24 Oct Here’s Why Bitcoin Miners Should Pay Attention to COP26
The COP26 climate summit, currently being held in Scotland – albeit without key leaders from Russia and China in attendance – has thus far made no direct reference to bitcoin (BTC) or altcoins. But there may already be key takeaways from the decision already taken that could impact the industry, particularly miners.
Wednesday was dubbed “finance day” at COP26, so many in the crypto community likely had their ears pricked in case of relevant developments. And although overt crypto-related statements were lacking, some of the policy pledges could well have a knock-on effect for the industry – much as was the case when the UK hosted the G7 summit in June this year.
The day was kicked off by the British Chancellor of the Exchequer Rishi Sunak, who announced that the “entire global financial system will be rewired for net-zero” carbon emissions.
This ambitious-sounding goal, Sunak explained, will make use of improved climate data, the issuance of sovereign green bonds, and “mandatory sustainability disclosures.”
The latter could potentially become a sticking point for crypto operators, particularly miners, who might find themselves under increased pressure to switch to renewable forms of energy in countries abiding by the COP26’s protocols.
As the term is somewhat ambiguous, it is hard to say how deep these disclosures may end up going. But it is not impossible to imagine a scenario, considering the bad wrap bitcoin has received this year over its carbon-heavy mining footprint, that players such as exchanges could be scrutinized for offering bitcoin-related services.
China’s recent mining and crypto crackdown, after all, has been conducted mainly in the name of cleaning up the environment and meeting eco-pledges.
Sunak continued by saying that the UK was aiming to become the world’s “first-ever net-zero aligned financial center,” adding that it will “become mandatory for firms to set out how they plan to decarbonize and transition to net-zero with.”
The finance chief said that an “independent taskforce” would monitor the process. Again, whether crypto and its carbon footprint will fall under the microscope simply isn’t clear at this stage. But as the Chinese example suggests, nothing is out of the realm of possibility, particularly when it comes to political point-scoring.
Similar comments were made by Sunak’s American counterpart, the United States Treasury Secretary Janet Yellen, who said that there needed to be a “wholesale transformation” of carbon-intensive economies.
In their rush to appear to be doing the right thing, leading powers could well seek to go after the low-hanging fruit of crypto mining – particularly if it can be proved that miners are not making the move to carbon-free or low-carbon power.
The sticking point in all of this may be that some of the world’s biggest “carbon-intensive economies” have not made the journey to Scotland.
Russia has stepped in to partially fill the China-shaped hole in BTC hashrate, but has snubbed the summit – as has China, previously the center of gravity of the global mining industry.
Regardless, Moscow may end up taking measures to bring the mining sector under control anyway, after regions reported local power-related issues, blamed mostly on miners.
As the day wound up, the COP26 President Alok Sharma and the UN’s Patricia Espinosa told attendees at a news conference that the Organisation for Economic Co-operation and Development could be well advised to update its analysis of how much money had actually been committed to bolstering change in poorer nations to reflect the pledges made in Glasgow.
Sharma took aim at Beijing, criticizing China for yesterday announcing that the Middle Kingdom wanted to focus on the target of avoiding global warming of 2 degrees Celsius, rather than aiming for a 1.5 degrees Celsius maximum target.
China called the UK COP26 presidency an “unapologetically high-ambition” leadership.
Meanwhile, in somewhat lighter news, Greta Thunberg, the climate change activist who began the week by singing a refrain of “You can shove your climate crisis up your arse,” has decided to bin bad language. Instead, she says she will go “net-zero” on swear words from now on.