The impact of Bitcoin mining in the United States on the climate

Bitcoin Mining and Its Climate Impact

Bitcoin mining is known for its high energy consumption. As of March 25, 2023, Bitcoin miners' electricity demand reached 15.4 gigawatts (GW). In the Bitcoin network, so-called "miners" compete by solving computational puzzles to add blocks to the chain and verify the ownership and transactions of the coins contained within those blocks. To participate in this process, miners use specialized hardware devices, which consume electricity.

While both scholars and Bitcoin supporters agree that miners consume a large amount of electricity, there is a fundamental divide in opinions regarding the climate impact of Bitcoin mining. Critics argue that Bitcoin’s electricity consumption is a disaster, whereas proponents consider it a feature rather than a flaw. A growing body of academic research compares Bitcoin’s carbon footprint to the emissions levels of medium-sized countries. At the same time, Bitcoin advocates highlight potential climate benefits such as providing grid balancing services, supporting the expansion of renewable energy, reducing methane emissions through the use of flare gas or abandoned oil wells, and repurposing waste heat from mining hardware for auxiliary activities.

Notably, during the North American winter storm Elliott in December 2022, Bitcoin miners' hash rate dropped by as much as 100 EH/s, representing 38% of the total network hash rate on that day. This figure offers empirical evidence that as of December 2022, at least 38% of Bitcoin mining was occurring in the United States and Canada.

We evaluated both sides of the argument and, based on data from 13 publicly listed companies (which accounted for a quarter of the total network hash rate by the end of 2022), provided empirical evidence on the scale and energy sources of Bitcoin mining in the U.S. Using grid-average emission factors, we found that the carbon intensity of electricity used by these 13 miners was 397 grams of CO₂ per kilowatt-hour—nearly identical to the U.S. grid average of 387 grams of CO₂ per kilowatt-hour. Additionally, we found that these 13 publicly traded U.S. mining companies alone were responsible for 7.2 million metric tons of CO₂ emissions annually—exceeding the entire carbon emissions of the state of Vermont.

These findings, based on grid-average emission factors, contradict industry claims that the majority (58.9%) of Bitcoin mining is powered by sustainable energy, especially since non-fossil energy sources (renewables at 21.5% and nuclear at 18.2%) make up a significantly smaller share of the U.S. power mix. At the same time, we found that Bitcoin mining's potential climate benefits also warrant close attention. For example, the Bitcoin network’s financial incentives could subsidize the plugging of orphaned and abandoned wells, significantly reducing methane emissions at scale.

The growing transparency around the location and energy sources of large, publicly listed Bitcoin miners underscores the value of disclosure requirements. This transparency could help dispel unsupported industry claims, improve assumption-based academic models, and inform regulators of areas where Bitcoin mining may offer climate co-benefits.