The Road to Green Transformation in the Crypto Industry Can Be Done in Three Steps

This article provides a preliminary discussion on how encryption companies can effectively carry out carbon inventory, carbon reduction and carbon offset.

Core view.
Green and low-carbon goals are key to global environmental governance, and it has become a growing trend for the crypto industry to join green initiatives.

Switching to renewable energy can significantly reduce carbon emissions, but it will not achieve carbon neutrality, and crypto enterprises still need to do more.

To achieve carbon neutrality, crypto companies need to develop and implement carbon inventory, carbon reduction, and carbon offset programs in sequence, and voluntary, decentralized, and diverse decarbonization activities will help achieve green goals more efficiently and easily.

The huge wealth effect of the crypto market has attracted unprecedented investor attention over the past year, while also raising global government and societal concerns about the energy consumption of cryptocurrencies. ESG pressure and the regulatory impact of global carbon neutrality targets have been one of the main reasons for the recent decline in the cryptocurrency market.

On the positive side, crypto markets have begun to respond positively, especially the crypto mining industry, which has borne the brunt of the decline, with a shift to renewable energy and a commitment to other measures to meet carbon neutrality targets.

This article will combine existing examples and seek to sort out the cognitive consensus and concrete ways of green and low-carbon transition in the crypto market, especially to provide a valuable “green guide” to mining for Chinese miners who will soon turn overseas.

  1. Green in Action
    Global Action
    Managing CO2 emissions is key to the global response to the climate challenge, and a key focus for crypto practitioners. Let’s start by understanding the policy environment for global carbon action.

Globally, the achievement of carbon dioxide limitation targets relies heavily on carbon pricing mechanisms and the application of low-carbon technologies. The more established carbon pricing instruments are “carbon taxes” and “carbon markets,” and the two are rarely used in combination. The former means an environmental tax on carbon emissions, which has been implemented in more than 20 countries or regions, including Canada, Australia, the United Kingdom, and the United States. The latter refers to the establishment of a market pricing mechanism for carbon allowances, and countries or regions such as the European Union, China, and South Korea are adopting carbon trading as a means.

In Europe and the United States and other regions with the most mature environmental awareness and environmental legal system, there are a large number of authoritative tripartite service organizations that can provide a range of consulting and notary services for crypto-enterprise’s.

In Europe, for example, there is the world’s most mature carbon emissions trading system (EU-ETS), the largest carbon trading market, European Climate Exchange (ECX), GreenX (CME), European Energy Exchange (EEX), Nordic Power Exchange (Nord Pool), the British Standards Institute (BSI) has developed the world’s first carbon neutral certification PAS 2060 international standard, the UK Carbon Disclosure Project (CDP) provides the classic standard for carbon disclosure methodologies and corporate processes, and there are many tripartite organizations that offer carbon offset programs, such as ImpactScope, based in Geneva.

Europe has now abolished offsetting mechanisms while implementing a market stabilization reserve mechanism to reduce carbon allowances, plans to implement paid allocation of all allowances in 2027, and is exploring the implementation of a harmonized carbon tax to compensate for the shortcomings of the EU carbon trading mechanism.

Unlike Europe’s more stringent and unified carbon management status quo, the U.S. is implementing a regional voluntary emissions system and a total control trading system. The U.S. is divided in its approach to environmental protection, with the East and West Coast states being more supportive of environmental protection, but the Midwestern energy states being more resistant, such as Texas, which gathers many crypto companies, having appealed against carbon emission limits.

In the U.S., the agencies responsible for allowance auctions include the Regional Greenhouse Gas Reduction Initiative (RGGI) and the Western Climate Initiative (WCI), the carbon registry responsible for carbon footprint operations include the U.S. Climate Registry (TCR), the Climate Action Reserve (CAR) responsible for carbon offsets, the American Carbon Registry (ACR) responsible for carbon registries, the Verified Carbon Standard Association (VCSA) responsible for carbon standards, and the Chicago Climate Exchange (CCX) and the Green Exchange (GreenX) responsible for trading.

The Asia-Pacific region is in the initial stage of development in this area. China, for example, has set a “3060” target for carbon peaking and carbon neutrality (i.e., to reach carbon peaking by 2030 and carbon neutrality by 2060), and the national carbon trading system is scheduled to open in June 2021. Currently, China’s carbon management efforts are more aligned with EU standards. However, given China’s current policy on cryptocurrencies, this will not be explored in depth here.

Of course we need to see that the existing decarbonization policy is formulated and implemented more for industry and does not include crypto activities in the reference system, so it is possible for crypto companies to either take the initiative across regions to carry out actions with clearer green standards or to declare green actions to relevant local institutions or organizations. This current lack of green standards in the crypto industry has instead given the crypto industry the possibility to implement more green solutions, which is also a sign of decentralization.

The crypto industry is taking action
More and more crypto organizations are getting into action and getting into this green initiative, trying to provide solutions.

Crypto Climate Accord organization plans to achieve fully renewable energy operations

Formed by the Energy Web Foundation, the Rocky Mountain Institute, and the Alliance for Innovative Regulations, with Ripple, The Crypto Climate Accord, formed by the Energy Web Foundation, Rocky Mountain Institute, and Alliance for Innovative Regulations, with 45 members including Ripple, CoinShares, Compass Mining, and others, promises to make the global cryptocurrency industry net-zero by 2030.

Crypto Carbon Accord Commits to Carbon Neutrality by 2040

The Crypto Carbon Accord, formed in May of this year, promises to make the cryptocurrency mining industry carbon neutral by 2040.

Wrapped Launches Green Bitcoin

Wrapped launched EcoBTC, a bitcoin-based green asset on the Celo blockchain.

In addition, there are a number of crypto companies that are proactively catering to this trend in their own different ways.

OSL Exchange Buys Carbon Credit Token CET

OSL, the first approved exchange in Hong Kong, announced the purchase and cancellation of voluntary carbon credits on the AirCarbon Exchange (“ACX”) to fully offset the 647-ton carbon footprint of the BC Group, to which it belongs, for the three-year period from 2018 to 2020.

Listed miner Argo to launch pure clean energy mining pool

Argo Blockchain said it will start hydroelectric power to open a new bitcoin mining pool.

Greenidge Announces Carbon Neutrality in Early June

Bitcoin miner Greenidge, which has invested in Regional Greenhouse Gas Initiative (RGGI) quota purchases since 2017, in addition to renewable energy projects, claimed to have achieved carbon neutrality at the beginning of June this year.

Crypto market maker GSR commits to full operational carbon neutrality

Crypto market maker GSR has committed to buying carbon credits from the Fortaleza Ituxi project, and its mining operations are already partially powered by hydropower.

Bituminous Pitches Low Carbon Energy Mining Pool

Bit Mining (BTCM.US) has signed a contract with Dory Creek, a wholly owned subsidiary of Bitdeer (Bitdeer, lnc), to invest in a 57.2 megawatt mine in Texas that will use more than 85% clean and low-carbon energy sources.

It is undeniable that although people from all walks of life in the crypto market are divided and controversial about the so-called waste of fossil resources and emission of greenhouse gases (GHGs), the trend of green action is unstoppable.

Taken together, the various measures above include various means such as establishing organizational agreements, switching to clean energy, investing in the development of renewable energy projects, purchasing carbon credits, and developing low-carbon token projects. We will focus on these specific measures in Part III.

  1. Green Consensus Discussion
    This section discusses the carbon neutral background of the current green initiatives and points out some of the misconceptions.

In order to prevent global warming, all countries in the world signed the Paris Climate Agreement in 2015, agreeing that in order to reach the goal of keeping the global temperature rise within 2 degrees by the end of this century and striving to achieve 1.5 degrees, all countries must propose and reach their own carbon reduction and carbon neutral solutions for this purpose.

Among them, carbon neutrality refers to the offsetting of carbon dioxide emissions directly or indirectly generated by human activities through afforestation, energy saving and industrial restructuring, so as to achieve “zero emission” of carbon dioxide.

Against this backdrop, criticism of crypto mining as an energy hog and greenhouse gas emitter is rampant. For environmentalists who question the value of the Bitcoin network in particular, maintaining such a large power consumption will consume large amounts of non-renewable energy and emit large amounts of carbon dioxide, which in turn will cause air pollution and rising temperatures.

According to Digiconomist statistics, the current electricity consumption to mine one bitcoin is 1595.48kWh, with a carbon footprint of 757.85kg of CO2; bitcoin emits about 62.61 tons of CO2 per year, comparable to the carbon footprint of Serbia and Montenegro, and consumes about 131.80 TWh of electricity, comparable to Argentina’s electricity consumption.

Figure 1 Bitcoin Energy Consumption Index

The Road to Green Transformation in the Crypto Industry Can Be Done in Three Steps

Source: BitcoinEnergyConsumption

The green transition is not as simple as switching to green energy. Crypto companies first need to answer the following questions if they are to improve the negative public and regulatory perceptions.

What is green energy? What clean energy sources are available? What clean energy is available for crypto activities?

Has the carbon neutrality goal been achieved by using 100% clean energy?

Is there a low-cost, sustainable green transition solution for reference?

What is clean energy
There is no unified definition of green energy, or clean energy, at home and abroad, but the basic meaning contains three points: firstly, it refers to the technical system of energy utilization; secondly, the cleanliness should meet certain emission standards; and finally, it also emphasizes the economy of practical application.

According to the expression of “Clean Energy Blue Book – International Clean Energy Industry Development Report (2018)”, renewable energy generation such as hydro, wind and solar energy, as well as nuclear energy and natural gas belong to the category of clean energy, but fossil energy such as clean coal and clean oil should be excluded.

We see that some mines, exchanges, investment institutions, etc. have started to use clean energy and participate in investing/developing renewable energy projects, which are inevitable paths for green transformation.

Clean Energy and Carbon Neutrality
Many news reports mention that crypto companies have adopted green energy mining and achieved carbon neutrality goals. This is actually a misconception, as switching to clean energy for mining may significantly reduce carbon emissions, but it does not result in zero carbon emissions, much less carbon offsets.

According to an article published by Stanford professor Mark Z. Jacobson, “Evaluation of Nuclear Power as a Proposed Solution to Global Warming, Air Pollution, and Energy Security,” solar, wind, ocean, and geothermal energy have carbon emissions that are more than 80 percent lower than coal power with the same generation capacity, and natural gas has the highest carbon emissions of any clean energy source. In terms of carbon emission equivalent intervals, natural gas may even surpass coal power.

Table 2 Carbon dioxide emissions from various types of energy generation

The Road to Green Transformation in the Crypto Industry Can Be Done in Three Steps

Source: stanford.edu

Thus, the use of renewable energy sources will significantly reduce carbon emissions, but it does not appear that clean energy sources such as nuclear and natural gas will reach a point where carbon emissions can be significantly ignored.

Although encryption activities cannot achieve a zero carbon footprint at this stage, this does not prevent us from using a variety of options to maximize the reduction of carbon emissions; after all, any economic activity has an energy cost, and we should explore the reality of large and small costs, rather than choking on them and turning them off.

It is foreseeable that the pace of clean energy to replace fossil energy is accelerating, the cost of decarbonization is getting lower and lower by means of technology, and a series of green action combinations being implemented by many practitioners will seek the optimal solution for problem 3.

3、The road to green transformation
In researching this topic, we refer to existing green examples in the crypto industry and analogous low-carbon initiatives of Internet companies such as Amazon and Microsoft. Although a complete and unified green consensus has not yet been formed, this does not prevent us from proposing a universal solution framework and combination of solutions.

Generally speaking, crypto companies need to understand the relevant policies or public opinion requirements in their operating or registered locations, account for their carbon footprint over a period of time, and invite third-party organizations to conduct audits and verifications, then develop targeted carbon reduction and carbon offset programs accordingly, and issue decarbonization commitment statements and realization statements according to the actual situation.

Step 1: Carbon Inventory
Carbon footprint inventory is the basis for developing practical and concrete carbon emission reduction and carbon offset programs.

Encrypted enterprises can commission external certification agencies or conduct their own emission source inventory and data aggregation, measure the carbon emissions in the recent period, and invite third-party qualified institutions to inspect.

The range calculation of carbon emissions generally refers to the range 1, range 2 and range 3 proposed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD) in the Greenhouse Gas Protocol (GHGP).

Specifically for crypto companies, this can be understood as

Scope 1: Emissions come directly from the operation of crypto projects.

Scope 2: Emissions come from the generation of purchased energy (mainly electricity).

Scope 3: Emissions include all other activities outside the direct operations of the crypto company.

When calculating the carbon footprint of the crypto company’s activities, the focus should be on scope 2, which accounts for the sources of energy consumption for power and the corresponding carbon emissions.

From the application of global carbon footprint certification standards, there is only a public specification of PAS 2060 published by British Standards Institution (BSI) and another international standard ISO 10468 on carbon neutrality is still in the early draft stage. We can develop our own carbon management and carbon neutral software system according to the common standards such as PAS 2060 and ISO 10467, or we can directly commission an organization licensed by this standard to carry out carbon footprint measurement and notarization work.

Encrypted companies can either hire regional tri-party carbon footprinting agencies or well-known large consulting services to provide better endorsement effect. These agencies not only undertake carbon footprint measurement, but also often provide notarization and auditing, and even carbon offsetting services. At present, we can refer to Carbon Trust, British Standards Institution (BSI) and Intertek Group (ITS) in the UK, SGS in Switzerland, TÜV Rheinland and DEKRA in Germany, Bureau Veritas in France, Applus+ Laboratorie in Spain, UL in the US, and China Quality Assurance (CGA) in China. (UL), China Quality Certification Center (CQC) in China, the Manufacturers Association of Hong Kong, China Testing Center (CMA Testing), Low Carbon Asia (CCA), as well as their branches or authorized institutions around the world.

Take the e-commerce giant Amazon (Amazon) as an example, Amazon built its own carbon footprint data analysis system. Amazon refers to the Greenhouse Gas Accounting System (GHG Protocol) international standard, and uses the product life cycle assessment (LCA) evaluation model and Amazon Web Services (AWS) big data technology to process operational and financial records to calculate the carbon footprint.

For its part, APEX, a certification body, independently audits and validates the accuracy of Amazon’s reported GHG emissions and the underlying systems and processes used to collect, analyze and review the information, and issues reports in accordance with the ISO 14064-3 validation protocol.

Among the five accounting models Amazon has developed for this purpose, the one relevant to the crypto mining industry is the Electricity Emissions Model. Amazon collects usage data from facilities around the world and processes data from utility invoices to understand electricity and fuel usage. When actual electricity usage data is not available, electricity usage is estimated by dividing the paid electricity rate (in USD) by the regional average electricity rate (USD/kWh). Carbon emissions were then calculated by multiplying the electricity consumed by the facility (kWh) by an emission factor associated with the regional grid mix (CO

In addition to the carbon emissions calculation method that can be referenced above, crypto companies can also use a more simplified model to measure their carbon footprint.

For example, New York-based crypto exchange Gemini calculated the number of bitcoins in its custody as a percentage of the network-wide circulating supply, and then referenced the upper average of the annual average bitcoin electricity consumption published by the Cambridge Bitcoin Electricity Consumption Index (CBECI) and the Digiconomist Bitcoin Energy Consumption Index, from which it derived the electricity associated with Gemini’s use of the bitcoin network, and then multiplied by Digiconomist’s publicly available annual carbon footprint of the Bitcoin network to estimate Gemini’s carbon footprint for the last six months, and finally measured the cost of carbon emissions from its use of the Bitcoin network at a cost per ton of CO2, which is about $4+ million.

In short, if the place of registration or operation has more explicit green regulatory requirements, then you should carry out carbon reduction work in accordance with the local designated tripartite agencies, otherwise you can hire your own agencies that meet the standard permit qualifications described above, or even measure your own carbon emissions according to the relevant models and take the initiative to lean closer to the more explicit regulatory requirements.

Step 2: Carbon emission reduction
Carbon emission reduction is currently the most urgent work for crypto enterprises to achieve deep green, and specific measures to reduce carbon equivalent emissions include but are not limited to

Gradually using alternative clean energy sources (e.g. hydro, solar, etc.)

Investing in, developing or participating in green blockchain projects.

Using machine facilities with higher energy efficiency ratios.

Participating in more energy-efficient consensus mechanisms and solutions (e.g. POS mechanisms, etc.).

We focus on the first two points below.

1) Use of clean energy
The biggest contributor to carbon reduction is the use of alternative, clean energy sources. Among the overseas destinations laid out by Chinese miners, in addition to the traditional thermal power-based Central Asia, Northern Europe, North America and Russia are rich in clean energy, and these places are also the regions where crypto mining is more active and concentrated.

The clean energy most used by the crypto mining industry is currently hydropower. According to a study by the Cambridge Center for Alternative Finance (CCAF), about 76% of crypto mining uses renewable energy, with hydroelectric power accounting for 62% of the total. Hydropower is available in a wide area and is cheap per unit, with Sichuan, China, accounting for 10% of all mining arithmetic on the grid during periods of abundant water. In addition to China’s Yunnan, Guizhou and Sichuan regions, the Caucasus, Eastern Canada and Northern Europe are also rich in hydropower resources.

We have compiled a detailed table of clean energy for this purpose, as follows: the five Nordic countries are rich in hydropower, geothermal energy and wind energy, and the North American region, especially Texas, is richer in natural gas and wind energy, all of which are suitable for Chinese miners to go to sea and transform into green mining areas. As for nuclear energy, the threshold for its use is too high, while solar energy, biomass, ocean energy and other power generation industry maturity is low, and there is no possibility of large-scale use in the short term.

In short, purely from the perspective of green energy, Northern Europe, North America, Eastern Europe, etc. may be more suitable regions for mining.

2) Investing, developing or participating in green blockchain projects
We have noticed that more and more crypto institutions and practitioners are investing, developing or participating in green blockchain projects. There are no uniform standards and requirements for these activities, but these efforts are helping to enhance the decarbonization effect of the industry.

Ripple has committed to reducing carbon emissions to zero by 2030. The company has created a tool that allows other blockchain companies to purchase clean energy to power their networks. the XRP ledger foundation will be the first to use the tool to offset XRP’s carbon emissions.

Former Bitcoin.com CEO Stefan Rust launches Sonic Capital, a venture capital fund to invest in blockchain startups with carbon credits.

Wrapped combines Bitcoin and MOSS.Earth Carbon Credits (MCO2) in one digital asset to launch Eco BTC (eBTC). eBTC users can trade using a 1:1 backed asset in Bitcoin.

The Universal Protocol Alliance announces the launch of Bitcoin Zero (BTC0), a carbon-neutral bitcoin issued on the ethereum network and implemented through a wrapper. Bitcoin Zero combines 1 BTC with every time BTC0 is minted certified from Verra and other international standards bodies of the REDD+ rainforest project combined with 10 tons of CO2 recovered.

The Sustainable Bitcoin Standard Initiative (SBS, Sustainable Bitcoin Standard Initiative) has undertaken a Green Bitcoin Standard certification effort and plans to issue SBCs (Sustainable Bitcoin Certificates) for bitcoins produced using electricity from renewable sources and carbon offset for bitcoins produced from electricity from non-renewable sources. SBCs will be issued.

U.S. mobile payments giant Square announced a $10 million Bitcoin Clean Energy Investment Program to promote the use of clean energy in Bitcoin mining.

Step 3: Carbon Offsets
As mentioned earlier, even a complete switch to clean energy is a de facto reduction in carbon equivalent emissions and does not fully achieve the zero carbon goal, so many crypto companies can also participate in various carbon sequestration and carbon capture initiatives to offset the carbon emissions that cannot be reduced.

These options include, but are not limited to

Direct purchase of corresponding environmental interests, such as carbon allowances (carbon credit) or carbon sink assets (carbon sink asset).

Paying a tax on carbon emissions (carbon tax).

Directly investing, developing or participating in renewable energy projects, carbon capture and storage (CCS) projects.

Participating in ESG principle activities such as afforestation and wetland restoration.

It should be added that both carbon emission reduction and carbon offset should be certified and publicized through a third party organization. For example, crypto mining companies in North America that plan to purchase offset credits (ROCs, each ROC representing a certified reduction or sequestration of one ton of CO2) at the Offsets Marketplace disclosed by the Climate Action Reserve Program (CAR) should first obtain a GHG emissions inventory report from a verifying agency, which should be verified by a CAR-affiliated organization The California Registry should approve and publish the report, and then a third-party organization should certify its carbon neutrality compliance to exclude the influence of the fairness of the consultation and certification by other organizations in the previous steps, and disclose it in a timely manner for public scrutiny.

Figure 2 Details of carbon credit cancellation purchased by OSL Exchange

The Road to Green Transformation in the Crypto Industry Can Be Done in Three Steps

Source: Verra

However, in practice, crypto enterprises do not need to make carbon compensation work too complicated and cumbersome, because decarbonization work is in the early stage of development, more voluntary, decentralized and diverse, as long as it can reduce the amount of carbon emissions, try all kinds of carbon compensation work as much as possible.

1) Purchase of environmental rights and interests such as carbon quotas or carbon sink assets
Let’s go back to the topic of purchasing carbon equity. In addition to directly purchasing carbon quota products from official trading institutions (cap-and-trade market), more options for crypto enterprises are to purchase carbon credits from green organizations with higher credibility.

Because the price of carbon from official organizations is higher and highly volatile, the preferred option for crypto firms is to directly purchase unofficially issued carbon products that are less costly. As shown in the chart below, the carbon price in the U.S. California market has remained above $160/ton for the past two years, while the unofficial carbon price is mostly below $20/ton.

Figure 3 Monthly unit price and turnover of carbon credit sales in California, U.S.

The Road to Green Transformation in the Crypto Industry Can Be Done in Three Steps

Source: ca.gov

For example, Greenidge, a New York-based bitcoin miner and power plant, has invested in Regional Greenhouse Gas Initiative (RGGI) allowance purchases since 2017.Greenidge also recently announced that it began offsetting greenhouse gas emissions from bitcoin mining on June 1 by purchasing a portfolio of carbon offset credits, with each project in these carbon offset credit portfolios subject to reviewed and certified by the American Carbon Registry (ACR), Climate Action Reserve (CAR) and Verra.

Another way to offset carbon is to purchase carbon tokens issued by a blockchain-based network, and these tokens should be verifiable, quantifiable, and destroyable. Typically, when each token is purchased and destroyed (sent to an inaccessible address), it is equivalent to offsetting 1 ton of CO2.

For example, hedge fund One River filed with the SEC to create a carbon-neutral Bitcoin ETF, which according to the prospectus will purchase Ether-based MCO2 crypto tokens from environmental platform MOSS.Earth.

In addition, crypto hedge fund Argentium, crypto market maker GSR, and Mercado Bitcoin, the largest exchange in Latin America, have also purchased MCO2 on MOSS.Earth, committing to carbon neutrality in their operations.

MCO2 is a carbon credit token issued by the MOSS platform, and the credibility of the coin comes from many tri-party certified and audited Amazon rainforest conservation projects, including Verra’s VSC standard, the Climate Community Biodiversity Alliance’s (CCBA) CCB standard, and others.

Since its launch, MCO2 has remained below $10 per unit for a long time, and the price fluctuation is much smaller than the carbon price in the California carbon market.

MOSS is registered with two platforms, the main platform (https://moss.earth/) is open to individual and physical users, while the B2B platform (https://business.moss.earth/) exclusively serves institutional users. Also according to published reports, MOSS claims to be the largest carbon credit platform in the industry today, with 20% of the global market share.

According to an audit report issued by US accounting firm Armanino LLP, the token operates roughly as follows: Moss purchases carbon credits from projects certified under the VCS standard, and in Verra Resistry, Moss allocates the carbon credit batches to subaccounts of retired credits, and active credits sub-account, the former for carbon credit allocation for the main customer retail platform and the latter for the B2B platform. Upon approval, the tokens are minted through the Moss smart contract and then transferred to Moss’s treasury wallet address and then to customer wallets when purchased. the Moss.Earth smart contract are updated with the number of tokens.

Figure 4 MCO2 token transfer record on the ethereum chain

The Road to Green Transformation in the Crypto Industry Can Be Done in Three Steps

Source: Etherscan.io

MCO2 is not the only carbon coin available, there are also UPCO2 (Universal Carbon), a carbon credit token released by the Universal Protocol Alliance, and four carbon credit tokens released by the AirCarbon exchange.

2) Paying Carbon Emissions Tax
This is an indirect green transition solution. In the available publicly available information, we only see that cryptocurrencies are subject to income tax, profit tax, VAT, consumption tax, etc. as specific virtual goods or assets, but we do not find information about crypto companies paying carbon tax.

According to simulations in the paper “An Assessment of Carbon Emissions and Sustainability Policies for Bitcoin Blockchain Operations in China,” published in Nature Communications, carbon taxes have limited effectiveness for the bitcoin mining industry.

However, in the view of many environmentalists, even if crypto companies voluntarily pay a carbon tax, this is still a self-imposed penalty of one cup, a typical “greenwashing” behavior, and not truly green.

However, in the long run, global green policies may force crypto companies and other emerging digital companies to make significant changes in their tax policies, thus influencing them to pay the fee in countries or regions where carbon taxes are implemented.

3) Invest, develop or participate in green energy projects, carbon capture and storage (CCS) projects
We see many crypto companies or individuals currently investing, developing or participating in renewable energy projects directly. These spontaneous actions are not intended to set the standard for greening the industry, but rather to better implement low-carbon goals based on the normative preferences for behavior in their respective fields.

Canadian blockchain asset management platform Invictus Capital established the Emerging Markets Solar Fund to develop utility-scale greenfield solar projects.

NFT project CryptoTrunks plans to donate a portion of the proceeds from genesis trees designed by crypto artist Reuben to Bull Run, a reforestation program in Belize.

Two exchanges, FTX and BitMEX, have announced their commitment to carbon neutrality, with FTX saying it will donate $1 million to offset the blockchain resources it uses and BitMEX pledging to donate $0.0026 for every $1 of blockchain fees it generates to offset its carbon footprint.

In Summary
In the context of global promotion of carbon peaking and carbon neutrality, green transformation is an inevitable choice for the compliance and healthy development of the crypto industry. This article has made a preliminary discussion on how crypto companies can effectively carry out carbon inventory, carbon reduction and carbon offset, but this may just be a beginning.

On the one hand, crypto enterprises need to balance financial planning, clean energy usage ratio, carbon credit purchase ratio, etc., and develop a set of flexible and effective response plans to orderly promote carbon information verification, carbon data management, emission reduction and offset plan implementation, and public relations communication.

In fact, green transformation is still in the early stage of initiation, self-regulatory green actions are not only worth encouraging and advocating, but also can explore diverse green solutions and play a positive feedback role of leading demonstration.

On the other hand, carbon standards and carbon management systems combined with blockchain technology will greatly accelerate the pace of our transition. The current green transformation standards and management solutions are born out of the centralized world, which have the defects of node centrality, limited application boundary and different standards. Blockchain naturally has the characteristics of transparency and openness, non-tamperability and decentralization, and green blockchain standards can be explored in the future to make green actions transparent and open, traceable and verifiable on the chain, so as to achieve low-cost and high-efficiency green results.

For example, Energy Web is currently working on developing a global standard for tracking Bitcoin’s carbon footprint, which is still far from the ultimate green goal, but the future is promising.

Figure 5 Simple questionnaire to derive carbon emissions and the ability to donate carbon credits online

The Road to Green Transformation in the Crypto Industry Can Be Done in Three Steps

Source: Climate Vault

Bitcoin has experienced too many questions and suppressions since its birth, but the consensus of blockchain value it leads is getting stronger and stronger. If we enlarge the historical perspective of observation, the goal of green bitcoin and green crypto industry should be a long way to go, but the line will be there. We expect this day to come soon, and this day will surely come.

Some references.

http://152.136.34.60/html/2014-07/21/nw.D110000xxsb_20140721_4-A2.htm

http://fmve4.cn/k2I5U

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/the-road-to-green-transformation-in-the-crypto-industry-can-be-done-in-three-steps/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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