 Cryptocarbon: How much is the corrective tax?Shafik Hebous and Nate Vernon-Lin Energy Economics, 2024, vol. 138, issue C Abstract: With increasing awareness of past environmental damage from crypto mining, questions arise as to how persistent the problem will be in the future and how taxation can help in addressing this negative externality. We estimate that the global demand for electricity by crypto miners reached that of Australia or Spain, resulting in 0.28% of global CO2 emissions in 2022. Projections suggest sustained future electricity demand and indicate further increases in CO2 emissions if crypto prices significantly increase and the energy efficiency of mining hardware is low. To address global warming damages, we estimate the corrective excise on the electricity used by crypto miners to be USD 0.045 per kWh, on average. Considering also air pollution costs raises the tax to USD 0.085 per kWh. Country-specific estimates vary depending on their electricity sources. Other new electricity reliant technologies are also driving up CO2 emissions. In our calculation, the corrective tax on electricity used by data centers is USD 0.048, on average. Keywords: Corrective taxes; Carbon tax; Mitigation policy; Crypto assets; Crypto mining; Bitcoin; AI; Data centers (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:138:y:2024:i:c:s0140988324005358 DOI: 10.1016/j.eneco.2024.107827 Access Statistics for this article Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant More articles in Energy Economics from Elsevier |
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