Cryptocurrency mining undermines America's efforts to tackle the climate crisis President Biden wants to strike.
The White House announced on Tuesday that the president's proposed 2024 budget would include a Digital Asset Mining Energy (DAME) tax that would cost crypto companies 30 percent of the electricity they use to mine digital currency in the United States.
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"The high energy consumption of crypto miners has a negative impact on the environment, quality of life, and the power grids that these companies operate across the country," the statement said. “Pollution from power plants falls disproportionately on low-income neighborhoods and communities of color. Cryptominer's intense and often erratic energy consumption can drive up the price of electricity for consumers and increase risks to local power grids, which can lead to equipment overload, business interruption, and security risks.
It's amazing how much energy it takes to mine crypto, especially since most Americans probably don't know much about the practice. According to the US Office of Science and Technology Policy, crypto mining uses an estimated 36-66 million kilowatt hours of electricity by 2022. This figure represents the amount of electricity used to power all the computers in a home, or all the television sets, or, at the highest reckoning, all the lighting in homes in the United States.
Biden is not the only politician looking to crack down on crypto mining. Mon. Ed Markey (D-Mass.) and Rep. Jared Huffman (D-Calif.) introduced the Crypto Asset Environmental Transparency Act in March, which requires crypto companies to disclose all of their emissions. "If Bitcoin mining in the US emits as much CO2 as 7.5 million gas-powered cars a year, we have a problem," Marky wrote on Twitter. “The crypto industry is growing, so is the fight for climate justice. We will hold these companies accountable."
The following month, The New York Times published a worrying report on the “real costs” of crypto mining, detailing how crypto operations are putting tremendous pressure on the power grid while generating massive amounts of electricity and pollution to those around them. According to the Times, the 34 largest bitcoin mines in the United States consume as much electricity as 3 million homes.
Crypto isn't the only industry that consumes a lot of energy, but the White House noted in its statement that unlike manufacturing or other energy-intensive industries, crypto mining has no measurable economic benefits: "There is little evidence of benefits in the form of jobs or opportunities for society." economically, and research has shown that small increases in local tax revenues more than offset rising energy prices for businesses and households."
The White House says the DAME tax will generate $3.5 billion in revenue over 10 years. “The main goal of the DAME tax is to give cryptominers a fair share of the fees they impose on local communities and the environment,” said the statement.
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