Experts Challenge IMF Report on Crypto Mining’s Environmental Impact

Bitcoin mining experts refute the IMF recent report on crypto mining emissions, arguing it unfairly links crypto with AI and uses flawed data.

Bitcoin mining and energy experts have recently pushed back against a condemning report issued by the International Monetary Fund (IMF) concerning the environmental impact of cryptocurrency mining. On August 16, Daniel Batten, a well-known crypto ESG advocate and researcher, posted a detailed rebuttal on X (formerly Twitter) in response to the IMF’s August 15 report that criticized Bitcoin mining for its alleged environmental harm.

Batten argued that the IMF’s report employed flawed rhetorical techniques, including “guilt by association,” by inaccurately linking the energy consumption of Bitcoin mining with that of AI data centers. The IMF’s report, titled “Carbon Emissions from AI and Crypto Are Surging and Tax Policy Can Help,” lumped together the two industries, labeling them as significant threats to the environment due to their high energy consumption.

Batten claimed that such attack pieces often come from entities, such as central banks, that could lose out from the mainstream adoption of Bitcoin. He emphasized that recent scientific studies and mainstream journalism have increasingly recognized the environmental benefits of Bitcoin mining. In particular, Batten pointed out that Bitcoin mining operations, which are more flexible in their energy usage, have been shown to have a net decarbonizing effect on power grids. In contrast, AI data centers, which are less flexible, tend to have a net carbonizing impact.

He also highlighted that the IMF’s own data projects a decrease in the share of global electricity usage and CO2 emissions attributed to crypto by 2027, whereas both are expected to rise for the AI industry. Moreover, Batten criticized the IMF for relying on discredited sources, such as Alex de Vries, and outdated information from Cambridge University dating back to 2022.

Batten concluded that the IMF’s reports should be regarded as being of low research standards and should not be relied upon by policymakers or regulators. His post even drew praise from U.S. Senator Cynthia Lummis, who replied, “This is super informative. Thanks for writing.”

Meanwhile, the IMF’s report, authored by Shafik Hebous, deputy division chief of the Fiscal Affairs department, and Nate Vernon-Lin, a climate policy division economist, suggested implementing a per kilowatt hour tax on crypto mining. They argued that such a tax could significantly curb crypto mining emissions, increase electricity prices for miners by 85%, and potentially raise global government revenue by $5.2 billion annually, while reducing emissions by 100 million tons.

It’s also worth noting that the IMF has shown strong support for central bank digital currencies (CBDCs), with reports indicating increased interest in these currencies and the IMF’s involvement in developing its own platform last year.

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