IMF execs float raising crypto mining electricity prices by 85%

Jesse Coghlan7 hours agoIMF execs float raising crypto mining electricity prices by 85%A tax on the energy used by crypto miners could cut emissions by 100 million tons a year, equal to Belgium’s emissions, say two IMF executives.1776 Total views2 Total sharesListen to article 0:00NewsOwn this piece of crypto historyCollect this article as NFTCOINTELEGRAPH IN YOUR SOCIAL FEEDFollow ourSubscribe onTwo executives from the International Monetary Fund (IMF) say increasing the average crypto mining electricity costs globally by as much as 85% through taxes could put a huge dent in carbon emissions. 

A tax of $0.047 per kilowatt hour “would drive the crypto mining industry to curb its emissions in line with global goals,” the IMF Fiscal Affairs Department’s deputy division chief Shafik Hebous and climate policy division economist Nate Vernon-Lin wrote on Aug. 15.

If accounting for miners’ local impact on health, the tax would rise to $0.089 per kilowatt hour, the pair said.

Hebous and Vernon-Lin wrote that the higher tax would increase the average electricity price for crypto miners by 85%, raise yearly global government revenue by $5.2 billion 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, while the artificial intelligence model ChatGPT needs 10 times the amount of power compared to a Google search.

The pair also floated an AI data center energy use tax set at $0.032 per kilowatt hour — which bumps to $0.052 when accounting for pollution costs as they “tend to be in locations with greener electricity,” the IMF officials claimed. That tax could generate $18 billion a year for governments.

A September IMF paper found crypto mining could account for 0.7% of global carbon emissions by 2027. Adding emissions from AI data centers could bring the total to 1.2% — 450 million tons of emissions in total.IMF estimates predict AI and crypto mining together could use as much as 6% of global electricity by 2027. Source: IMF

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Hebous and Vernon-Lin said the targeted tax might encourage crypto miners and AI data centers to use more energy-efficient equipment and could see crypto miners adopt less energy-intensive operations.

However, they said there would need to be global coordination on the tax “as stricter measures in one location could encourage relocation to jurisdictions with lower standards.”

However, there have beenarguments over how much emissions crypto miners produce relative to other sectors. Tech giant Amazon’s reported carbon footprint was 71.54 million metric tons of carbon dioxide in 2021 alone, already more than Bitcoin’s estimated 65.4 million metric tons.

Some countries, such as Venezuela, have banned crypto mining due to the strain the practice puts on the power grid. Iran has also started to give a $24 reward to anyone who dobs in illegal crypto miners as the country’s grid is strained amid a severe heatwave.

Magazine:AI may already use more power than Bitcoin — and it threatens Bitcoin mining# Mining# Taxes# Energy Consumption# IMF# Bitcoin Mining# RegulationAdd reaction