Blockchain, climate damage, and death: Policy interventions to reduce the carbon emissions, mortality, and net-zero implications of non-fungible tokens and Bitcoin

Abstract

The art industry has commercialised and popularised non-fungible tokens (NFTs), with the volume and value of NFT transactions rapidly growing to US$ 10.7 billion in Q3 2021. The increase in NFT transactions has drawn the attention of the art market to the consequent carbon emissions resulting from verifying transactions in proof-of-work blockchains supporting NFT transactions. With CO2-related deaths attributable to NFT transactions, social pressure from the art market has helped to progress the switch away from the deliberately polluting proof-of-work blockchains to more sustainable consensus protocols.Nonetheless, many popular types of blockchain have resisted the pressure to decrease their environmental impact, including Bitcoin, whose attributed 2021 annual emissions will produce emissions responsible for around 19,000 future deaths. In response, recent global policy interventions have employed legal and fiscal tools to reduce the carbon impact of some or all types of blockchains. Linking the damage caused by proof-of-work blockchains to climate change and human mortality, this study examines the recent policy interventions designed to motivate a shift in blockchain consensus protocols and promote miners' energy efficiency to mitigate environmental damage. This article further explores available policy intervention options that are currently not utilised.