Opinion

Carbon credits are a greener alternative to bitcoin, the climate doomsday machine

While bitcoin comes with an enormous carbon footprint, carbon credits serve as both a store of value and a benefit to humanity

By allocating part of their portfolio to carbon credits, investors can fund climate projects, improve air quality and aid forest-dependent communities

3-MIN READ3-MIN

Illuminated mining rigs operate inside racks at the CryptoUniverse cryptocurrency mining farm in Nadvoitsy, Russia, on March 18. Photo: Bloomberg

Charles Bedford is adjunct associate professor in the Division of Environment and Sustainability, Hong Kong University of Science and Technology.

Published: 3:30am, 23 May 2021Updated: 3:39am, 23 May 2021

The “doomsday machine” has a colourful history in popular culture and science fiction. We now have a dangerous case of life imitating art in bitcoin, which uses as much energy as its price can justify. As the price rises, more miners bring more power-hungry and powerful computers that use more energy.

That design of bitcoin, intentionally or not, has driven mining to use as much power per year as Sweden or London. The higher the price, the higher the power use. Theoretically, if the price keeps rising, bitcoin mining could consume most of the energy production on the planet.

While fossil fuel energy use and its associated carbon emissions have become a planetary problem, it has always had a social purpose – to provide food, warmth, shelter and mobility. Bitcoin does none of this; rather, it comes with an enormous carbon footprint. In today’s climate emergency, fossil fuel use must directly deliver social benefits to justify the damage to our climate and planet.