Crypto-Climate Change: Bitcoin Emissions May Push Us Above 2C In Two Decades

Capture1Created and released in 2009 by Satoshi Nakamoto, Bitcoin (BTC, XBT) embodies a very simple concept; we don’t need a centralized agency controlling our money. The Peer-to-Peer cryptocurrency uses a public ledger—a blockchain—to monitor transactions between users, thereby cutting out the central bank. Each transaction is recorded as a block and added to the blockchain. Each user keeps a copy of the ledger as a way to decentralize the system and prevent falsified transactions. As a method of transaction verification, users with the proper computer skills “mine” the blockchain. They use ASICs (Applied-Specific Integrated Circuits) to receive a blockchain and verify the transactions within. In exchange, the miner receives a small amount of BTC. This is where the issue arises.

Mining the blockchain requires a massive amount of energy. In November 2017, the BTC network consumed more energy than the Republic of Ireland. As of May 2018, Digiconomist estimated that Bitcoin usage emits 33.5 MtCO2e annually. When combined with other cryptocurrencies, these emissions rival those of countries like Sweden and Norway. Large emissions are inherent in the mining system.

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Mining is a winner-take-all game. The full reward goes to the miner who solves the puzzle first. The greater your processing power, the greater your chance of success. The more electricity you use, the faster your computer runs. As long as the reward for successfully mining covers the cost of that electricity, the practice is profitable. The Bitcoin network as a whole reinvests almost all of the BTC paid out as reward into its electricity consumption.

As I write this, a single Bitcoin (BTC) is valued at $5,651.14. The reward for successfully mining a block is 12.5 BTC (approx. $70,600.00) plus any transaction fees that occurred during the time it took to mine the block (approx. $2500). This process occurs every ten minutes. The system rewards miners for using as much electricity as is feasible and penalizes those miners that don’t.

Although it is hard to predict the rise and fall of cryptocurrencies, their use may return to popularity. On November 14, 2018, Bitsane, a trading platform, released a public announcement that it had officially listed USDT (Tether) for trade. USDT is known as the digital dollar and the first stable crypto-coin. It is backed by the US Dollar and provides an easy method for liquidating cryptocurrencies, making them more tradable and, perhaps, priming them for the wide-use that fans have hoped for.

The blockchain also has the potential to revolutionize climate change action. Groups such as the Blockchain Climate Institute have embraced this technology and have advocated for its use in climate finance and as a reporting mechanism. In a new book, Transforming Climate Finance and Green Investment with Blockchains40 experts explore its applications in implementing the Paris Agreement. The topics it covers include blockchain applications in renewable energy smart grids, climate finance transfers, clean technology transfers, carbon markets, and the enforcement of green finance regulations. These topics will also be discussed in various side events at COP24. As widely distributed ledgers, blockchains are “trust machines” that can scale and speed up vital climate actions in the near future.


UK clean energy milestone

UK coal fired electricity graphThe United Kingdom generated 100% of its power from sources other than coal last Friday.  This day made history, the first time since 1882 that the UK had not relied on coal for electricity production for a continuous 24 hours. National Grid spokesman Sean Kemp told the New York Times that this marks “a kind of end of an era.” 

Coal consumption has steadily declined in the UK, which has participated in the UNFCCC and Kyoto Protocol as a member of the EU.  Since 2012, two-thirds of Britain’s coal-fired power generating capacity has been closed. In 2012, coal accounted for 40% of electricity production.In 2015, that statistic dropped to 23% and one year later, to 9%. The UK is aiming to phase out coal entirely by 2025. When it does, it will join nearby Belgium, Norway, and Switzerland, and Vermont and Idaho* across the pond, as coal-free power generators.

* We have to drop to state level jurisdictions in the United States, because the US overall still sources 30% of its electricity from coal.


The end of gas-fired cars?

oslo downtownNorwegian Liberal Party MP Ola Elverstuen announced today that Norway’s four leading political parties have agreed on a ban of gasoline-powered cars by 2025. “After 2025 new private cars, buses and light commercial vehicles will be zero-emission vehicles. By 2030, new heavier vans, 75 percent of new long-distance buses, 50 percent of new trucks will be zero emission vehicles.”

Norway already has a good leg up on this transition.  Approximately 24% of its cars are electric. Oslo has debated banning cars completely (including e-vehicles) in downtown, while building 35 miles of bike lanes by 2019 to complement its public transport array of buses and trams.  The national government has provided incentives for purchasing e-vehicles for several years, including tax exemptions, extra parking, and bus-lane use.  Nudging consumers in this climate neutral direction is made easier by Norway’s copious hydroelectric power (96% of its electricity production energy mix, according to IEA). Consequently, the Tesla or Nissan Leaf has been the country’s top selling vehicle.

Nonetheless, today’s announcement has made car manufacturers see green – kroner, that is. Tesla CEO Elon Musk praised it, calling Norway an “amazingly awesome country.”


Clean cars, clean energy

electric carThis piece in Bloomberg news, The Dirty Road to Cleaner Cars, captures well the conundrum of cleaning up vehicular emissions.  22% of US CO2 emissions come from the transportation sector.  (This number is17% worldwide.)

Tesla set records when it launched its Model 3 in April, racking up more than 400,000 reservations for the $35,000 sedan since then. So it’s clear that there is a level of consumer awareness of, and demand for, reducing tailpipe GHG emissions.

But while electric cars are part of the solution – especially in sparsely populated locations, where mass transit is not feasible (like rural Vermont, where vehicular emissions comprise 26% of our carbon footprint) – they can only be as clean as the source of the juice that fuels them.

Eric Roston writes “with the solar, wind, natural gas, and (still potential) nuclear revolutions, the metabolism of the energy system is accelerating. Electric cars lead the parade.”

For Jeffrey Sachs of Columbia University, electric cars are just one of three ways of cleaning up the US energy system.  He first points to improving the efficiency of fossil fuel-generated electricity while also increasing zero-carbon power as quickly as possible before plugging buildings and vehicles into this clean(er) electric power grid.  His mantra? “Clean electricity, and electrify everything you can.


Are US COP21 pledges in trouble? UPDATE

IMG_24022/19/16 UPDATE:  Since my post on Monday, Todd Stern, U.S. Special Envoy on Climate Change, has weighed in.  Speaking from Brussels, where he was meeting with the EU’s Climate and Energy Commissioner, Stern was quoted as saying “it is entirely premature, really premature to assume the Clean Power Plan will be struck down but, even if it were, come what may, we are sticking to our plan to sign, to join. We’re going to go ahead and sign the agreement this year.”  He pointed out how different the situation President Obama faces when signing the US on to the Paris Agreement than President Clinton’s support of the Kyoto Protocol that was then abandoned by his successor, President George W. Bush. “Paris was seen as such a landmark, hard-fought, hard-won deal that, for the U.S. to turn round and say we will withdraw, that would inevitably give the country a kind of diplomatic black eye that I think a president of any party would be very loath to do.”  He added:  “We think we are going to prevail in the court but we are going to go ahead and sign the agreement this year. Period. And we are not in any way going to back away from our 2025 targets.”
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obama at COP21This has been the question of the week in the US environmental community (and to some degree, in the international community as well).

The US Supreme Court granted a stay on Tuesday to the plaintiffs challenging EPA’s authority to devise the Clean Power Plan (CPP) under its Clean Air Act rulemaking authority.  In Paris and at home, the CPP has been described as the cornerstone of US pledges under the Paris Agreement.

While a stay is only a procedural decision that stops implementation of a challenged law during litigation, the fact that five out of nine SCOTUS justices granted it caused a collective gasp last Tuesday night in the enviro law community.  Why?

First, and foremost, no one was expecting it.  The plaintiffs’ motion for a stay had already been denied by the D.C. Circuit (which will hear the case on the merits in June).  This ruling was accepted by both sides of the lawsuit as well grounded in precedent.  In fact, many saw the appeal to the Supreme Court as a “hail Mary” pass.  (No Cam Newton jokes here.)  Second, the stay indicates that at least five justices think that the plaintiffs could be harmed by complying with a rule that, when it inevitably arrives at the Supreme Court after the D.C. Circuit’s decision, may be held invalid.

Reading the blogs and Tweets of the last six days, it’s safe to say that the jury is out on what this SCOTUS decision means for the CPP and for the Paris pledges. One slice of expert opinion talks everyone off the ledge by reminding us that it’s just a short-term procedural victory, not a decision on the merits.  David Doniger of the Natural Resources Defense Counsel (NRDC) embodies this effort in this interview.

On the impact of the stay at home, there’s a difference of opinion.  The Washington Post reported that “about 48 hours after the court’s decision, major utility companies are reacting to the move with a collective shrug.”  The largest trade association of electricity providers, Edison Electric Institute, was quoted saying that “electric utilities are investing in clean energy and pursuing energy efficiency” regardless of legal challenges to the CPP — even companies, like AEP, who are listed among the plaintiffs.  Pointing to Congress’s recent renewal of clean-energy tax credits and increasing private sector investments in clean-energy projects, EPA Administrator Gina McCarthy adds that “the CPP is underpinning a [market] transition that is already happening and will continue to happen.” States like New York and California immediately called press briefings to state their continued implementation of the CPP.  A variety of state official responses, similar in tone, have been collected by the Georgetown Climate Center.  Yet Justin Pidot of the University of Colorado School of Law reads the stay as a sign that the coal industry is “too big for EPA to regulate absent an express congressional directive.”

On the international impact of the stay, observers express concern at the high level of international relations more than in the nitty gritty detail of achieving the Paris pledges.  Michael Gerrard of Columbia’s Center for Climate Change Law emphasizes that while the CPP is important to the US plan for mitigating GHG emissions, it’s not the only game in town.  Gerrard points to several facts in his blog post on Wednesday that the mainstream media hasn’t clearly picked up.  First, the CPP doesn’t fully kick in until well into the longer-range US INDC pledges.  Citing the US’s Biennial Report (a required communication under the UNFCCC) that was filed just last month, Gerrard points out that the CPP’s actual emissions reductions do not begin until 2022, and thus don’t affect the 2020 pledge of reducing 17% below 2005 levels.   In terms of the 2025 pledge of 26% to 28% reduction, Gerrard sees that the US was also relying on fuel economy and energy efficiency standards, phasing out hydrofluorocarbons (HFCs) under the Montreal Protocol on Substances that Deplete the Ozone Layer, reducing methane emissions, and for the ultimate reach, counting forests and other vegetated land masses as GHG sinks.

In contrast, Michael Wara of Stanford Law School believes the US’s international reputation for making good on the Paris Agreement pledges — already weakened by our unreliable behavior on the Kyoto Protocol — took a hit from the stay, especially given our bilateral negotiations with China and India and the role that the CPP-based reductions played in them.   (He also sees “significant ramifications” for the U.S. electric power sector given that continued uncertainty in regulating carbon hurts long-term electric utility investments, which could result in higher prices for consumers and competitive disadvantages in trade. (This post from the law firm of Stoel Reeves provides more details on this point.))

Now, with Justice Scalia’s death two days ago and the ensuing debate about who will appoint his replacement, the role of the Court in US domestic climate change law and its international commitments is even more acute.

 

 


Renewables can lead to 80% CO2 reduction in US electricity production

green-plant-in-the-light-bulbLast week’s edition of Nature Climate Change includes a new study done by NOAA and University of Colorado Boulder that helps us understand how the United States can meet its INDC pledge.

From the abstract:  Carbon dioxide emissions from electricity generation are a major cause of anthropogenic climate change. The deployment of wind and solar power reduces these emissions, but is subject to the variability of the weather. In the present study, we calculate the cost-optimized configuration of variable electrical power generators using weather data with high spatial (13-km) and temporal (60-min) resolution over the contiguous US. Our results show that when using future anticipated costs for wind and solar, carbon dioxide emissions from the US electricity sector can be reduced by up to 80% relative to 1990 levels, without an increase in the levelized cost of electricity. The reductions are possible with current technologies and without electrical storage. Wind and solar power increase their share of electricity production as the system grows to encompass large-scale weather patterns. This reduction in carbon emissions is achieved by moving away from a regionally divided electricity sector to a national system enabled by high-voltage direct-current transmission.