Report said that a group of more than 20 firms comprising crypto, finance, technology, energy, and non-government organizations has banded together to focus on the environmental impact of cryptocurrency.
It has been reported that the Crypto Climate Accord, inspired by the 195-signatory Paris Climate Agreement, said that it aims to address the “large and growing energy consumption of cryptocurrency and blockchain, and the climate impact of their energy use.”
Launched by nonprofits Energy Web Foundation, the Rocky Mountain Institute, and the Alliance for Innovative Regulation, the group’s partners include high-profile firms in the crypto space like blockchain-based payments company Ripple, Canadian mining firm Hut 8, digital asset investment firm CoinShares, Ethereum software company ConsenSys, and others.
The group said:
“Industries from across the global economy are beginning to decarbonize their operations. We can do the same in crypto. We have the opportunity to decarbonize the industry.”
However, among the Crypto Climate Accord’s long-term goals are transitioning all of the world’s blockchains to be powered by 100% renewable energy by the United Nations Framework Convention on Climate Change in 2025 and developing an open-source accounting standard for measuring emissions from the cryptocurrency industry.
The group has also set a target for the entire crypto industry to become carbon net-zero by 2040, as refers to a time when human-made carbon emissions can effectively be removed from the atmosphere.
Bitcoin has an annual carbon footprint that rivals Hong Kong’s. Will this alliance be able to effectively address crypto's impact on the environment? https://t.co/s8tuZuRI1o — Cointelegraph (@Cointelegraph) April 8, 2021
Likewise, many fintech and crypto firms have made public pledges for greener initiatives as the environmental impact of digital assets becomes more apparent. Last year, Ripple announced it would be committing to becoming carbon net-zero by 2030 by partnering with the Energy Web Foundation and investing in carbon-removal technologies.
We’re proud to join the @CryptoClimAcc alongside @energywebx, @UNFCCC, @AIRinnovate, @Consensys, @CoinSharesCo, @RockyMtnInst & more. Together, we can decarbonize all #blockchains! https://t.co/YY5wGX5wkl — Ripple (@Ripple) April 8, 2021
“The Crypto Climate Accord recognizes that financial technologies — including blockchain and cryptocurrency — are well-positioned to lead global finance’s commitment to a sustainable future. Recent studies suggest that now through 2023 are the most critical years of adoption growth for crypto and we know it will be more difficult to ‘reverse engineer’ a systemic characteristic like sustainability the longer we wait.”
As per the sources, if “decarbonizing the cryptocurrency industry in record time” is the goal of the Crypto Climate Accord, the challenges it faces will be comparable to those of signatories to the Paris Agreement, which aims to prevent the Earth from warming more than 1.5 degrees Celsius above pre-industrial levels.
Reports suggest global carbon dioxide emissions fell by 6.4% last year as many industries were slowed or stopped by the impact of the pandemic.
Thus, this still fell short of the 7.6% cut the United Nations Environment Programme estimated was required to meet the numbers set in the Paris Agreement.