IPCC believes that crypto mining’s carbon emissions can be reduced.
The Intergovernmental Panel on Climate Change (IPCC), a multilateral organization for the coordination on climate-related policies, has expressed concerns about the risks posed by crypto mining.
In the latest report, IPCC identified cryptocurrency among technologies that may require greater energy demands, recommending a 50% global emissions elimination by 2030 to reduce the environmental effects of climate change.
As per the report, improvements in information storage, processing and communications technologies, including artificial intelligence can enhance energy-efficient control, reduce transaction costs for energy production and distribution, improve demand-side management, and reduce the need for physical transport.
“However, data centres and related IT systems (including blockchain) are electricity-intensive and will raise demand for energy — cryptocurrencies may be a global source of CO2 if the electricity production is not decarbonized — and there is also a concern that information technologies can compound and exacerbate current inequalities.”
Later, it states that improvement in technologies may lead to a plethora of new products and applications that are likely to be efficient on their own but may also lead to undesirable changes or absolute increases in demand for products.
This section later goes on to state:
“The energy requirements for cryptocurrencies is also a growing concern, although considerable uncertainty exists surrounding the energy use of their underlying blockchain infrastructure.”
Some people suggest that the growing carbon footprint of crypto mining can be solved through transition to Proof of Stake (PoS) consensus mechanism from Proof of Work (PoW). It will bring down the emissions as the need for massive mining farms would be eliminated.