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Cryptocurrency and blockchains have a bad rap when it comes to energy consumption and carbon emissions, and for good reason. The Crypto Climate Accord (CCA) sets out to change that. How? By encouraging signatories to decarbonize and achieve net-zero emissions as soon as possible.
Inspired by the Paris Climate Agreement, the CCA sets out to fully transition all blockchains to 100% renewable energy by 2025. Other goals include fully decarbonizing the sector and achieving net-zero emissions from electricity by 2030 and full net-zero by 2040.
So far, more than 200 companies, blockchains, and individuals associated with the crypto, DeFi, energy, and technology sectors have signed up as supporters of the Crypto Climate Accord. The CCA shouldn’t just be of interest to crypto miners, exchanges, and investors though. Expect to hear about it at the next climate change conference (COP30). Why? Because the CCA could be a gamechanger for effective sustainability solutions.
What is the Crypto Climate Accord (CCA)?
I’m not alone in pointing out that the activity of Bitcoin, Ethereum, and some other blockchains easily equals the energy consumption of whole countries. Rather than just complain about this (or deny it), the folks behind the Crypto Climate Accord have set out to do something.
The aim of this private sector led initiative is to #MakeCryptoGreen (and take other industries along with it).
Supporters of the CCA work together to develop and scale green solutions. These supporters can be individuals, non-profits, companies, and other organizations working in any sector.
Signatories to the CCA are individuals or entities actively involved in the crypto market that have publicly committed to reaching net-zero emissions from electricity consumption associated with all of their respective crypto-related operations by 2030.
As with all good sustainability initiatives, the CCA requires ongoing progress reports. This helps to keep Signatories on track to net-zero. It also acts as a roadmap and inspiration for other sectors to fully decarbonize and get to net-zero emissions.
How the CCA works
Along with the key aim of reducing emissions, the Crypto Climate Accord is keen to foster demand for cleantech and promote more engagement with cryptocurrencies long-term. The founders of the CCA (Energy Web, Alliance for Innovative Regulation, RMI, and the World Economic Forum) organize a variety of activities to support the CCA’s goals.
The CCA could help change perceptions of cryptocurrencies by enabling better tracking of total power consumption and blockchain-associated carbon emissions. The reality is that many blockchains are already energy-efficient and powered by renewable energy. The trouble is that we almost never have access to information to that effect.
Conveniently, blockchain technology is well-positioned to reliably track the location of mining facilities, i.e., the networks of computers used to process transactions on many blockchains, such as Bitcoin, and the energy used to run these networks.
A closer look at the goals of the Crypto Climate Accord
The Crypto Climate Accord’s overall goal is to fully decarbonize the whole industry and achieve net-zero greenhouse gas emissions by 2040. Milestones along the way include:
- Achieving net-zero emissions from electricity consumption for CCA Signatories by 2030
- Working with Supporters to develop tools, standards, and technologies that accelerate adoption of 100% renewable power for blockchains by 2025
- Demonstrating verifiable and significant progress by the 2025 UNFCCC COP30 conference for all CCA Signatories.
In 2021, Argo Blockchain and DMG Blockchain announced they will lead a working group in support of the Crypto Climate Accord. This working group will advise and develop a new “green hash rate solution”. The CCA already publishes a guidance document on Crypto Energy & Carbon Accounting Good Practices for blockchains.
Is this just greenwashing from the crypto industry?
The CCA is voluntary and private sector led. This means that those involved have an interest in finding effective, market-driven solutions that actually work. Because it’s based on a shared vision and is a collaborative project, the chances of greenwashing are greatly minimized. In fact, the CCA goes far beyond cryptocurrency sustainability.
Sure, the fast-growing blockchain sector vastly increases energy consumption, but it could actually prove to be carbon negative if we consider its wider impact. How? Because blockchains have tremendous promise for simplifying day to day transactions and processes across almost all sectors. This could make many currently wasteful activities far more sustainable.
For example, blockchain technology is increasingly being used to:
- Track, certify, and verify carbon credits for greater transparency around sustainability
- Simplify supply chains for greater efficiency and energy savings
- More effectively distribute energy produced by renewables (including peer-to-peer power networks)
- Create a streamlined circular economy and zero-waste manufacturing.
The CCA offers an attractive solution for nerds who care about climate change. Blockchain technology has the potential to not only eliminate emissions from the growing crypto sector itself, but to make it easier for other industries and individuals to adopt low-carbon solutions.
Why should you care (even if you don’t care about cryptocurrencies)?
Even for folks who don’t care about cryptocurrencies and blockchains, the technology might make day-to-day life more sustainable. It could also mean greater access to a power grid backed by wind and solar, and less overall reliance on fossil fuels.
Blockchains are often open-source, versatile, innovative, responsive, and agile. This makes the technology ideal for supporting scalable and fast climate solutions. To this end, the CCA will establish an open-source toolbox that the industry and other sectors can use to decarbonize and track and prove progress.
Tools in this toolbox should help to:
- Calculate energy use and greenhouse gas impacts
- Facilitate digitized renewables and carbon offset procurement
- Proof of green / sustainability certifications.
That ‘10,000 trees planted’ banner you see on the websites of your favorite eco-friendly brands may well be powered by a blockchain. The charts and graphs showing greenhouse gas emissions and lifecycle analyses in a company’s annual environmental report might also have been made possible by blockchain technology. And how about those all-important GOTS, GOLS, Oeko-Tex, and other sustainability certifications? Yup, these might also be verified via the blockchain.
All in all, the Crypto Climate Accord might seem niche but its potential impact is enormous. Far from just being a band-aid for a sector beleaguered by accusations over rampant energy consumption, the CCA may become one of the biggest drivers for effective climate change solutions.