How Increasing Crypto Mining Electricity Costs Could Affect Carbon Emissions

Two executives from the International Monetary Fund (IMF) suggested raising the average crypto mining electricity costs by 85% to curb carbon emissions.

IMF Proposal

IMF Fiscal Affairs Department’s deputy division chief Shafik Hebous and climate policy division economist Nate Vernon-Lin proposed a tax of $0.047 per kilowatt hour to drive the crypto mining industry to align its emissions with global goals.

Effects of Increased Tax

The higher tax could generate $5.2 billion in yearly government revenue and reduce emissions by 100 million tons annually, equivalent to Belgium’s emissions. They claimed a single Bitcoin transaction uses about the same amount of electricity as the average person in Pakistan uses in three years.

Potential Barriers and Alternatives

Hebous and Vernon-Lin also floated an AI data center energy use tax, noting that global coordination would be necessary to prevent relocation to jurisdictions with lower standards.

The IMF's proposal could significantly affect carbon emissions reduction efforts, though its success will rely on global cooperation and coordination.