Wall Street should be held accountable for Bitcoin mining emissions – Greenpeace
Major financial institutions on Wall Street are responsible for bankrolling the emissions-heavy bitcoin mining industry, according to a new report by Greenpeace USA.
The environmental non-governmental organization (NGO)'s report, titled “Bankrolling Bitcoin Pollution: How Big Finance is Funding a New Climate Threat,” diverges from previous Greenpeace papers on the Bitcoin (BTC) mining industry.
The main characters in the report are not the BTC miners themselves, but Wall Street and the banking industry.
Greenpeace says it supports Bitcoin mining by creating huge financial incentives for the economy, thereby perpetuating the ecological threat the industry represents.
The report named Trinity Capital, Stone Ridge Holdings, BlackRock, Vanguard and MassMutual as the top five financiers of Bitcoin mining companies for carbon pollution.
According to the report, by 2022 they have absorbed more than 1.7 million metric tons of carbon dioxide (CO2) — the equivalent of more than 335,000 American homes using electricity for a year.
Greenpeace notes that Bitcoin mining has grown into a large commercial industry.
Miners rely on support from banks and asset managers, while Wall Street and the banking industry heed the call and pay their share of the spoils.
Companies like BlackRock should be held responsible for growing the mining industry, the report says.
“Banks and asset managers have a duty to inform their shareholders and clients of the risks that currently do not have valuable information on the risks of the Bitcoin climate.”
Greenpeace has criticized the lack of research into how investments from traditional financial firms could enable carbon-intensive bitcoin mining operations.
Greenpeace also notes the crypto mining industry's lack of transparency and transparency, which “allows Bitcoin mining companies to avoid accountability and obscures the scale of the Bitcoin climate crisis.”
This “lack of popular electricity and emissions reporting” makes it difficult for investors, stakeholders and regulators to make informed decisions if they want to adopt green policies.
The NGO believes that financial companies involved in Bitcoin mining should report emissions related to investments and Bitcoin mining companies' operational services.
Greenpeace says Wall Street is funding climate change.
According to Greenpeace, it is hypocritical for banks to invest in or fund the crypto mining industry even if they have green, sustainable goals on their agenda.
In the United States, Texas has become an international hub for Bitcoin miners, absorbing a large number of miners who left China after the mining ban.
Greenpeace accuses Wall Street firms of funding this new gold rush, which has resulted in the building of many BTC mining facilities. The report highlighted the case of the Riot Platform facility near Rockdale. According to Greenpeace's 2022 estimates, the mining facility will emit the largest carbon emissions.
The main financiers of the Riot Facility were Vanguard, BlackRock, Morgan Stanley and State Street.
Citing data from the Cambridge Bitcoin Electricity Consumption Index (CBECI), Greenpeace's Riot facility alone accounts for 526,000 metric tons of carbon dioxide, the equivalent of 100,000 US homes emitted annually.
Greenpeace has highlighted the paradox of BlackRock as a leader in sustainable investment.
The NGO emphasized that BlackRock is a signatory to the Net Zero Asset Managers Initiative, including pledging to support net zero emissions by 2050 in an effort to limit global warming to 1.5°C.
However, among the 540 financial institutions in the Greenpeace study, BlackRock's investments in Bitcoin mining had the third-highest carbon emissions.
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Greenpeace has also backed cryptocurrencies, with lesser-known companies such as M&T Bank and Massmutul providing loans to miners by 2022.
MassMutual lends $100 million to BTC miner Core Scientific to finance over 250,000 metric tons of CO2. M&T produced 31,800 metric tons of CO2 and loaned $174 million to the Ralph's facilities.
“High-profile funders like BlackRock, Vanguard, and Masmutul are enabling this carbon illusion and avoiding disclosure or accountability for how it fits with their climate goals,” said Johanna Fornberg, senior research fellow at Greenpeace USA.
Bitcoin mining greenwashing follows the tobacco industry
Greenpeace has accused the Bitcoin industry of “making false and greenwashing claims about Bitcoin's environmental impact,” arguing that the environmental and social benefits are boosting the transition to renewable energy and helping the energy grid.
The report compared the Bitcoin industry's strategy to a “playbook derived from the tobacco and fossil fuel industries.” The NGO accused Bitcoin mining leaders of publishing “false studies in predatory scientific journals” written by industry representatives in an attempt to “paint a green image”.
Greenpeace says many of these papers are “typically written by people working for Bitcoin mining companies or trade associations with obvious conflicts of interest” and are submitted to journals known for their weak peer review processes. Once published, industry sells these papers to the public as rigorous science.
The papers claim that Bitcoin's energy-oriented mining is good for the environment by encouraging the purchase of renewable energy and providing stability to power grids. However, Greenpeace believes these ideas are “speculative, controversial or false”.
Greenpeace also claims that some bitcoin miners are “artificially reducing their carbon footprint by purchasing renewable energy credits (RECs) and reporting ‘market-based' emissions based on RECs and carbon offsets.”
In this way, they claim to achieve higher utilization of renewable energy and lower carbon emissions.
Many companies use RECs; However, Greenpeace says these market-based instruments are unregulated and often do little or nothing to reduce carbon emissions or stimulate renewable energy development.
BTC Mining Fee or Proof of Work (PoW)
Greenpeace believes that regulation and taxation should be used to “remove the high demand for energy” from Bitcoin miners. The United States states that they need “policies that make miners pay the environmental, social and economic costs of their operations.”
The NGOs agree with US President Joe Biden's administration's tax attempts, which are included in the digital asset mineral energy (DME) tax. Greenpeace said the levy could “encourage miners to clean up their operations”.
Biden's tax proposal for the crypto industry is a clear attempt to kill the US crypto mining industry. Senator Cynthia Lammis, one of the senators who cast the bipartisan vote to repeal SAB 121, said on X:
The US elections are only five months away, and crypto regulation has become a hot topic in political campaigns.
Former President Donald Trump has positioned himself as a pro-crypto candidate, supporting BTC miners and pursuing “Made in the USA” Bitcoin. On the other hand, Biden's anti-crypto stance could cost him votes in some swing states, causing the president to rethink his strong stance on crypto.
In addition to taxes, Greenpeace has introduced another way for Bitcoin mining to stay in the United States. Following his controversial code change campaign, he advocated for Bitcoin to change its consensus protocol from proof-of-work to proof-of-stake (PoS), as Ethereum did.
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The Bitcoin community and developers vehemently oppose this option, saying it would destroy the decentralized form of money it represents, leaving Bitcoin no longer the “money of voice.”
There have been attempts to embed Bitcoin with the PoS algorithm, but as the price graph shows, the community has not supported it.
Greenpeace's claim that Bitcoin miners use deceptive tactics to influence public opinion could spark conflict in the cryptocurrency community.
This conflict echoes the reaction to Greenpeace's recent report, “Mining for Power,” criticizing the Bitcoin community's one-sided attitude and potential conflict of interest, as the code change campaign is directly funded by Ripple co-founder Chris. Larson
