turn, encourage other industries to do so and make this world a better place to live in.

Given the current rate of the climate being polluted by extensive crypto mining, especially by the Proof of Work or PoW crypto mining, that the crypto industry had no other alternative but to support the Crypto Climate Accord.

Ideally, no one who is engaged with the technology sector even remotely knows what climate change can do to the world and therefore cannot afford to be ignorant about this looming issue.

According to different studies and research reports published in several renowned scientific journals, the different data centers that are operating all over the world now consume as much as 1% of the entire electricity consumption of the world.

This figure is rising with every passing year, research says.

Talking about data centers, the crypto mining facilities in the true sense are single-minded data centers.

These facilities use a huge amount of energy which emits a lot of carbon into the air.

This calls for some quick and effective actions to make crypto mining an entirely ‘green’ venture.

A lot of companies are doing their part to contribute towards this goal right from launching an open-source software solution to monitor and verify green Bitcoin mining to switching over to using renewable energy instead of fossil fuel powered electricity.

And, it is not the non-profits that have realized the needs and benefits of the Crypto Climate Accord.

For example, there are a lot of mining firms that operate globally such as the Argo Blockchain, a firm based in the United Kingdom, and DMG Solutions, a crypto and blockchain company, have already entered into a partnership with the Crypto Climate Accord.

Then, there is a company named Zumo that makes B2B goods for the crypto mining companies and has also signed up for the Accord.

All of the partners of the Crypto Climate Accord are like-minded people who believe that collaborating with one another while using this technology will only lead the world and them towards a renewable energy revolution.

According to a statement on the website of CCA, there are more than 45 individuals and companies putting in their effort into this collective action.

All these supporters are either directly involved with the crypto industry or in its related industries.

Most importantly, it is supported by the UNFCCC or the United Nations Framework Convention on Climate Change. This surely is a big deal.

About Crypto Climate Accord

The Crypto Climate Accord or CCA comprises a group of like-minded people who are set out to do something productive and constructive for the world, its people and the climate.

They, like most others, do not complain and point at Bitcoin, Ethereum, and some other crypto coins for their massive energy consumption and huge carbon emissions.

Read Also:  Ways to Buy Crypto by Bypassing an Exchange

As said earlier, the Crypto Climate Accord is influenced by the 2015 Paris Agreement and was designed and released last year on April 8.

The partners of this accord aim to decarbonize the crypto industry and make it 100% green, as well as other industries along with it.

However, the program is directed by three non-profit companies such as:

  • The Rocky Mountain Institute
  • The Energy Web Foundation and
  • The Alliance for Innovative Regulation.

Out of these three companies, the first two focus mainly on changeover to low carbon footprints and sustainability.

On the other hand, the third company primarily is an international advocacy group.

They focus mainly on the application and administration of fair financial systems.

Apart from these three companies, the list of founders of the Crypto Climate Accord also includes the World Economic Forum.

Well, while talking about the Crypto Climate Accord, you will come across two specific terms that may be used interchangeably by those who do not know the actual difference between them.

If you too do not know about it, here it is for you:

  • Supporters – The supporters of the Crypto Climate Accord typically work collectively to create and scale green solutions. The supporters can be anyone such as the individuals, the companies, the non-profits, and others working in any sector.
  • Signatories – The signatories to the Crypto Climate Accord refer to those individuals or entities in particular who are involved more actively in the crypto market. They are also the ones who are publicly committed to reach a net zero emissions state from the electricity utilization in all of their respective operations related to crypto by 2030.

However, as it is in the case with all good sustainability programs, the Crypto Climate Accord also needs ongoing progress reports.

These reports help in keeping the Signatories on the right track to attain net-zero.

Another good thing about these reports is that they act as a source of inspiration as well as a roadmap for the other sectors to decarbonize completely and attain net-zero emissions.

Working Process

The working process of the Crypto Climate Accord revolves mainly around reducing emissions but it is also quite keen in fostering demand for clean tech and endorsing increased engagement with crypto in the long term.

The founders of the Crypto Climate Accord perform a lot of different activities that support their goals and help them to achieve them.

The Crypto Climate Accord is designed to change the concept and awareness of crypto.

It enables tracking the total energy consumption and carbon emissions related to blockchain in a much better way.

In reality, everyone knows that blockchain consumes a lot of energy but these are now made more energy efficient by using renewable energy.

However, the problem is that most people do not have the access to the right information related to that effect.

Now with the help of the Crypto Climate Accord it will be much easier for blockchain technology to track power consumption and the location of the mining facilities more reliably.

However, the blockchain technology is itself positioned quite well to do that but it is further facilitated with the help of Crypto Climate Accord.

Goals

Now, take a look at the goals of the Crypto Climate Accord which is overall to decarbonize the entire crypto industry completely and ensure that the greenhouse gas emission level comes down to net zero by 2040.

There are a few other preliminary objectives outlined in the Crypto Climate Accord. These are:

  • Attaining net-zero emissions for the Signatories of the Crypto Climate Accord from electricity consumption by 2040 by reducing pollution and following specific strategies that will be able to suck the historical Carbon Dioxide emissions of the industry out of the air
  • Transitioning all blockchain networks to renewable energy by 2030 if not earlier
  • Working with Supporters of the Crypto Climate Accord to build tools, solutions, standards, and technologies that will help in expediting and encouraging the blockchain networks to adopt 100% renewable energy by 2025 and
  • Demonstrating significant and certifiable progress by 2025 before the UNFCCC COP30 conference for all Crypto Climate Accord Signatories.

Lastly, and perhaps most importantly, the Crypto Climate Accord aims to create an open-source accounting standard that the crypto industry can use to measure the carbon emissions that are generated by it constantly.

Apart from that, it also has plans to develop specific software which will help the industry to verify the amount of renewable energy used by a particular blockchain network.

Another significant thing to note here in this aspect is that DMG Blockchain and Argo Blockchain declared in 2021 that they will create and direct a working group.

This working group will have the responsibility to advise and build a fresh green hash solution in support of the Crypto Climate Accord.

However, the Crypto Climate Accord publishes an assistance document on Crypto Energy and Carbon Accounting Good Practices for Blockchain.

Need to Care

It is extremely important to care for the climate impact due to crypto in order to save the environment even if you do not care much for crypto itself.

Caring for the climate means accessing a power grid that generates energy through wind or solar power and is less reliant on fossil fuels overall.

This will reduce carbon emissions to the air and make the environment more sustainable.

You should also care for the blockchain technology which has the potential to make the day to day life more sustainable.

The blockchain technology is open-source and comes with some unique features.

These features make it much more versatile, agile, innovative and responsive.

All these capabilities make this technology an ideal one to support more scalable, effective, and productive climate solutions that will produce the results fast.

You may not know but blockchain technology is used in different cases and for different purposes.

For example, the banner that you see on the website of one of your favorite eco-friendly brands stating that they have planted 10,000 trees may be very well powered by a blockchain.

Also, all those important charts and graphs that show lifecycle analysis and greenhouse gas emissions in the annual environmental report of a company may also be using the blockchain technology.

And, all those GOLS, GOTS, Oeko-Tex, and other certifications for sustainability may also be powered by a blockchain and therefore can be verified easily.

The Crypto Climate Accord simply establishes an open-source toolbox which the crypto mining industry and other sectors can use in the process of decarbonizing, tracking and proving their progress.

Typically, the useful tools offered by the Crypto Climate Accord to that end will help the users to:

  • Calculate the consumption of energy
  • Evaluate the impacts caused by the greenhouse gases
  • Facilitate the use of digitized renewables
  • Procure carbon offsets and
  • Prove green and sustainability certifications.

All in all, the potential impact of the Crypto Climate Accord is enormous even though it may seem niche.

It will surely become one of the biggest and most effective drivers for more productive and result-driven climate change solutions.

Read Also:  Blockchain Help in Crypto Climate Impact Accounting

It will surely not be just a band-aid for a particular industry segment that is under constant attack and accused for its rampant energy use.

The climate concerns are not simply restricted to different countries but it is also a worrying factor for the billionaires and crypto enthusiasts who are looking forward to funding the crypto industry.

For example, the CEO of Tesla, Elon Musk, has backed off from his plans to accept Bitcoin as a mode of payment simply due to the climate change concerns.

Not only that, he joined hands with Jack Dorsey of Twitter very recently in order to sponsor a report that showed exactly how Bitcoin can be a part of the renewable energy projects.

On the other hand, other countries such as China have cracked down on the crypto industry citing environmental concerns as one of their primary reasons.

China, in fact, has gone a step ahead and banned all types of crypto mining activities in the country.

Bitcoin mining alone, as a project report of the Cambridge University indicates, can consume more than 112 terawatt-hours of energy every year which is more than the total energy consumption amount of a lot of small countries.

It is for this reason, countries like El Salvador, which reportedly have become the first nation to make Bitcoin a legal tender, is looking for an alternative and cleaner energy source from volcanoes to power the Bitcoin mining operation inside its borders.

Risks

Just like any other thing, even though the Crypto Climate Accord is a boon for most of the industries including crypto, there are a few crypto critics who think otherwise.

They wonder whether or not using renewable energy for mining a few specific types of crypto tokens will be beneficial, especially when the same energy could be used to power homes, hospitals, and schools at the end of the day.

There is the risk of the hash rate of Bitcoin dropping and add to that there is also the risk of the mining difficulty getting easier due to lower energy consumption.

This will in turn result in more people participating in the mining process which will, once again, result in higher energy consumption.

Also, when the mining industry shifts to using renewable energy it may see a boom in cryptocurrencies which will also mean more and more people will be interested in mining.

This will raise the difficulty level once again bringing everything and everyone back to square one due to further energy consumption.

This means the industry may have to rely on using fossil fuels once again in order to meet the rapidly increasing demand for energy.

Erasing Crypto Carbon Footprint

Now, the question is whether or not the Crypto Climate Accord can really erase the carbon footprint of crypto.

Well, it seems to be a long shot and the most important factor is Bitcoin which stands in the way.

It is really a pretty tall order for the newly announced Crypto Climate Accord to erase the legacy of climate pollution by cryptocurrencies.

This is especially when you consider the enormous amounts of energy consumed by specific types of popular crypto coins for mining such as Bitcoin and Ethereum.

The main reason behind is that the goals of the Crypto Climate Accord seems to be set loosely in the plan which makes it seem really a potentially undefeatable challenge.

As said earlier, the CCA is led by the private sector and not by the governments and has a few specific goals set.

If these goals are achieved then the global emissions may be reduced to almost half by the end of this decade.

This will help the world in avoiding the worst effects of climate change in the future.

The good thing about the Crypto Climate Accord is that it has the support of some of the most prominent names in crypto industry as well as in the climate action segment such as:

  • Crypto companies such as Ripple and others
  • Blockchain technology conglomerates such as Consensys and others
  • Billionaire climate crusaders such as Tom Steyer and others and
  • The ‘climate champions’ appointed by the United Nation.

However, the Crypto Climate Accord, just like any other new plan and program, could not avoid criticisms.

A few critics say that even though the goals of the accord are clearly defined and sound pretty good, that is all in theory.

It can be really challenging to tackle the damage done to the environment by the crypto industry and achieve all of them in reality.

They say that the broad goals especially are the most unlikely ones to bring about any meaningful changes.

They think that, in this specific regard, there are a few particular things that simply cannot be fixed.

The critics also feel that Bitcoin, the largest player in the game, is highly likely to cause the most trouble for the Crypto Climate Accord to achieve its goals.

This is not only because it consumes a huge amount of energy but also because it is inefficient on purpose.

This is something that renewable energy sources cannot fix.

As you know Bitcoin uses the Proof of Work model to maintain security of the ledger by the verifiers who validate transactions and get new coins by solving the complex, energy-hungry, and increasingly difficult mathematical puzzles.

The mining equipment used in this regard competes with the renewable energy which is also required by the homes, hospitals and others to keep their appliances running.

In such a situation, if the demand for energy by the crypto industry increases so much that the other utilities do not receive the required amount, it is highly likely that they will move from renewable energy and turn to fossil fuels once again.

This will not mend the climate issue in any way.

That is why the experts say that the Crypto Climate Accord needs to look at both the faces of the coin – increasing the renewable energy sources and cleaning up those energy sources – in order to tackle climate change more effectively.

However, one of the founders Jessie Morris, the Chief Commercial Officer of the non-profit Energy Web Foundation which is leading the initiative, is very optimistic and says that the Crypto Climate Accord ensures a greener future for Bitcoin.

He says, it is quite a simple pitch and the major players in the Bitcoin ecosystem agree that if Bitcoin can be made green, it will reduce the risks and make it much easier for other businesses to join in and buy more of this coin.

They feel that this change is sure to come because Bitcoin, which accounts for more than half of the crypto market cap, is facing stiff competition already from the new crypto coins that have found the ways that make them much greener.

These particular crypto coins use a completely different blockchain technology in comparison to Bitcoin.

Read Also:  Is It Required to Pay Taxes on Crypto Profits?

As a result, these coins use very little energy while operating in comparison to Bitcoin.

Consequently, it is more feasible to run these particular crypto coins on renewable energy.

There is another significant aspect that stands in the way of achieving net-zero emissions.

In order to keep the Bitcoin miners from turning to dirtier fuel sources, it would need heavy subsidizing.

This is where things might go wrong because there is no feasibility in subsidizing an industry that is set up specifically to waste resources, experts think.

However, the founders refute it saying that their main idea is not to come together and ask for subsidies.

Rather, it is to bring everybody together for a combined action to erase the carbon footprint of the crypto industry that it is infamous for.

Still, the critics are skeptical about the success of the Crypto Climate Accord because they think that bringing everyone on the same page and board will be a pretty tough task even for a single blockchain network.

This is because the blockchain networks are created to be a decentralized system with no central oversight.

Game Changer or Green Washing

So, with all these discrepancies and doubts, you may tend to think whether Crypto Climate Accord is really a game changer or simply a greenwashing from the growing climate problem created by the crypto industry.

Especially, in this age when people who were so adamant and unrepentant big polluters previously are now finding a green conscience all of a sudden, such questions are quite relevant and natural.

Well, as said earlier, the Crypto Climate Accord is led by the private sector and voluntary.

This means that the accord is founded on a shared vision and the Signatories of it have a common interest in finding workable solutions that will be more effective and market driven.

And, since it is a collaborative project, the likelihood of green washing is very much minimized.

In fact, most crypto players believe that the Crypto Climate Accord goes far beyond sustainability of crypto.

A large number of prominent and high profile Bitcoin supporters defend it.

They think Bitcoin is the ideal ingredient of renewable energy projects that involve wind, solar, and battery storage technology.

However, the toll that Bitcoin and other crypto coins are taking on the environment and the world has gained a lot more attention than the soaring of their prices of late.

As mentioned before, the critics are skeptical.

They say that the Crypto Climate Accord will sidetrack the government regulations that are more effective even if a few of the crypto players have created self-regulating accord to reduce carbon footprint.

They warn that not all of the news will be good.

The critics say that people are generally bullish on crypto and do not care much about the climate impacts due to excessive mining of these digital coins.

This means that this unfailing interest of people will not let the energy-hungry PoW mining go away sometime soon.

The only way to prevent the climate from the harms caused by crypto is to put a ban on PoW mining by the governments of all the countries of the world.

However, the Crypto Climate Accord sets the brakes on such kind of regulation since it represents the interests of the Bitcoin miners.

Moreover, the critics think that the climate issue is much bigger in scale and graveness and the fact that only a few small scale mining startups have joined the Crypto Climate Accord represents only ‘a drop in the ocean.’

Some of the other major companies that are in discussion with the Crypto Climate Accord organizers that may change the game altogether are:

  • Argo – This company started its operation in the United States in early 2020. It has plans to put up its flagship mining facility with 200-megawatt power capacity on 130 hectares in Texas using cheap wind energy from a source nearby.
  • Wall – This company is known to earn about 90% of its revenue from Bitcoin. It differentiates the conventional dirty Bitcoin from the legit green Bitcoin.
  • Gryphon Digital Mining – This company is known to use low-cost and off-grid hydro power only for its entire operations from Upstate New York. The company claims to be the first Bitcoin mining company using 100% renewable energy and is committed not to have a trade-off between the climate and their financial profits.

The Bitcoin miners in the other parts of the globe where renewable energy sources are hard to find due to lack of infrastructure will need to labor harder and burn more fossil fuels and buy more servers.

This will not solve the growing climate issue even if the Bitcoin mining ventures in the other parts of the world open up and commit to use only the available renewable energy.

The accord also aims to develop an open-source accounting standard that will help in estimating the carbon emissions due to crypto.

But, it could be highly challenging to measure polluters in the crypto scene which is known for maintaining anonymity of the players.

This will create a lot of difficulty when it is needed to trace or verify a particular polluter.

Therefore, things need to be set right. It is important for all crypto users, individuals or a company, to be committed not to use fossil fuels while mining Bitcoin, especially coal.

It is also required to create it by using clean energy, which is the power source of the future.

This will make Bitcoin the reserve asset in the true sense in the future.

The most significant way to get everything right is by making sure that the mining operations are perfectly aligned with the other standards.

This will help significantly in avoiding the seemingly green washing aspect of the Crypto Climate Accord.

However, it is still early days for the Crypto Climate Accord to be judged precisely or drop the idea outright.

It still has a very high chance of success since consumers and investors typically look for companies that are responsible and care for the environment as they do.

If the accord is successful, then the Crypto Climate Accord will surely be a game changer for both the crypto industry as well as the environment.

Conclusion

The objectives of the Crypto Climate Accord are very clear and are expected to be achieved by the next UN climate conference.

However, as the article points out and the founders say, the aspirations are big and need some fine tuning to transition the thoughts to actions.