The environmental cost of producing bitcoin places the digital asset alongside some of the world’s most environmentally unfriendly industries, according to a new study published in Scientific Reports on Thursday, amid increasing scrutiny over the sector’s environmental footprint and debate over the sustainable future of cryptocurrencies.
The climate-related damages of each bitcoin generated–the asset is “mined” using an energy intensive computer process–in 2021 was more than $11,300, according to the researchers’ estimates, which were based on the economic costs of carbon dioxide emissions.
Between 2016 and 2021, the average climate damages of each bitcoin mined stood at 35% of its market value, the researchers estimated, rising to nearly 60% between 2020 and 2021.
The researchers said the numbers place bitcoin, which is often described as a “digital gold,” much closer to environmentally unfriendly industries like beef production (33%), producing gasoline from crude oil (41%) and using natural gas to generate electricity (46%).
From a climate damages perspective, the researchers said bitcoin is more of a “digital crude” than gold, which has climate costs of just 4% its value.
In total, the global climate damages of bitcoin between 2016 and 2021 are estimated at $12 billion, the researchers said, and the carbon emissions have increased 126 fold over that time.
The environmental costs of cryptocurrencies, of which bitcoin is by far the largest, has become a key point in plotting the sector’s future. In 2021, the researchers estimated bitcoin mining used more energy than countries like Austria or Portugal. Sustainability has become a target for regulators around the world and China, which previously dominated the sector, sent miners scrambling in 2021 when it cracked down on the industry, at least partly for environmental reasons. There are more efficient alternatives available to create and use cryptocurrencies out there. Ethereum, the blockchain underpinning vast swathes of the crypto ecosystem and ether, the second largest cryptocurrency, recently switched to this more sustainable system, a massive undertaking dubbed the “Merge.” It’s possible the bitcoin ecosystem could undergo a similar shift in the future and others are trying to make the industry cleaner by using greener energy to mine.