IMF Deputy Managing Director Gita Gopinath is concerned about the rapidly increasing energy consumption and carbon footprint of crypto mining and data centers; she predicts that by 2027, the share of these two major industries in global electricity could rise from 2% in 2022 to around 3.5%; this level is comparable to the current electricity consumption in Japan, the world's fifth-largest electricity-consuming country.
Finance Association News, November 18th (Editor: Zhou Ziyi) As the current two hot industries, cryptos and artificial intelligence, continue to gain popularity; however, at the same time, there are growing concerns in society about their energy consumption and carbon emissions issues.
Recently, Gita Gopinath, Deputy Managing Director of the International Monetary Fund (IMF), expressed her concerns. She believes that the energy consumption and carbon footprint of crypto mining and data centers are rapidly increasing, and she expects this situation to worsen in the coming years.
Gopinath cited IMF data on Sunday, November 17th on social media X, stating that under normal circumstances, by 2027, the share of cryptos mining and data centers in global electricity could increase from 2% in 2022 to around 3.5%. This level is comparable to the current electricity consumption in Japan, the world's fifth-largest electricity-consuming country.
In an optimistic scenario (i.e., low electricity consumption), this proportion is expected to increase slightly to 2.2% from the current level; whereas in a pessimistic scenario (i.e., high electricity consumption), this proportion could expand to nearly 6%.
As for the carbon emissions of these two major sectors, it is projected that by 2027, the share of crypto mining activities in global CO2 emissions is likely to decrease, but in the worst case scenario, it could double from the current level; while the carbon emissions from data centers could reach as high as 0.45 billion tons in the worst case scenario, accounting for 1.2% of the global total.
At the time of Gopinath's statement, the debate about the environmental impact of Bitcoin mining is intensifying. According to the Cambridge Bitcoin Electricity Consumption Index, the annual greenhouse gas emissions from Bitcoin mining exceed those of countries like Greece.
However, the increasing carbon footprint has not deterred countries from exploring the economic prospects associated with this emerging industry. For example, during his election campaign, U.S. President-elect Donald Trump pledged to make the USA a world center for Bitcoin mining; earlier this year, Russian President Putin legalized crypto mining.