Intergovernmental Panel on Climate Change (IPCC) Warns on Climate Change – Emission from Cryptocurrencies – A Serious Cause of Concern

  • Data centres and technologies such as blockchain consume a lot of electricity
  • Cryptocurrencies might be a huge source of CO2
  • Digital technology can compound and exacerbate climate imbalances

On Monday, the IPCC released a Report . According to the report, attaining the Paris Agreement’s long-term temperature goal would necessitate a rapid reduction in GHG 17 emissions to ‘net zero,’ which is unrealistic without immediate and ambitious action at all scales. The extraordinary COVID-19 epidemic has had far-reaching consequences on the world’s economic and social systems and recovery will bring both difficulties and opportunity for climate mitigation.

Advancements in information storage, processing, and communication technologies, including artificial intelligence, will have an impact on emissions. According to the report, abovementioned factors can increase energy-efficient control, lower transaction costs associated with energy production and distribution, improve demand-side management, and eliminate the need for physical transportation.

However, data centres and related IT systems and technologies such as blockchain consume a lot of electricity and will drive up energy demand. If energy production is not decarbonized, cryptocurrencies might be a huge source of CO2, and there is also concern that digital technology would compound and exacerbate current imbalances. Information Technology may have an impact on broader work and leisure habits, and how individuals use their leisure time will become increasingly relevant in terms of emissions intensity. Since better efficiency reduces costs, it frequently includes some ‘rebound,’ which offsets at least some of the emission reductions.

According to the report, Technology can enable both emissions reductions and/or increased emissions. Governments play an important role in most major innovations, in both ‘technology-push’  and induced  by ‘demand-pull’ , so policy is important in determining its pace, direction, and utilisation . Overall, the challenge will be to enhance the synergies and minimise the trade-offs and rebounds, including taking account of ethical and distributional dimensions

Technology, according to the paper, can permit both emissions reductions as well as increase. Governments play a vital role in major innovations, both those induced by technology-push and those induced by demand-pull. Therefore, Government policy is crucial in deciding Technologies’ pace, direction, and usage. Overall, the task will be to maximise synergies while minimising trade-offs and rebounding, while also taking ethical and distributional considerations into account.

The energy requirements of cryptocurrencies is also a growing concern, although considerable uncertainty exists surrounding the energy use of their underlying blockchain infrastructure. For example, while it is clear that the energy requirements of global Bitcoin mining have grown significantly since 2017, recent literature indicates a wide range of estimates for due to data gaps and differences in modelling approaches. Initial estimates of the computational intensity of artificial intelligence algorithms suggest that energy requirements may be enormous without concerted effort to improve efficiencies, especially on the computational side.

Majority of the industries and firms are striving to achieve Net Zero by 2050. Crypto Industry is agile and innovative. It remains to be seen how fast it will transition towards emission friendly mining.

Founded in 1988 by the United Nations Environment Programme (UNEP) and the World Meteorological Organization (WMO), The Intergovernmental Panel on Climate Change (IPCC) is the world’s foremost authority on climate change assessment.  IPCC examines and evaluates the most up-to-date scientific, technical, and socioeconomic data produced around the world that is relevant to understanding climate change. It provides a clear scientific assessment of the current state of knowledge on climate change and its possible environmental and socio-economic impacts to the world.

Staff Galactik Views

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