Crypto Sustainability Coalition launched

The Crypto Sustainability Coalition has been launched by the World Economic Forum to investigate web3 technology support for climate change.

The new coalition, which brings together a range of thirty organisations from the crypto and blockchain ecosystems, is intended to investigate the potential for these technologies to bring positive benefits to the sustainability agenda.

While many blockchain initiatives are designed to be energy efficient, their use is growing and proof-of-work consensus blockchains and Bitcoin mining in particular has come under particular scrutiny for its energy consumption.

The Coalition is convening working groups to tackle three specific issues:
● Energy usage, with analysis of the crypto industry’s consumption of energy and materials to build a clearer picture of its impacts on climate and nature.
● Potential for climate action, with an investigation into ways in which web3 innovations could tackle challenges facing the low-carbon transition at the pace required to hit the Paris Agreement’s targets.
● ‘On-chain’ carbon credits, with investigation of their role in addressing current flaws in global carbon markets, including lack of transparency around carbon offsets, the failure of markets to remove carbon emissions at the scale and pace required and the inability of many small businesses and indigenous communities to participate in carbon credit markets.

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In their activities the working groups will highlight industry standards and best practices as well as provide examples of tangible action that attest to how web3 technologies can support communities most vulnerable to the impacts of climate change.

The wider aim is to foster education on web3 and to better inform governments on how to regulate the technologies and incentivise their development.

“An important and unique aspect of web3 is that it uses technology to support and reward direct community engagement and action,” comments Brynly Llyr, head of blockchain and digital assets at the World Economic Forum.

“This means we can coordinate the work of many individuals directly with one another, enabling collective action without centralised control – a powerful accelerator for grass roots action.”

Numerous blockchain initiatives have focussed on asset tracking, for example for renewable energies and carbon credits, while crypto miners have started steps such as participating in demand response initiatives.

Crypto impacts in US

The announcement of the new Coalition comes just days after the release of a report from the White House on the climate and energy implications of crypto assets in the US.

The study, with clear overlaps with the planned work of the Coalition, which should have a global perspective, reports that the energy usage of crypto assets currently accounts for between 0.9% to 1.7% of the national electricity usage – similar to that of all home computers or all the residential lighting.

Future demand remains uncertain, however, as the use has grown rapidly over the past year activities can be ramped up or down in response to market fluctuations.

Moreover, the demand is regional as crypto mining is highly mobile and for example, Texas has emerged as an increasingly attractive location, reaching an estimated 3% of local peak electricity demand. With continued growth the state could see an additional 25GW of new demand from crypto mining – equivalent to one-third of the current peak demand – raising potential challenges for reliability.

From an emissions perspective the study estimates crypto asset activity in the US to account for 0.4% to 0.8% of total greenhouse gas emissions, similar to that from the diesel fuel used in the country’s railways.

The report states that blockchain technologies in the US must be deployed in a manner that enables reductions in greenhouse gas emissions and calls on the government to facilitate innovation in the development of use cases.

Among the recommendations the report calls for the development of environmental performance standards for crypto asset technologies, the conducting of electricity system reliability assessments of project crypto mining operations and the collection of data on energy usage, fuel mix and other actions such as power purchase agreements and demand response participation.

The Crypto Sustainability Coalition has the Energy Web Foundation as representative of energy sector blockchain development.

Other founding partners include Accenture, Avalanche, Avatree, CC Token, Circle, Climate Collective, Crypto Council for Innovation, Emerge, eToro, EY, Flowcarbon, Heifer International, KlimaDAO, Lukka, NEAR Foundation, PlanetWatch, Plastiks, Rainforest Partnership, Recykal, ReSeed, Ripple, Solana, Stellar Development Foundation, STEWARD, Sustainable Bitcoin Standard, The Global Brain, Toucan Protocol and University of Lisbon.