Key Insights:
- Greenpeace identifies major financiers like BlackRock and Vanguard as key contributors to Bitcoin mining emissions.
- The report urges financial institutions to disclose climate risks tied to Bitcoin investments.
- Greenpeace advocates for regulatory measures and a shift from proof-of-work to proof-of-stake to cut environmental impact.
Greenpeace USA has published a new report, “Bankrolling Bitcoin Pollution: How Big Finance Supports a New Climate Threat,” targeting major financial institutions on Wall Street. The report accuses these institutions of financially supporting the emissions-heavy Bitcoin mining industry, thus contributing to significant environmental harm.
The report names several prominent financial institutions, including Trinity Capital, Stone Ridge Holdings, BlackRock, Vanguard, and MassMutual, as key financiers of Bitcoin mining companies.
According to Greenpeace, these institutions were responsible for over 1.7 million metric tons of carbon dioxide (CO2) emissions in 2022. This amount is equivalent to the emissions from over 335,000 American homes using electricity for a year.
Greenpeace emphasizes that Bitcoin mining has evolved into a large commercial industry requiring substantial capital to build facilities and purchase computing equipment. Banks and asset managers, including those on Wall Street, have provided this necessary financial support, thereby facilitating the industry’s growth.
Greenpeace criticizes the lack of transparency and disclosure from the Bitcoin mining industry regarding its environmental impact. The report asserts that the industry’s opacity allows Bitcoin mining companies to avoid accountability and obscures the full extent of Bitcoin’s climate problem. It calls for financial companies involved in Bitcoin mining to report on the emissions associated with their investments and underwriting services.
Moreover, this lack of reputable electricity and emissions reporting, Greenpeace argues, makes it challenging for investors, stakeholders, and regulators to make informed decisions aligned with green policies.
Hypocrisy in Green Investment Goals
The report highlights a perceived hypocrisy among banks and asset managers who publicly commit to green, sustainable investment goals while also financing the crypto mining industry. For instance, BlackRock, a signatory to the Net Zero Asset Managers initiative, is identified as one of the top financiers of Bitcoin mining-related emissions.
According to the report, BlackRock had the third-highest carbon emissions from its investments in Bitcoin mining among the 540 financial institutions studied. The report also mentions other financial institutions like M&T Bank and MassMutual, which have issued loans to Bitcoin miners, further contributing to the industry’s carbon footprint.
Regulatory and Taxation Measures Proposed
Greenpeace advocates for regulatory and taxation measures to address the environmental impact of Bitcoin mining. It supports the Biden administration’s proposed Digital Asset Mining Energy (DAME) tax, which aims to incentivize miners to clean up their operations. The report argues that such policies are necessary to make miners accountable for the environmental, social, and economic costs of their activities.
Greenpeace has also suggested that Bitcoin should change its consensus protocol from proof-of-work (PoW) to proof-of-stake (PoS), following the example of Ethereum. However, this proposal has faced strong opposition from the Bitcoin community and developers, who argue that such a change would undermine Bitcoin’s decentralized nature.
Allegations of Greenwashing and Deceptive Practices
The report accuses the Bitcoin mining industry of greenwashing, comparing its tactics to those used by the tobacco and fossil fuel industries. It claims that the industry has published misleading studies in predatory scientific journals to promote a green image. Greenpeace alleges that these studies, often written by individuals with conflicts of interest, misrepresent the environmental and social benefits of Bitcoin mining.
Greenpeace also criticizes the industry’s use of Renewable Energy Credits (RECs) and carbon offsets to artificially reduce their reported carbon footprint. According to the NGO, these market-based instruments are not effectively regulated and do little to cut carbon emissions or spur renewable energy development.
The timing of this report is notable, as it comes amid growing political debate over cryptocurrency regulation in the United States. The upcoming U.S. elections have seen crypto regulation emerge as a topic of discussion, with differing stances among candidates.
Former President Donald Trump has positioned himself as a pro-crypto candidate, while President Joe Biden’s administration has taken a more critical stance towards the industry. Greenpeace’s report adds to the ongoing discourse by highlighting the environmental costs of Bitcoin mining and calling for greater accountability from Wall Street financiers.
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