The White House's Position On Crypto's Climate Impact, Explained

Our reporters and Costa discussed the recent crypto climate report and what's next for u S efforts on climate and non crypto. This episode features highlights from that conversation. Hello and welcome everyone. Thanks for tuning in today. My name is Alison Verse Brol and I'm the cryptop Thanks for joining UM. The White House Office of Science and Technology Policy released report earlier this month on the climate implications

of digital assets. Costa and your report. Your office lays out some of the concerns about certain approaches for mining and verifying crypto transactions, in particular and mechanism known as proof of work. You also make recommendations on how to address these concerns, including suggesting that the federal government collect more data on power usage and work with states in the crypto industry to set greener standards. Um, so what does the main takeaway you want people to bring from

this report? Thanks so much for having me, Ali and David. It's really a pleasure to be with you. But first, before we get started, I just want to make sure that folks on understand where we're coming from. I sit in the White House Office of Science and Technology Policy, and we are the source of scientific and technological advice and analysis for the President and the rest of the Executive Officer of the President around major policies and plans

and profits. And we did this report because in March the pressure the President issued an executive work called Ensuring the Responsible Development of Digital Assets. So the President tasked us, the White House Officer as Science and Technology Policy, for looking into the energy and environmental implications of crypto assets. And so we got started, and we brought together a group of interdisciplinary scientists and engineers and economists and others

to understand these broader issues and present some recommendations. And so alle you asked, well, what did we find. Well, at the highest level, we found that crypto assets represent between point nine and one point seven percent of US electricity use, and that the greenhouse gases that are associated with crypto assets in the United States are between and fifty million metric tons, which is about point forward to point eight percent of US g HD emissions. These numbers

are not big, but they're also not small. And what the report lays out is making sure that we have a handle on understanding this growing industry and ensuring that the benefits for all folks in the United States are maximized and the harms are minimized. You mentioned some agencies that that should take uh specific actions, either on disclosure requirements or setting new standards. I'm curious, like, what's what's the next step One might we actually see some action

coming out of the recommendations made in the report. So what did our report find? So first, what was really piking? And I think as we see a lot of the comments that have come in over the last couple of days when we've been talking about this event, is we need better information. The public needs information and transparency so that we can enable some evidence based policy. And one

of the recommendations. Actually, the biggest recommendation in this report is let's all get better information about this growing industry. And that could be voluntary disclosures from UH, from the mining industry, it could be surveys from utilities and from the Department of Energy UH, and it could be understanding

from state and local energy environmental agencies. And so with some better information, we will be better able to understand how to again maximize the benefits and minimize the damages. So that's the first overall recommendation. The second is really focused on communities. And now you asked which agencies could potentially be involved. This is something where there's a role for the federal government, is a role for state and

local governments, and there's a role for the industry. We think agencies like the Department of Energy and the Environmental Protection Agency could come together with communities, with states and the industry to develop some effective, evidence based environmental performance standards for the deployment of this type of tech these

technologies in communities. We want to make sure that communities are protected from air pollution, from water pollution, from noise pollution UH and also that these crypto assets are helping the grid which there is some innovation that potentially that these could do this rather than harming the grid. We also see a potential role for the Department Energy and others to make sure that as these crypto assets grow quickly,

that we maintain energy affordability and reliability. And that's one of the things that we found that was surprising is that this is an industry that can grow really fast. And it's not to say that it will continue to grow at that rate. The future growth is depends on a whole bunch of different factors. But because of the ability to grow really fast, we want to make sure that the public is protected and that innovation can still

drive towards net zero emissions, lowest cost electricity, and healthy communities. Well, when you you mentioned in there the you know, the federal government working with states to address some standards or create some standards to address pollution um and in the report, you know you mentioned that if that doesn't work, the White House may want to consider executive actions or Congress

may want to consider legislation. Is there sort of a tipping point in your mind for when it would be necessary to resort to kind of the plan B in that particular part of the report, and I think when we when we stand on our principles healthy communities, affordable energy, getting to net zero emissions, we can have a lot of room for current innovation without any additional actions. So there's no outline tipping point, there's no spreadsheet that says

after this other actions should be necessary. But I do think it's important that as this industry grows and continues to grow, that they grow in in balance and in um in connection with the communities that they're operating in. Well, and one last question from me, and then I think we'll turn to some audience questions. But you know, when I talked to the crypto industry UM about some of the concerns regarding proof of work, you know, a lot of the times they'll give me a sense of being

unfairly singled out when other industries. Often they'll say cloud computing also use a sizeable amount of energy. I'm curious to get your thoughts on this, UM and why has this become an area that's gotten so much attention. Well, the reason that we looked at this is because there was an executive order and we were tasked by the

President to understand this specific industry. I do think UM that the the thing that makes this industry different from many other types of new and emerging uses is the ability to grow fast. As I keep mentioning that UM United States was home to about three and a half percent of bitcoin mining a couple of years ago, and now it's more than thirty and so it's important to understand how those trends can develop and how to minimize

impacts on communities. You know, the last big recommendation that we had in this report is really about innovation, and you know, I think we'll probably get into it um as as we continue this conversation, but there is innovation to you use digital assets and crypto assets in in reducing greenhouse gas emissions from vented methane, for example, or by potentially using crypto assets to take advantage of renewable energy that is not able to get to population centers.

One piece that that was in the report but I didn't see get a lot of notice, was that distributed ledger technology was used to help the California system reduce its electricity use in in its grid stress events that were happening in September. And again, as long as we stand on those principles, net zero grid, affordable and reliable electricity,

and not harming communities. I think there's a huge potential benefit to driving innovation in this second coming up more from the Twitter spaces conversation with Alison Vera Sprawl, David Pan and Costa Samaras from the White House. We have a question from the audience on UM using stranded methane

to power mining. So this is from Denny from Duxbury, Massachusetts, UM asking can bitcoin mining powered by natural gas that would have otherwise been flared to help fund investments in renewable energy UM the The example that they give is in Texas, some shale drilling rigs are located beyond the reach of pipelines, so the gas must be flared, releasing methane.

If this gas is instead used to power a mobile bitcoin mining rig, a portion of those revenues could be channeled into renewable energy, thereby hoping the US become more energy independent. Any thoughts on this. So, venting and flaring methane happens at a bunch of different places. Happens at oil and gas well, it happens at landfill, happens at

some sewage treatment, and some agriculture role. Processes and venting and flaring methane at oil and gas wells waste about four percent of global methane a year and contributes to about four hundred million metric tons of c O two, about point seven percent of global greenhouse gas emissions. So in a world that gets to net zero emissions, we want zero methane flare venting and methane flaring. If methane, that would have been vented, So no methane should be

vented at all. The methane venting is bad. And so why is it bad Because methane is a very potent greenhouse gas emission. It's twenty seven to thirty times the global warming potential of carbon dioxide over a hundred year timeframe, and in the near term it's eighty times. It's powerful of CEO two. So venting methane directly to the atmosphere is bad for climate change, and we want to do

everything that we can to avoid that. And so typically what's happened is vented methane is flare, just lit on fire, completely wasted, and it's better that have flared methane than vented methane. It would be even better to have that methane be captured and used rather than wasted into the air. And if mining operations can use vented or flared methane to generate the electricity to do mining operations, there can be a positive climate impact. So yes, absolutely, we want

to get venting to zero. We want to get flaring as close as possible to zero. Again, this has to be done in the understanding of impacts to local communities. So flaring is still going to create CEO two. Flaring is still going to create some emissions, and it's important that additional flaring is not overburdening communities that have historically

had lots of amount of pollution. All right, well let's go ahead then, I think this is a good time to kick it over to David Pan, our bitcoin mining reporter. So David over to you. Thank you. So here's the question from the one of the listeners. So she is asking, what are the top three enabling or complimentary policies the administration could implement to leverage bitcoin mining as a tool

for lower and growing house gas emissions. Well, you know, the recommendations from our report focus on better information, minimizing impacts on communities, and driving innovation, and so those are the three the areas that we focused on going forward. The question is how can mining drive towards net zero emissions?

I would put that under our Driving Innovation recommendation, and really it's demonstrating the ability and the trend, the preference and ultimately, hopefully the majority operating conditions that this industry drives towards building additional renewables, building additional storage, getting emissions down to net zero as quickly as possible. Thank you to Allison, David Anto Costa Samorrow. You can find more of Allison's reporting and of David's reporting on the Bloomberg terminal,

on Bloomberg dot com or on Twitter. Allison is at ali their sprill that's a L L y v E R s p R I L l E, and David is at david Pan Underscore one. That's d A v I d p A N Underscore one. On the next episode of Bloomberg Crypto for Poets, April might be the cruelest month for traders, though September is definitely the one to fare. So what's the outlook for crypto prices as

we head towards the end of the year. Is there any sign of a thought in this Crypto Winter, who can say or guests m This is Bloomberg Crypto, a daily podcast from Bloomberg and I Heart Radio. For more shows from I Heart Radio, visit the I Heart Radio app, Apple Podcasts, or wherever you get your podcast. Send us your comments, questions, or suggestions for the show to Crypto at Bloomberg dot net or find us on Twitter. We're

at Crypto. The supervising producer of Bloomberg Crypto is Vicky Verglina. Our senior producer is Janet Babin. Associate producer is Moses on them Desta wonder At is our engineer. Original music by Leo Sidran. I'm Stacy Marie Shmal. We'll be back tomorrow