How will Tesla’s bitcoin investment affect its carbon footprint?
Tesla electric cars do not create “tailpipe” emissions, but the automaker’s latest investment may have a detrimental impact on its total carbon footprint.
Tesla revealed on Monday that it had acquired $1.5 billion of the bitcoin cryptocurrency and will soon accept bitcoin as payment for its vehicles. But bitcoin is expected to produce more annual carbon emissions than entire nations, Reuters noted.
That’s because on powerful computers, bitcoin is created by processing complex mathematical transactions. According to Reuters, which cited data from the University of Cambridge and the International Energy Agency, bitcoin “mining” uses a lot of power, the same amount used by the Netherlands in 2019.
Bitcoin mining, similar to the amounts generated by Jordan and Sri Lanka, is expected to generate between 22 million and 22.9 million metric tons of carbon dioxide emissions per year, the report noted, citing a study in the scientific journal Joule in 2019.
For some time, the possible environmental effect of bitcoin mining has been recognized. Even in 2018, bitcoin mining was projected to use more energy than all Tesla electric cars on the road then. Yet in adopting cryptocurrency, Tesla is not alone: in 2019, Karma Automotive started accepting bitcoin as payment for its plug-in hybrids.
The Reuters report noted that by using more renewable power sources, initiatives are underway to reduce pollution from bitcoin mining. The study noted that investors could also want to pay a premium for green bitcoin, boosting its value. But those attempts have yet to gain momentum, and the price of bitcoin has been sent through the roof in the meantime by Tesla’s investment.
Tesla monitors carbon emissions related to its activities as well as its cars, like other automakers. In 2019, though it did not release one in 2020, the organization released its first sustainability report, called an Impact Report. What Tesla plans to offset the carbon emissions from its bitcoin purchase, if any, is uncertain.
CEO Elon Musk is a carbon tax fan, so maybe it should be relevant here? At any rate, in future sustainability studies, Tesla should include bitcoin mining in order for owners to consider the true carbon footprint of their electric cars, or at least the financing behind them.
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