The Crypto Climate Accord is trying to change the stigma around blockchains and digital currencies. In fact, most people who haven’t embraced cryptocurrencies look to its environmental impact as one key reason why. However, what carbon footprint do blockchains leave behind? And how much of an impact does this have on climate change? Let’s take a closer look at the Crypto Climate Accord and its goals to revolutionize the cryptocurrency industry in the future.
Crypto Climate Accord Background
The Crypto Climate Accord (CCA) was announced in April of 2021 with the goal of making crypto green. Its inspiration comes from the Paris Climate Agreement and it has the support of more than 250 companies and individuals within the industry.
Overall, the CCA wants to “decarbonize the global crypto industry by prioritizing climate stewardship.” And it plans to make this happen by transitioning all blockchains to renewable energy by 2030. And by 2040, the objective is to reach net-zero emissions.
In other words, the CCA is working to make the crypto industry carbon neutral within the next 20 years. This means any greenhouses gases going into the atmosphere due to blockchains will be balanced out and removed or eliminated by new technology.
The Crypto Climate Accord is also working to develop new standards, tools, technologies and verification processes to help support the industry during this transition. These are lofty goals, but is it even possible?
CCA Expectations
The CCA is shooting for the stars. In general, its goals seem well out of reach at the current moment. There are more than 10,000 cryptocurrency systems running on blockchains right now. And this number is growing rapidly.
Moreover, the industry’s carbon footprint is bigger than you might think. Bitcoin alone consumes half a percentage point of all electricity in the world, according to the National Resources Defense Council. That’s right around the same amount of energy usage as the country of Sweden altogether. In addition, Google could power its entire business operations seven times over with that amount of usage.
As you can see, the Crypto Climate Accord has a lot of work to do. Bitcoin generates around 23 million metric tons of carbon dioxide emissions each year. And this doesn’t include the tens of thousands of other cryptocurrencies on the market.
It’s clear this is a massive undertaking for the CCA. Furthermore, the minimal regulations allow almost anyone to startup their own cryptocurrency at the moment. While it may be possible to slowly transition to renewable energy, the CCA will need the support of national governments and prominent figures to make it happen. The expectations have been set, but the time frame seems out of reach.
Investing in Cryptocurrencies
The cryptocurrency market is facing high volatility due to the current economy, recession fears and inflation. It also comes with higher risks than traditional stocks. Therefore, do your due diligence before making any investment decisions over cryptocurrencies. For example, prominent investors such as Warren Buffett and Bill Gates are outspoken in their distrust of crypto.
Nevertheless, cryptocurrencies do present investors with unique investment opportunities. To learn more about crypto trends, consider signing up for one of the best investment newsletters that focuses on digital currencies. You will also find daily e-letters that provide expert analysis on stocks, bonds, dividends and more.
You may want to keep a close eye on the Crypto Climate Accord over the coming years. Follow the data and you will see if there’s an impact. One thing is clear, the CCA has the right intentions and that’s the first step to influencing change.
Corey Mann is the Content Manager of Investment U. He has more than 10 years of experience as a journalist and content creator. Since 2012, Corey’s work has been featured in major publications such as The Virginian-Pilot, The Washington Post, CNN, MSNBC and more. When Corey isn’t focusing on Investment U, he enjoys traveling with his wife, going to Yankees games and spending time with his family.
