 Bitcoin and carbon dioxide emissions: Evidence from daily production decisionsAnna Papp, Douglas Almond and Shuang Zhang Journal of Public Economics, 2023, vol. 227, issue C Abstract: Environmental externalities from cryptomining may be large, but have not been linked causally to mining incentives. We exploit daily variation in Bitcoin price as a natural experiment for an 86 megawatt waste coal-fired power plant with on-site cryptomining. We find that carbon emissions respond swiftly to mining incentives, with price elasticities of 0.69–0.71 in the short-run and 0.33–0.40 in the longer run. A $1 increase in Bitcoin price leads to $3.11–$6.79 in external damages from carbon emissions alone, well exceeding cryptomining’s value added (using a $190 social cost of carbon, but ignoring increased local air pollution). As cryptomining requires ever more computing power to mine a given number of blocks, our study highlights both the revitalization of US fossil assets and the need for financial industry accounting to incorporate cryptomining externalities. Keywords: Bitcoin; Cryptocurrency mining; Carbon emissions; Climate change (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:pubeco:v:227:y:2023:i:c:s0047272723001858 DOI: 10.1016/j.jpubeco.2023.105003 Access Statistics for this article Journal of Public Economics is currently edited by R. Boadway and J. Poterba More articles in Journal of Public Economics from Elsevier |
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