Issue #003: One red, three green
Dear subscriber,
Happy new year, and welcome to The Bitcoin ESG Forecast #003.
Last month we introduced three new metrics which have been helping Bitcoin inch closer to acceptance among institutional ESG investors. This month features two new ESG all time highs and brings four stories together into one new “one red, three green” infographic from Dr Rian Dewhurst.
1. Fossil Fuel power down
Most people don’t know it, but Bitcoin Mining is currently the only major global industry that is powered mostly by sustainable energy. The simple reason many people think Bitcoin is mostly fossil-fuel based is that up until Q3 2022, it was. If you hear people claim it’s still mostly fossil fueled (it’s not), ask for their source. UN University’s data is three years old. Cambridge’s dataset is two years old. There are no longer any independent models or studies using contemporary data that support the thesis Bitcoin is mainly powered by fossil fuels.
2. Greener grids
After the ban of mining in China, and the effective ban in Kazakhstan, miners predominantly moved to greener grids in North America, or to sustainable off-grid sites. Globally grids are also getting greener at a rate of 0.7%/year, which means 100% electrified technologies such as eVs and Bitcoin mining have less emission intensity impact each year. Together, that mean that today, on-grid Bitcoin miners use grids that are 29% greener than they were in 2021.
3. Emission-free mining - all time high
Additional off-grid renewable mining such as Tether’s expansion into hydro mining in Latin America, the general greening of the grid, and the discovery of more off-grid methane-mitigating mining mean that the Bitcoin network is now using more sustainable energy than ever before. Sustainable mining increased 3.6% overall for the calendar year 2023, and has just hit a new all time high of 54.5%.
4. Greenhouse negative mining
Our research revealed there’s a lot more offgrid Bitcoin miners using methane emissions than we thought. In Canada and US, small oil producers have to pay to get a permit to flare stranded natgas. A source who wished to remain anonymous told us “some oil producers simply vent methane emissions directly into the atmosphere because they have worked out it’s harder to spot a vent than a flare”. We uncovered new evidence of Bitcoin mining companies reducing this environmental hazard by using vented methane to power generators that created electricity for Bitcoin mining. There’s still a CO2 byproduct, but because methane is 84x more warming than CO2 over a 20-year period, its a lot better than letting if vent straight into the air.
This means the Bitcoin network now mitigates 7.3% of all its emissions without offsets, a new all time high and the highest level of non-offset based emission mitigation of any industry.
Top Picks
The year has started on a good note:
The Financial Times wrote a thoughtful article debunking the common Bitcoin myths about its value as an investment vehicle. Stuart Kirk argues, "The more you think of bitcoin as an investment, whether in an ETF or not, its many flaws don’t differ hugely from most of the other regulated assets you own happily." Find out more>>
CoinTelegraph critically examined a widely reported study on Bitcoin water usage which used a previously debunked “per transaction” metric for measuring Bitcoin resource intensity. Their article highlighted the need to promote empirical facts about Bitcoin, check whether Bitcoin studies were using appropriate metrics, comment objectively on both positive and negative environmental externalities. Read more>>
One of Bitcoin mining's benefits is its ability to ease financial stresses in the early stages of renewable energy project deployment. Sustainability Magazine Anthropocene Magazine recently highlighted this based on a Cornell University study of the electricity generation potential for various wind and solar installations planned in the United States.
One Other Notable Highlight
Crypto Newsbytes: The Truth About Bitcoin and Its Carbon Footprint – Why Bitcoin is Green?
Trailblazers
Bitcoin recently proved how it could be an effective tool for financing development in impoverished countries, unlike international aid which is often eroded by corruption and bad governance.
That's the case in Bondo, a remote village in Mozambique, where Gridless introduced Bitcoin mining and made electricity accessible to over 1800 families. The story is told by Ian Birrell, a Bitcoin skeptic until he talked to the villagers. Read more>>
Housekeeping Notes
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See you next month.