Web3 and Sustainability
How We Can Reduce the Climate Impact of Blockchains,
How Blockchains Can Help Reduce Our Own
February 2023
Kirsten Sandberg
Foreword by
Scott Chamberlin
Sr Director Software Sustainability, Intel

Sponsored by

Contents
Foreword .............................................................................................................................. 3
Introduction ....................................................................................................................... 4

Social and political..........................................................................................................24
The value of diversity and inclusion...............................................................................................25
The human infrastructure needed.................................................................................................26

Executive summary.......................................................................................................... 8

Shovel-ready use cases.........................................................................................................................27

Framing the conversation.............................................................................................. 9Standards and regulation............................................................................................29

Sustainability in actionable terms....................................................................................................9

Build on current momentum............................................................................................................29

Growth of participation in Web3.....................................................................................................10

Develop technical standards............................................................................................................ 30

The challenges at a glance...................................................................................................................11

Develop accounting standards....................................................................................................... 30

Energy consumption of proof-of-work.................................................................... 12

Conclusion..........................................................................................................................32

Perverse incentives or the cost of trust?...................................................................................... 12
More computationally efficient and scalable blockchains................................................... 15

Acknowledgments..........................................................................................................33

Hardware production and disposal.................................................................................................17

Resources............................................................................................................................33

Adoption of sustainable energy and new approaches........................................................... 19

About the author..............................................................................................................35

Education and awareness: Carbon offsets.............................................................22
Implementation challenges...............................................................................................................23
Last mile gap.............................................................................................................................................23

Endnotes.............................................................................................................................36

Foreword
Intel and Linux Foundation Research hosted

At Intel our commitment to addressing climate

the Sustainable Blockchains Roundtable onchange has a broad base and is focused on multiple

July 29, 2022. Since then there have been many

dimensions. We’ve pledged to be net-zero in ourdevelopments influencing the sustainability aspects

global operations by 2040, to increase the energyof this technology. The two big ones related toefficiency of our products, and to lower the carbon

sustainability: the Ethereum merge and an increase

footprint of PC platforms using our chips.2 Intel’sin regulation with respect to mining proof-of-work

Carbon Reduction and Green Software team led thiscryptocurrency. With Ethereum moving to proof ofroundtable and works to also extend the reductions

stake we have seen the first large-scale transition

to our Scope 3 downstream emissions, helping ouraway from the energy waste designed into proof

customers achieve lower emissions when using ourof work (See Figure 3 on page 15). This has shown

products. This roundtable grew out of that effort,

that blockchain ecosystems don’t necessarily needto create a better understanding of the implications

to be tied to energy use to be useful. Regulations,of investments in high-energy workloads such as

driven by energy cost increases in 2022 and concern

proof-of-work, gaming, and AI to build products

about the impact of proof-of-work on energy andwhich minimize the environmental impact while

sustainability, have started to increase1. This is

maximizing the value to our customers.

accelerating the debate into legislatures (local andnational) about what is the appropriate impact of
this technology on our energy grids, and what are
the downstream sustainability impacts.
The key message is that technology, in all its forms,
can have both positive and negative impacts andthat consequential understanding of the adoption ofthis technology to the problem of global warming is

The roundtable was created and led by Tamara
Knesse (Director of Developer Engagement), andZane Griffin Talley Cooper (Graduate TechnicalIntern). It is their vision, hard work, and impact
which made this report possible.
Scott Chamberlin
Sr Director Software Sustainability, Intelan important factor which needs to be more at theforefront in our decision making.

1

https://www.marketplace.org/2023/01/13/crypto-mining-hits-a-very-rough-patch/2

https://www.intel.com/content/www/us/en/newsroom/news/net-zero-greenhouse-gas-emissions-operations.html#gs.pa1wq8

WEB3 AND SUSTAINABILITY

3

Introduction
In organizing this event and drafting the following report,
which draws on roundtable discussions, we wanted to build
community, drive ecosystem-wide change, and create businessand organizational value. We can’t solve the climate crisis with
one technology designed by one company―it requires a holistic,
cross-industry effort, with input from communities, academic• Carbon market and energy trading companies that areleveraging Web3 technologies• Greenhouse gas standards organizations that are facilitating
carbon measurement and credit verification both on and off
the blockchain.5

researchers, and climate advocates. We also hope that this report

Our participants hailed from numerous different geographies,

serves as a guidepost for those in the tech industry who may haveincluding Australia, Canada, Iceland, Switzerland, the United

little familiarity with Web3, to gain a more nuanced understanding

Kingdom, and the United States. In addition to including a range ofof the diversity of communities, projects, and approaches toperspectives, both in terms of ideology and geography, we also paidsustainability across this emerging developer ecosystem.

attention to gender and racial diversity, which we felt were important,Intel’s stalwart commitment to open source is a key piece of thisgiven the blockchain space’s general problems with diversity.6

endeavor, as we build relationships and technologies with fellow

We included a range of communities across the Web3 landscape,travelers to enact positive social change.3 We hope that the public

including Bitcoin, Ethereum, decentralized autonomous

report produced from this event will help build knowledge aboutorganizations (DAOs), and more, which made for a more diverse

sustainability and blockchains for the broader community.

and interesting event.7 Participants engaged in small breakout

In addition to many representatives from across Intel Business
Units and Intel Labs – including Arjun Kapoor, Director ofStrategy for Intel® BlockscaleTM , and Claire Vishik, an Intel fellow
for hardware, security, and cryptography4 ―we gathered an

sessions and larger group discussions around the meaning ofsustainability, and varied approaches to both using blockchain
technology to aid in sustainability efforts and making blockchainsthemselves more climate friendly.

interdisciplinary cohort of academics and researchers thinking

While attendees largely stayed away from remarks about theabout the cultural, ecological, and political stakes of blockchains

crypto crash, the moment certainly colored our conversations.

from a variety of perspectives:

Many participants expressed concern over the sometimes dubious• Proof-of-work (PoW) infrastructure builders and providers

nature of carbon credits and other greenwashing claims, which

thinking differently about compute/energy relationships
3

Pat Gelsinger, “An Open Letter to an Open Ecosystem,” LinkedIn, LinkedIn Corp., 25 Oct. 2021. https://www.linkedin.com/pulse/open-letter-ecosystem-pat-gelsinger.

4

Claire Vishik, Intel fellow, LinkedIn, LinkedIn Corp., n.d. https://www.linkedin.com/in/cvishik.Teixeira

5“Proof-of-work,” Wikipedia, Wikimedia Foundation Inc., last updated 13 Oct. 2022. https://en.wikipedia.org/wiki/Proof_ of_work.

6F rizzo-Barker, Julie A., Women in Blockchain: Discourse and Practice,” Co-Construction of Gender and Emerging Technologies, AoIR Selected Papers of Internet
Research, 5 Oct. 2020. https://doi.org/10.5210/spir.v2020i0.11215.

7“ Decentralized Autonomous Organization,” Wikipedia, Wikimedia Foundation Inc., last updated 19 Oct. 2022. https://en.wikipedia.org/wiki/Decentralized_
autonomous_ organization.

WEB3 AND SUSTAINABILITY

4seem dangerously close to the scams and security breaches

However, there are key differences between what is said and what

plaguing crypto in general.

is done, and as a community we need to explore those differences

To ensure privacy and candor at the event, we followed
Chatham House Rules, meaning that participants were freefurther. We also need further research to deepen our knowledge
and understanding of these gaps.

to use information from the discussion, but not attribute any

With the Merge, the net reduction in energy use across what weparticular comment.

once called the Ethereum network is much harder to determine.

The freedom of anonymity led to rich discussions and crucial
insights into the staggering challenges and bountiful opportunities
currently facing the Web3 space. Calls for standardization andregulation were strong. Additionally, accurately calculating theemissions associated with proof of work is difficult, though many
have tried.8 But the public perception of non-fungible tokens(NFTs) and other energy-intensive use cases have led to somecompanies banning NFTs or efforts to ban crypto transactions
altogether.9 The success of Web3’s unique approaches tosustainability and carbon reduction depends on strong
infrastructures for on-the-ground verification and reporting.
At the roundtable, most participants did not mention the Merge,
Ethereum’s transition from proof of work to proof of stake, that
finally coalesced on September 15, 2022.10 This long-awaited change
purported to slash the network’s energy use by roughly 99 percent.

Not all graphics processing units (GPUs) previously mining Ethereum
just disappeared. The hardware and other infrastructures alreadybuilt for proof of work are still there and cannot be flipped likea switch. Diverse communities of actors are making all sorts ofdecisions about what to do with all this hardware. Perhaps some willmine another profitable coin. Maybe some will repurpose their GPU
infrastructures for other workloads. There’s even a small but vocal
contingent of Ethereum miners who have created a hard fork tocontinue mining Ethereum with a PoW consensus protocol.11
The upshot: Ethereum’s claim to have reduced its energy consumption
by 99 percent is complicated, as the PoW infrastructures built over thelast decade will not simply disappear. Some will, sure. But others will
become something different. What will they become? What can they
become? These are key questions for Intel and other industry leaders.
Although some of our participants attended Merge parties as
they waited for the Merge to happen at the stroke of midnight, theMerge and its subsequent fallout are good examples of the gap
between discourse and practice that we set out to address in thisevent with the Web3 community.12

8Bitcoin Energy Consumption Index, Digiconomist.net, as of 21 Oct. 2022. https://digiconomist.net/bitcoin-energy-consumption.

9

Tan, Eli, “Minecraft Bans NFTs, Sending One In-Game Builder’s Token Spiraling,” CoinDesk, Digital Currency Group, 20 July 2022. https://www.coindesk.com/
business/2022/07/20/minecraft-bans-nfts-sending-one-in-game-builders-token-spiraling/; and Sigalos, MacKenzie, 35“New York Just Passed a Bill Cracking Down on
Bitcoin Mining: Here’s Everything That’s in It,” CNBC CryptoWorld, CNBC LLC, NBCUniversal, 3 June 2022. https://www.cnbc.com/2022/06/03/heres-whats-in-newyorks-new-bitcoin-mining-ban-.html.

10 B
 uterin, Vitalik (@VitalikButerin), “And we finalized! Happy merge all,” Twitter, 15 Sept. 2022, 2:59 AM. https://twitter.com/VitalikButerin/
status/1570306185391378434; and “Proof of Stake,” Wikipedia, Wikimedia Foundation Inc., last edited 16 Sept. 2022. https://en.wikipedia.org/wiki/Proof_of_stake.
11 A
 guilar, Diana, “Ethereum Post-Merge Hard Forks Are Here. Now What?” Cointelegraph, 22 Sept. 2022. https://cointelegraph.com/news/ethereum-post-merge-hardforks-are-here-now-what.
12 weblin.io (@weblin), “Ethereum Merge Party,” Twitter, 15 Sept. 2022. https://twitter.com/i/broadcasts/1OwGWwjkdpRGQ.

WEB3 AND SUSTAINABILITY

5

For a team of green software researchers trying to anticipate

Carbon offsets are valuable as corporations attempt to reach theiremergent user needs, we viewed the roundtable as an opportunity

Net Zero goals, but more needs to be done to verify that carbon

to have a frank and open conversation about the relationshipcredits are reliable.16

between climate change and blockchains. When it comes to using
blockchains to further decarbonization efforts, or mitigating theharms of energy-intensive PoW systems, everyone has a different
working definition of sustainability and a different set of methods
for approaching it.

space is in need of standards, transparency, and accountability,
especially when it comes to claims about carbon offsets and otherefforts that are intended to benefit Indigenous communities andother marginalized communities in the Global South.

Right before the roundtable, Land Life, a Dutch carbon offsetting
firm, accidentally started a massive wildfire in Spain, undoing its
own tree-planting efforts.13 Sometimes technological interventions
have unforeseen effects. While blockchain is a small componentof Land Life’s operation, press coverage like this can make thepublic wary of green blockchain claims, especially around carbon
credits and offsets.14 Journalists have published stories debunking,or at least complicating, the claims of carbon offset companies:
the Thomson Reuters Foundation found that one pioneer inthis new market, Brazilian green climate tech firm Moss, which
purportedly had the support of Indigenous groups in the Amazon
and intended to protect the rainforest, bought carbon credits thatit said privately were of “low quality”―a judgment it later reversed
in response to the investigation―and mixed them with others toback its digital token, selling them on for far more than it paid.15
13

What is clear from such setbacks is that the sustainable blockchains

Because the Security and Exchange Commission implemented
new environmental, social, and governance (ESG) disclosure
requirements for publicly traded companies, ESG regulation ismaking carbon measurement and reporting more important thanever and is shaping practices on the ground as well as long-term
strategy and compliance measures. As the bulk of the world’s
PoW infrastructure has migrated to North America after China’s
outlawing of cryptocurrency mining in 2021, PoW miners are undermore pressure than ever to measure and report their emissions
accurately.17 There are also increasing efforts to communicate
better how PoW’s high energy use could aid in grid modernization
and/or incentivize more renewable energy construction.18
Beyond PoW, a vast ecosystem of projects is attempting toreimagine approaches to how sustainability and ESG are imaginedO ngweso Jr., Edward and Lorenzo Franceschi-Bicchierai, “Corporate Carbon Offset Company Accidentally Starts Devastating Wildfire,” Motherboard, Vice MediaGroup, 21 July 2022. https://www.vice.com/en/article/v7vdyx/corporate-carbonoffset-company-accidentally-starts-devastating-wildfire.

14“Explore Our Projects,” LandLifeCompany, Land Life Co., as of 3 Nov. 2022. https://landlifecompany.com/projects.

15

A sher-Schapiro, Avi and Fabio Teixeira, “Fears of ‘Subprime’ Carbon Assets Stall Crypto Rainforest Mission,” Context, Thomson Reuters Foundation, 13 Sept. 2022.
https://www.context.news/net-zero/long-read/fears-of-subprime-carbon-assets-stall-crypto-rainforest-mission.

16

Teixeira, Marcelo, “As the Amazon Burns, Brazilian Firms Tap Investors in New York for Help,” Reuters, Thomson Reuters Corp., 20 Sept. 2022. https://www.reuters.
com/business/sustainable-business/amazon-burns-brazilian-firms-tap-investors-new-york-help-2022-09-20/; and “Net Zero Coalition,” Climate Action, United
Nations, n.d. https://www.un.org/en/climatechange/net-zerocoalition.

17

M alik, Naureen S., “Texas Crypto Miners Face Inquiry from Warren Over Power Use,” Bloomberg News, Bloomberg LP, 12 Oct. 2022. https://www.bloomberg.com/
news/articles/2022-10-12/texas-crypto-miners-face-inquiry-from-warren-over-power-use.

18

Phillips, Nicola, “The White House Crypto Assets Report Supports Soluna’s Business Model,” Nicola Phillips Blog, Medium, 12 Sept. 2022. https://medium.com/
clean-integration/the-white-house-crypto-assets-report-supports-solunasbusiness-model-4002ba9b6915; and ARK Invest, “Bitcoin is Key to an Abundant, Clean
Energy Future,” Bitcoin Clean Energy Initiative Memorandum, Square Inc., April 2021. https://assets.ctfassets.net/2d5q1td6cyxq/5mRjc9X5LTXFFihIlTt7QK/
e7bcba47217b60423a01a357e036105e/BCEI_White_Paper.pdf.

WEB3 AND SUSTAINABILITY

6

in the first place (broadly called regenerative finance, or ReFi),

We hope that this report and other findings from this roundtable
19

including experimenting with the tokenizing of carbon credits.

can shed some light on the relationship between decarbonization

Some of these approaches have become quite controversial,and broader social justice efforts. In Web3 spaces, climate justice20

and it is unclear at this juncture how all of it will land. But, as

is often a “nice to have” rather than an essential part of thethe attendees of our roundtable emphasized, standardization

conversation, in part because tools for climate justice are as muchand regulation will help build and shape this space beyond thesocial, cultural, and political as they are technological. It’s sticky,

sometimes chaotic Web3 in which we currently find ourselves.

trying to think through these lenses. Most often, we fall short.

What will a more standardized and regulated Web3 look like?
Intel and other industry leaders have a rare opportunity now toanswer this question. Open source solutions are necessarily apart of the answer. A blockchain is, in effect, little more than a
distributed ledger protocol that generates consensus throughvarious types of participation and input from actors acrossits associated network. As a technology, blockchain is notinherently decentralized, but it can encourage certain structures

Climate justice also requires thinking through multiple scales atthe same time. The issues that we are grappling with in Web3
are analogous to problems across the entire tech industry andbeyond. As an ecosystem still in its early days, we are thinking
hard about climate impacts and carbon accounting from thevery start. We also hope that this event can seed new ideas anddirections, because we can only move forward, toward a greener
future, collectively.

of decentralization. It is not inherently open source, but, as

Tamara Kneese

an infrastructure, it can productively encourage open sourceIntelsolutions. And, of course, many climate-related blockchain
projects are explicitly open source, including Filecoin Green,

Zane Griffin Talley Cooper

Energy Web, KlimaDAO, and Gitcoin.
There are signals that open source sustainable blockchains will beof increasing financial and social interest. Around the same time
as our event, Filecoin, a completely open source project, hosted
a sustainable blockchains summit in Paris for a two-day summitof expert talks, workshops, and deep dives featuring top thought
leaders in sustainability.21 Open source blockchains help ensure
greater transparency while making it easier for various companies
and agencies to collaborate.

19

O wocki, Kevin, “How Crypto is Regenerating the World,” Bankless Newsletter, 18 May 2022. https://newsletter.banklesshq.com/p/how-crypto-is-regenerating-theworld; and Fogel, Phil, Ben Noel, and Sebastian Frankel, “Regenerative Finance is the Future of Web3,” FlowCarbon, Flow Carbon Inc., 21 July 2022. https://www.
flowcarbon.com/knowcarbon/regenerative-finance-is-the-future-of-web3.

20C alma, Justine, “Crypto Can’t Fix Carbon Offsets, But Crypto Fans Are Trying Anyway,” The Verge, Vox Media LLC, 18 Aug. 2022. https://www.theverge.

21F ilecoin, “Highlight Video Filecoin Meetup Paris 2022,” YouTube.com, 26 July 2022. https://www.youtube.com/watch?v=qjBXj2bHixk.

com/2022/8/18/23310254/carbon-offsetcredits-crypto-tokens-adam-neumann-wework.

WEB3 AND SUSTAINABILITY

7

Executive summary
The energy needed
to run the blockchain
network is also theprimary security
mechanism forprotecting thedigital assets
stored on it.

The read-write-own
Web3 is about
asserting rights ofpersonhood,privacy, andproperty of open
and trustworthy
data ecosystems.

As the effects ofclimate change
worsen, digital

We need better
field data andpeer-reviewed
research on theassets that use more
electricity will lookless attractive toinvestors.

energy usedin mining
cryptocurrencies.

The success of any
sustainability projectWeb3 gives us a
new way of organizing

depends on thecontext in which weembed the project.

and incentivizing thework of society whereindividuals own andcontrol their assets.

The diﬃculty of
tracking greenhousegas emissions

Project successrelies on removing

silos, taking aninterdisciplinary
approach, anddeveloping policyin parallel.

makes carbon
offsets unreliablein verifying
progress.

Technology thattransfers the heat ofmining devices to district
energy systems holds

promise in heating
homes and buildings.

Public policies could
help reduce e-waste

by incentivizing
circular-economy
initiatives, direct carbon
capture, and renewables.

A neutral dashboard
running on a publicblockchain could help

the industry alignincentives andconfirm claims about
recycling practices.
Regulatory clarity,
standards formeasuring andreporting, andindependent reviewsof energy calculations

would help toincrease investment.

Copyright © 2023 The Linux Foundation | January 2023. This report is licensed under the Creative Commons Attribution-NoDerivatives 4.0 International Public License.

Framing the conversation
In July 2022 Intel and the Linux Foundation convened a

What is unclear—and what this research brief hopes to help

multistakeholder roundtable on blockchain and sustainability

clarify—is whether blockchain as a foundational layer of Web3 isunder Chatham House Rule. The goals of the event sponsors

part of the problem, part of the solution, or both.

1

were several, including• “Thinking critically about the meaning and the practices of

Sustainability in actionable terms

sustainability across Web3’s diverse communities and theParticipants discussed the gist of sustainability. “It’s a term I oftensocial, cultural, political, and technological relationships atbristle at,” said one person. “It’s incredibly vague. And so I always

multiple scales.”ask, ‘What are we trying to sustain for whom and for how long?

• “Surfacing and seeding new ideas, new directions, and newvalue across sectors as well, because we can move toward agreener and more just future, only collectively.”• Exploring ways to measure and manage the environmental
effects of innovation better and organize ourselves better tominimize the climate impact of our societies.

What is the history? What are the power dynamics?’” Anothercalled it “the opposite of a liquidation in a financial sense,” notthrowing good money after bad but probing deeply to understandwhat we invested in and why. That sounds simple, but withoutleadership continuity or institutional memory, the reasons forsupporting a sustainability project may not be obvious to the
executives inheriting it.

Among those representing the blockchain space were
technologists, academic researchers, and climate advocatesgathered via videoconference to have frank and open
conversations about climate change and Web3 technologies.
What has become clearer is twofold:

Several borrowed or built on the United Nations’ enduring
definition of sustainable development—“development that meetsthe needs of the present without compromising the abilityof future generations to meet their own needs.”4 The United
Nations has also suggested that we can manage the effects of our• Big data as a global resource, mobile and social media
as data gathering and reporting tools, and Internet
communications and computing capabilities, including
analytics and decision sciences, are instrumental toanswering the how.2“technology and social organization on environmental resources …
to make way for a new era of economic growth.”5
Others expanded the meaning to include technology’s “viability
over the long term—whether people use it, whether a community
has formed around it—not just its environmental impact.” Going• As the saying goes, the future is already here and unequallyfurther in terms of shared open source software like the Linux

distributed, but its benefits and externalities are unequallykernel or the Bitcoin protocols, the discussants broke sustainability

distributed as well, with the “poorest and most marginalized

into three measures:

people (bearing) the brunt of the burden” long before thefuture actually reaches them.3• Sustainable development means that a project retains
and funds core developers (core devs) for the long term,
cultivates new core devs, and rotates talent over time;WEB3 AND SUSTAINABILITY

9• Sustainable participation means that a project continuallycommunicates with its community, welcomes input in criticaldecisions, and brings the community along; and• Sustainable operation so that use of the technology at any
scale and in any context does no harm and maybe even helps
the environment.

on the winning solution and race to solve the next problem.
The Ethereum blockchain brought significant improvements when
launched in 2015. Led by Vitalik Buterin, its creators advanced thedesign space in two significant ways.8• First, where the Bitcoin blockchain served a special purpose

But these are not just about the numbers—the number of people,

as a distributed ledger—issuing a fixed number of Bitcoinsof interactions, and whether a project holds firm, forks, or fails—

and transferring them securely peer to peer without

though those are important. Fully appreciating what roundtablesome central authority—Ethereum served as a virtual

participants had to say requires us to step back and look at Web3

computational machine for running all sorts of computations

and how we got here.

and applications in a decentralized manner (dapps).
• Second, its creators planned to migrate it from the proof-

Growth of participation in Web3

of-work consensus mechanism to a proof-of-stake model

People have been using the Bitcoin blockchain as a store of value,

in a process they called “the Merge,” which took place ina source of income, and a stimulus for innovation since 2009.

September 2022.9 As of this writing, it was tracking around

As of this writing, there were 977 thousand active addresses

463 thousand active addresses, with over 900 contributors

and over 800 code contributors and handful of active core devs,

and a handful of quite active devs over time.10

relevant to our measure of sustainable participation.6 Like Web 1,
the read-only Internet, it is distributed and open source for allpractical purposes; unlike Web 2, the read-write Internet, nobody
controls it, though governments have attempted to restrict accessto it by controlling telecommunications service providers. Like gold
as a store of value, Bitcoin is programmed for scarcity, and its pricehas comparatively low correlation with conventional asset classes
like stocks and bonds, making Bitcoin a tempting hedge against
inflation.7

People have been building on these blockchains, adapting theirsoftware principles into new protocols, platforms, and dapps, andcombining them with artificial intelligence, things like sensors,
three-dimensional graphics, and augmented reality hardware, allcontinually connected via Wi-Fi, 5G, satellite, or broadband so thatpeople anywhere in the world can create culture together in realand virtual environments.11
Web3, the read-write-own Web, is intrinsically about this open

For income, anyone can download the Bitcoin software andvolunteer their hardware and electricity to run it. The software
itself does the rest: it verifies transactions, assembles blocks oftransactions, solves a computationally difficult problem, shows
the proof-of-work—all to win the right to create the next blockand receive a quantity of Bitcoin. The parties that do that are
called miners. They each maintain a copy of the chain of blocks, orWEB3 AND SUSTAINABILITY

blockchain. Given a miner’s proof-of-work, they reach consensus

10

culture—the coordination, confirmation, and recognition of effort,
the peer-to-peer exchange and tracking of value, and the assertionof rights of personhood, privacy, and property in ecosystems
forming around open and trustworthy data. One roundtableparticipant observed, “The significant interest in blockchain
in various geographies, most notably in Europe, includes its
usefulness in the area of privacy. It seems that the technology andrelated architecture are good.”

The challenges at a glance
By and large, roundtable participants underscored that “theIn a spot poll, roundtable participants weighed in on theimperative is to address blockchain’s climate impact,” as interest

perceived sustainability challenges facing Web3 technologies

in owning digital assets grows. An online survey conducted by(FIGURE 1 ). Foremost was the energy consumed by blockchains

OnePoll in March 2022 revealed that 53 percent of adult Americans

using proof-of-work consensus mechanisms; second was the lackbelieve crypto is the “future of finance,” but a third of them want toof awareness and understanding of the purpose of that energy

see more products with low carbon footprints.12 Some members

and the capabilities of Web3 innovation; third were social andof the roundtable expressed similar trepidation. Said one person,

political concerns, particularly the context of these discussions;“We strongly support digital assets. But as effects of climate

and fourth was the need for technological and financial accountingchange grow worse, digital assets that use more electricity will

standards and regulations. We explore each topic in turn.

look less and less attractive to investors.”

FIGURE 1

WHAT IS THE BIGGEST SUSTAINABILITY CHALLENGE FACING WEB3?
Roundtable poll results (N=25)
Energy consumption of proof of work

32%

Education and awareness

28%
24%

Social and political issues

Standardization and regulation

WEB3 AND SUSTAINABILITY

16%

11

Energy consumption of proof-of-work
The proof-of-work consensus mechanism pioneered for themining pools, corporate mining firms like GRIID, Hive, and Argo

Bitcoin blockchain and cloned or adapted by other blockchain

formed to warehouse these ASICs for industrial operation. “Thatdevelopers has been a key driver of this concern, with 175 such

led to centralization” of mining and making money, observed thechains (like Dogecoin and earlier forks of Ethereum and Bitcoin)participant. In this bear crypto market, mining operations may

13listed on CoinMarketCap. As Bitcoin’s price rises, more parties
want to mine. The more miners, the more difficult the puzzle; themore difficult the puzzle, the more energy required to solve it.

consolidate further.16
Several roundtable participants pointed to the difficulty ofagreeing on the total energy used because of the different“We need to examine the system as it is and see what themethods of estimation. For example, one of the sites referenced

entrenched powers or incentive structures already are, toduring the roundtable, the Cambridge Centre for Alternative

determine how we might improve those incentive structures going

Finance (CCAF), is said to take a bottom-up approach, starting

forward,” a roundtable member suggested. “External incentive

with “simplistic weighting of profitable hardware,” manufacturer

structures develop that are very important when we’re examining

specifications of publicly available devices, and electricity priceproof-of-work.”

estimates for its calculations.17 By CCAF’s annualized calculations,the global Bitcoin network uses 93.33 terawatt-hours (tWh) ofenergy, as of this writing.18 In contrast, the Digiconimist takes a

Perverse incentives or the cost of trust?
The original vision of the Bitcoin blockchain was “one central
processing unit (CPU), one vote” or one chance to come up withthe winning solution first, said one participant. Some have likened
the process to a lottery held every ten minutes, where the Bitcoin
protocols arbitrarily choose a winner. Like a lottery, people foundprice miners pay per kWh of electricity, then converting thosecosts to energy consumption.19 The resulting annualized figure,131.43 tWh, assumes that mining operations consume 60 percentof mining income.20

that if they used their graphics processing units (GPUs) or field“Such assumption-based calculations are prone to error,”programmable gate arrays (FPGAs), bought more and better

according to Jonathan Koomey, an expert in the energy ofdevices, or simply pooled their resources, then they’d increase

computing. “Economic parameters (like Bitcoin prices) are volatile

their odds of winning.14

and are at best imperfectly correlated with electricity use.” 21

Another participant called this a cycle of “perverse incentives—
the more mining hardware, the more likely to make money in a
PoW system.” Hardware manufacturers developed applicationspecific integrated circuit (ASIC) mining devices “able to do one
million times more than regular machines,” the participant said.
Some of the latest models of ASIC Bitcoin miners can perform 110
and 148 terahashes a second (TH/s) using 3,250 to 3,850 watts
an hour, at a cost between $3,000 and $6,000.15 In addition to

WEB3 AND SUSTAINABILITY

top-down approach, estimating total mining revenues and the12

Koomey analyzed the methodologies behind six of the oft-cited
estimates of Bitcoin’s total electricity use and found that noneof them dealt thoroughly with uncertainty and the geographic
variations of mining. He recalled the “erroneous reports about
information technology’s electricity use” in the year 2000: all“these claims turned out to be incorrect, but it took years of peerreviewed research to prove it.” He concluded that we need “farmore actual measured data” as well as “infrastructure overheadelectricity use,” neither of which is readily available yet.

TABLE 1

Administration’s fuel economy standards and the Environmental

KOOMEY’S BEST PRACTICES FOR
ACCURATE COMPUTING ENERGY ANALYSIS

Protection Agency’s emissions controls have helped to drive those

Do’s

Still, the level of energy is a proxy for the level of security of the

Build from the bottom up

Bitcoin blockchain. As the energy costs rise, the cost of hacking
the Bitcoin network may outweigh the financial benefits of doing

Report estimates to the day
Collect measured data for components and systems in the field
Address locational variations properly for the sites of mining operations
Assess uncertainties explicitly and completely
Provide complete, accurate, and transparent documentation
Don’tsso. Some roundtable participants saw this energy consumption
as a feature, not a bug. Said one person, “For the first time, wehave a technological platform that solves the trust problem ina ubiquitous and safe way, where no central actor can reverse”
what users are trying to achieve together. For holders of Bitcoin
in regions of the world with untrustworthy institutions, the level

Guess and give rough estimates about underlying dataof energy consumption gives them confidence that their holdings

Extrapolate into the future

are less vulnerable to arbitrary seizure or devaluation. As an

SOURCE: JONATHAN KOOMEY, “ESTIMATING BITCOIN ELECTRICITY USE: A
BEGINNER’S GUIDE,” COIN CENTER, MAY 2019.

One roundtable participant explained the qualms with Bitcoin’s
carbon footprint: “We’re very concerned about digital assets like

Argentine Bitcoin entrepreneur told Jill Carlson, co-founder of
the Open Money Initiative, “You cannot hold the peso. That is likeholding an ice cream cone in this heat. It’s melting. You need to dosomething.” 24

Bitcoin that are wasteful by design. The incentives baked into the

A roundtable participant explained: “The design creates a directcode call for using more and more electricity, the more popular

relationship between the computing power needed to protect thethey become, not less and less.” This person gave an example:

network and the assets stored on it. Energy is the primary security“Our cars are using less and less energy, and they are using

mechanism for the asset.” The primary methods of security for fiat

electricity more efficiently. We need all our assets to do that.”currencies are special printing to deter counterfeiting, armored

For sure, the hardware used to mine cryptocurrencies has

vehicles for transportation, and bank branches with vaults andbecome more efficient over time (FIGURE 2 ).

local distribution. Of several studies comparing the energy of theBut, roundtable participants argued, incentives should encourage
the creation of assets, digital or physical, that use less energy
more efficiently, if they use energy at all. For example, theEnvironmental Protection Agency’s ENERGY STAR program forelectronics, office equipment, and other products with digitalcomponents saved American consumers “more than 520 billion
kilowatt-hours of electricity and … $42 billion in energy costs” in2020 alone.22 In the absence of industry-wide agreement on andcommitment to targets and standards, governments may have arole: such regulations as the US National Highway Traffic Safety
WEB3 AND SUSTAINABILITY

auto energy improvements.23

13

Bitcoin network with that of the global payment system, the one
by consulting firm Valuechain isolated these three components.25
It estimated that the energy consumed each year in printing andminting (17.61 tWh), cash in transit (166 tWh), and bank branches(175.3 tWh) was 358.91 tWh, more than double the highest Bitcoin
estimation.26 However, these studies also made the kind of
top-down assumptions that tend to overestimate electricity usage.

FIGURE 2

INCREASING EFFICIENCY OF HARDWARE USED FOR BITCOIN MINING
Each blue diamond represents a different device, with the oldest machines plotting in thelower left quadrant and the newer ones in the upper right quadrant.

250.0000000

150.0000000

100.0000000

Hashing power (terahashes per second)

SOURCE OF DATA: CAMBRIDGE BITCOIN ELECTRICITY CONSUMPTION INDEX MINING EQUIPMENT LIST, AS OF 22 SEPT. 2022.

WEB3 AND SUSTAINABILITY

0.05000.06500.05500.04310.02950.05400.04500.05200.09570.02950.02750.02600.08570.06360.08500.05500.07880.07730.05510.04500.05500.06200.04940.11000.08750.09800.13640.14710.25680.09490.09430.25810.12610.12610.0000000

554.8148
9.91670.510850.0000000

14313.7255

Eﬃciency (joules per gigahash)200.0000000

14

uses modified Byzantine fault tolerance with proof of history,

More computationally efficientand scalable blockchains

designed to confirm the passage of time between two events in a

“Blockchain technologies often rely on a high degree of
redundancy,” said one roundtable participant. In the Bitcoin

One participant mentioned the programmatic proof-of-workblockchain, every miner is racing to solve the same problem.

(ProgPoW) algorithm as an improvement over ethash (the hashing“If enough participants can build the same answer, then it isalgorithm Ethereum used instead of SHA-256).30 It was designed

probably the right answer. But redundancy is inevitably connected

to limit further “the amount of ASIC computers that’d be mining

with the greater expense of cycles and therefore energy.” This

ether and transition to more GPUs that users could repurpose inperson said that “concerns about the environmental impact are

the future to solve other proofs used for privacy technology.”

driving blockchain technologists to use computations in ways that
improve efficiencies and scalability.”

Roundtable participants also mentioned Cardano’s research

Others pointed to sharding as a case in point, where users “split

that are as computationally difficult as the Bitcoin blockchain’s

the work to many different machines, get to the network packet

to maintain the blockchain’s security, but yield results with real-level, and have every single machine doing some specific work

world relevance such as event scheduling and logistics planning.32

that is deterministic,” but it all happens off-chain. Another was the

However, choosing those problems may require some domain-

Lightning Network, a Layer 2 protocol that two parties can use to

specific knowledge, and verifying results may be a challenge

process a series of transactions between them using an off-chain

unless the problems are predominately mathematical, because

payment channel, then broadcast the last state of the channel tothose tend to have “a large repertoire of probabilistic verification

the Bitcoin blockchain.27

methods.” 33

Foremost was proof of stake, where the security comes not

A couple of roundtable participants were uncomfortable withfrom burning energy but from staking tokens and losing them ifsuch an approach: “We’re talking about which workloads deserve

not acting in the best interest of the blockchain. Vitalik Buterinenergy, the value of workloads. … I think we’re in dangerous,

explained: with proof-of-work, “cost of attack and cost of defense

dangerous territory when we’re talking about worthiness ofare at a 1:1 ratio, so there is no defender’s advantage. Proof of

workloads.” China’s social credit scoring system came to mind,

stake breaks this symmetry by relying not on rewards for security,

through which the government surveils and assigns positive andbut rather penalties” for breaking trust.

WEB3 AND SUSTAINABILITY

cryptographic manner.29

on proof of useful work (PoUW).31 Its goal is to solve problems

28

Ethereum completed

negative values to citizens’ conduct, ranging from volunteering

its historic shift to proof of stake on 15 September 2022, and theand donating blood (positives) to misbehaving on the subway andestimated energy use plummeted (FIGURE 3).

protesting politically in person or online (negatives).34

The Merge lowered the energy needed to mint and trade digital

A participant suggested that they “focus not on what gets to use

assets such as non-fungible tokens (NFTs) on Ethereum. That’s aelectricity. Focus on meeting demand in sustainable ways. … Focus

real positive for holders and advocates of this very popular asseton the value of load in terms of demand side management. Useclass. Other blockchains that support NFTs also use alternativethat selectively as a tool for bringing more renewables online andconsensus mechanisms: Cardano uses proof of stake, and Solana

addressing intermittency issues.”

15

FIGURE 3

ETHEREUM’S ENERGY CONSUMPTION BEFORE AND AFTER THE MERGE
100
90
80

TWh/Year

70
60
50
40
30
20
10
The Merge0
11/20/17

05/20/18

11 /20/18

05/20/19

11 /20/20

Estimate TWh/Year

11/20/20

Minimum TWh/Year

SOURCE OF DATA: ETHEREUM-ENERGY-CONSUMPTION, AS OF 3 NOV. 2022.

WEB3 AND SUSTAINABILITY

05/20/19

16

05/20/21

11/20/20

05/20/22

Roundtable participants expressed concern over Ethereum’s

explained that, in practice, machines depreciate in value over three

security, now that energy is no longer the chief means of

to five years, at which point their owners may decide to resell orprotecting the assets managed on it. According to Chainalysis,

recycle them.40 Indeed, amid COVID-related disruptions to thethieves nicked $1.9 billion worth of cryptocurrency through July

semiconductor supply chain, the secondary market for equipment

2022 this year, largely from blockchains not using proof-of-work—

has grown, with Compass Mining and FoundryX among the mining

and largely from decentralized finance (DeFi) services running atop

pools aggregating and reselling old rigs.41 In anticipation of theand between these chains.35 Chainalysis urged “the industry toMerge, several of the other big mining operations developed

shore up security (of decentralized applications and smart contract

plans to pivot their GPUs from PoW mining to deliver “artificialcode) and educate consumers on how to find safe projects tointelligence, machine learning, and visual effects rendering

invest in.” It also urged law enforcement to “continue developing

services.” 42(its) ability to seize stolen cryptocurrency to the point that hacks
are no longer worthwhile.” 36

heat sinks and casing of “Bitcoin ASICs are almost entirely
recyclable, and contain no toxic or hard-to-recycle components,

Hardware production and disposal

unlike conventional sources of e-waste like cell phones,” with

Nearly everyone has heard of Gordon Moore’s law, that thecircuit boards containing arsenic and lead as well as gold, copper,

processing power of a chip doubles every 18 months or so.

and platinum and rechargeable batteries containing cobalt andLesser known is Jon Koomey’s law, that the energy efficiency ofcomputers doubles in roughly that same period (FIGURE 2 ).

37

lithium.43 Using blockchains to track these electronics could help
manage e-waste. For example, when telco giant Telefónica learned

Combined, these advances have given each CPU, GPU, and ASIC

that the use of digital technology in Spanish households had“Bitcoin mining device … an estimated 18-month life cycle” before

surged in 2021, resulting “in an increase in device consumption andit becomes unprofitable at mining and is discarded, resold, or

wasted electronic equipment,” it decided to leverage its managed

repurposed, said a roundtable member. (Short of quantum

blockchain, Trust OS, for tracking reusable and recyclable

computing, however, these performance gains are bumping up

products.44 It incorporated TrustID using the Hyperledger Fabricagainst the physics of packing twice as many transistors onto

framework, to identify each device, and Exxita’s “Be Circular”

a chip and manufacturing it at scale.38) “We’re leaving out the

AI platform Aitana to predict the repairability of devices andhardware engineering side” of environmental concerns about

recoverability of precious metals.45 Telefónica expects thisWeb3 technologies, said another participant. “As an industry,

initiative to extend the lifespan of products and increase the

we’re still not reckoning with the amount of waste in producing theproper handling of toxic materials.

hardware that run these systems.”
One study of Bitcoin mining’s e-waste addressed both thoseissues, pegging the average profitable lifespan of a miner at only
1.29 years and venturing an annualized estimate of 30.7 metrickilotons (kt) of e-waste associated with discarded equipment.39
Members of the Bitcoin mining community sent a letter refuting
these findings to the Environmental Protection Agency. They

WEB3 AND SUSTAINABILITY

What’s more, the letter to the EPA stressed that the aluminum

17

The Circular Drive Initiative is a similar effort to repurpose thehardware used for data storage.46 It leverages the Chia blockchain
network, which features the ecologically friendly proof-of-spacetime (PoST) consensus mechanism, to optimize the supply chain
for storage hardware reuse.47 It intends to address the data
security risks of such reuse by deploying the IEEE standard forTABLE 2

CONSENSUS MECHANISMS: A COMPARISON OF DESIGN TRADE-OFFS
NAME

GOALS

ADVANTAGESDISADVANTAGES

TYPEEXAMPLES

Proof-of-work(PoW)

Provide acomputationallydifficult barrier topublishing blocks.

Difficult to flood
network with badblocks (denial ofservice attack).

Computationally intensive by
design: high power consumption,
hardware arms race.

Permissionlesscryptocurrencies

Bitcoin, forksof Bitcoin andEthereum,
many others

Enable transactions
between untrusted
participants.

Open to anyone withhardware to solve thepuzzle.

Enable a lesscomputationallyintensive barrier topublishing blocks.

Less computationallyintensive than PoW.

Permissionlesscryptocurrencies

Ethereum,
CardanoOuroboros

Permissionlesscryptocurrencies

CardanoOfelimos,Primecoin

Permissionlesscryptocurrencies

SolanaProof of stake(PoS)

Enable transactions
between untrusted
participants.
Proof ofuseful work
(PoUW)

Open to anyone
who wishes to stake
cryptocurrencies.
Stakeholders control
the system.

Provide acomputationallydifficult barrier topublishing blocks.

Difficult to flood
network with badblocks (denial ofservice attack).

Enable transactions
between untrusted
participants.

Open to anyone withhardware to solve thepuzzle.

Potential for 51% attack by
obtaining enough computational
power.
Stakeholders control the system.
Nothing prevents formation of acentralized pool of stakeholders.
Potential for 51% attack by
obtaining enough financial power.

Computationally intensive by
design but not a waste of energy.
Potential for 51% attack by
obtaining enough computational
power.

Can be zero-knowledge.
Proof ofhistory (PoH)on PoS

Enable a lesscomputationallyintensive barrier topublishing blocks.
Enable transactions
between untrusted
participants.

Processes transactions
extremely fast.
Creates a historical
record for proving an
event occurred at a
specific time.

Validator hardware must meetstrict specifications; limits
decentralization.
Estimated to process about
40 petabytes of data per year;
individuals may not have storage
capacity.

SOURCES: VAN DER LINDEN, KEVIN, “WHAT IS PROOF OF HISTORY?” ANYCOIN DIRECT, PHOENIX PAYMENTS BV, 5 JULY 2022. ; FELIX HOFFMAN, “CHALLENGES OF
PROOF-OF-USEFUL-WORK,” CORNELL UNIV., 9 SEPT. 2022. DYLAN YAGA, PETER MELL, NIK ROBY, AND KAREN SCARFONE, “BLOCKCHAIN TECHNOLOGY OVERVIEW,”NISTIR 8202, 3 OCT. 2018.

WEB3 AND SUSTAINABILITY

18

sanitizing storage.48 Members hope to scale it up into a viable

tap relatively low-cost and abundant renewable energy.54 If miners

circular economy business, potentially targeting sectors that would

significantly increased their use of renewables that didn’t fluctuate

benefit from more affordable equipment.

with the seasons, then they could help mitigate Bitcoin’s carbon

Another team of researchers in engineering and computer sciencecreated an Ethereum-based Internet of Things-enabled system

impact. For example, the start-up Bitzero Blockchain announcedplans to develop 200 megawatts worth of data centers in North
Dakota over the next three years.55 It chose North Dakota because

for tracking and tracing electronic devices across their productlife cycle using a set of smart contracts.49 To minimize fraud, they
developed reputation-centric criteria for participation, issuedof the state’s clear “sales-and-use tax break on new computing
equipment.” 56 Moreover, North Dakota’s geology and its laws
lend themselves to underground storage of carbon dioxide andcertificates of responsible disposal, and integrated with theInterplanetary File System to store images, proofs of destruction,
licenses, and other evidence in a decentralized, immutable, andnatural gas.57 Bitzero intends to situate one of data centers by ahuge greenhouse that the Mandan, Hidatsa, and Arikara Nation isbuilding near the Missouri river.58 If all goes well, the Garrison Dam

privacy-preserving manner. Their testing demonstrated the
security and economic viability of such a system. Using an open
source blockchain as a sort of neutral, third-party dashboard

will hydropower the data center, Bitzero will capture and transfer its
heat to the Three Affiliated Tribes’ greenhouse, and tribal members
will achieve food sovereignty with fresh and healthy options.

for e-waste would help the industry as well as consumers andregulators to confirm corporate claims about “safe, ethical, andIn a similar experiment in northern Sweden, the municipality ofgreen recycling practices” and “align behaviors across recyclers

Boden began building a greenhouse to be warmed by waste heattoward a circular economy.”

50

from Genesis Mining and HIVE Blockchain data centers poweredby the Lule river.59 Boden, which “imports about 95 percent of its

Adoption of sustainable energy
and new approaches

vegetables,” also wants to cultivate its own fresh vegetables year-

The terawatt estimations above of the Bitcoin blockchain’s

Bitzero’s heat recycling project is among the start-up’s portfolio

consumption (93.33 tWh–131.43 tWh) do not tell us anything about

of initiatives to achieve what it calls “zero carbon displacement,”

the carbon intensity of the energy used; renewables instead of

meaning that its use of 100 percent renewables will not force its

fossil fuels can make a difference.51 Based on a 2021 survey, CCAF

neighbors on the same grid to revert to fossil fuels.61 That calls for

estimated that renewable energy, chiefly hydroelectric during thehourly accounting of energy consumption to support its claims,

wet season, powered 39 percent of PoW mining devices.52 The

since solar and wind generate excess power during the day but

round through this reuse of energy.60

Bitcoin Mining Council conducted its own survey and determinedthat 59.5 percent of miners were using “sustainable electricity.”

53

collections of warehouse scale computers … emit more carbon

As one roundtable participant noted, “Quantitative measures likethan needed if operated without regard to the variations inthis are complicated and contested by different groups. This is why

carbon intensity” by time of day, location, and types of energy

I argue for more qualitative on-site research across regions.”

generation.62 They’ve come up with what they call a carbon-aware

Many of the corporate miners have already located their data
centers in places like Canada, Iceland, and Sweden where they can
WEB3 AND SUSTAINABILITY

little at night. That’s what innovators at Google found: “Networked

19

computing solution that “actively minimizes electricity-basedcarbon footprint and power infrastructure costs by delaying

temporally flexible workloads.”63 They used carbon intensity

Lee told Cointelegraph, “We will become a better battery for (clean

forecasts to train their prediction models of demand, and theyenergy sources) to solve the energy-saving and energy storage

used risk-aware optimization to create what they called virtual

problem.” 64

capacity curves (FIGURE 4), which proved effective in managing theworkloads of their data centers to minimize carbon emissions.
Large PoW mining facilities might explore such use of artificial
intelligence to manage energy loads.

Bitzero plans to build “an assembly and distribution hub forgraphene battery technology” for storing excess energy. According
to the European Space Agency (ESA) and others, “graphene is
the single greatest discovery of 21st century materials science”:

Effective storage is another critical piece of these solutions.

when manufacturers add an ultra-thin layer of the material to

For example, the Eurasia-based Bitcoin mining operator

conventional Lithium ion cells, the resulting batteries have greater

SAITech has developed heat capture technology to recover thecapacity and longer lives.65 What’s more, the manufacturing

heat that its mining devices generate. It claims that it can reuseprocess can use water and natural cellulose instead of toxic

nearly 90 percent of this heat. Its chief executive officer Arthur

solvents and binders.66

FIGURE 4

GOOGLE’S CARBON-AWARE COMPUTING SOLUTION FOR DATACENTERS
Low carbon intensity

High carbon intensity

Low carbon intensity

Default cluster capacity
Virtualcapacity curve

Load delayed
to next day
New load

Prior day’s
ﬂexible load

Old load

Inﬂexible load

Midnight

Noon

Midnight

ANA RADOVANOVIC ET AL., EFFECT OF USING VCC MECHANISM FOR LOAD SHAPING IN A CLUSTER, 2021. ADAPTED UNDER CC BY 4.0 LICENSE.

WEB3 AND SUSTAINABILITY

20

Another approach is to use flared gas for Bitcoin mining. That’s

city’s hydronic district energy system, a discrete network of pipes

gas that an oil company would just burn off otherwise, becausethat heat buildings by circulating hot water.70 Through this method,

capturing and transmitting it would not be cost-effective, whereas

MintGreen expects to recover 96 percent of the heat wasted in its

using it on the spot to power Bitcoin mining operations minimizes

Bitcoin mining operations.

the waste. Enerplus, Equinor, Exxon, and ConocoPhillips have
all jumped into the game, getting their field equipment fromshops like Crusoe Energy Systems and EZ Blockchain, with mobile
technology to mitigate flared, stranded, and landfill gas.67 “Whatdoes this mean for royalty owners?” asked lawyer John McFarland
on behalf of land and mineral owners. “Maybe they’ll get someroyalty on gas sold to the Bitcoin miners, rather than seeing theirgas go up in smoke.”68 That’s a bonus.

weapon for climate action and human health” because it connects“renewables, waste heat, thermal storage, power grids, thermal
grids, and heat pumps, delivering up to 50 percent less primaryenergy consumption for heating.”71 The US Department of Energy
has also recognized the benefits of district energy: “By combining
loads for multiple buildings, (these) systems create economies ofscale that help reduce energy costs and enable the use of high-

The Canadian tech start-up MintGreen has created what it calls

efficiency technologies such as combined heat and power.”72

a “digital boiler”: it places its Bitcoin miners in a chamber and

In Web3 parlance, district energy is one of those composable

pumps coolant over those miners to a device known as a heatstructures that can leverage artificial intelligence in “continuous

exchanger, which transfers the heat from one liquid (or gas) tooperational monitoring, advanced load forecasting, and advanced

another liquid (or gas) without the two ever touching. (The French

controls,” integrate with blockchain-managed microgrids, increase

start-up WisElement has developed its own boiler solution called

energy grid resilience, and contribute to regional grids in crises.73

Sato as a supplement to “houses equipped with water-based

If the digital boiler delivers, and the system’s thermal storage cancentral heating systems. … as good as any electric boiler with a 99

effectively capture excess heat for use in Canada’s winter, then it

69

percent efficiency rate.” ) MintGreen has partnered with North
Vancouver’s Lonsdale Energy Corporation, which manages the

WEB3 AND SUSTAINABILITYThe UN Environment Programme has called district energy “a secret21

will be an exciting advance.

FIGURE 5

WHAT IS THE MOST IMPORTANT FACTOR WHEN
ASSESSING A CRYPTOCURRENCY INVESTMENT?
0%

10%

20%

30%

40%

50%

60%

Education and awareness:
Carbon offsets
According to an NBC News poll, “one in five Americans has
invested in, traded or used cryptocurrency,” with 40 percent
of Black Americans reporting that they had traded or usedcrypto. They cited “better transaction speeds, lower costs,

Company
history

privacy, security, and an opportunity to provide underbanked
communities with financial services” as reasons for using
cryptocurrencies.74 FIGURE 5 shows what mattered to different
age groups as they considered buying Bitcoin and othercryptocurrencies: potential return on investment (ROI) far
outweighed crypto’s potential impact on climate. Those who

Cost
to buypublished the poll interpreted these results as indicative of
respondents’ lack of understanding of how crypto works.75
The roundtable identified carbon markets as needing greaterattention in terms of communications and education. The
discussion juxtaposed centralized and decentralized systems
for measuring and tracking data: “We live in a society of

Climateimpactcentralized data, and centralized organizations controlling that
data. When any group controls data, there’s a natural incentive
to use that data for the group’s benefit. That’s how today’s
economy is set up. So, it’s very hard for everybody else to
figure out what’s actually going on.”Participants observed that “blockchain people are supporting

Potential
ROI

existing industries and existing frameworks out there, anddoing that doesn’t leverage the true idea of a decentralized
network.” Demand from corporate shareholders forenvironmentally sound investments, combined with the US

Age 18 to 25

Age 26 to 41

Age 42 to 57

Age 58 to 76

Securities and Exchange Commission’s new requirement toAge 77+

disclose certain climate-related data in corporate registrations

FORBES ADVISOR COMMISSIONED MARKET RESEARCH COMPANY ONEPOLL TO CONDUCT AN ONLINE SURVEY
OF 2,000 US ADULTS IN MAY 2022. THE MARGIN OF ERROR IS +/- 2.2 POINTS WITH 95% CONFIDENCE. SOURCEOF DATA: WAYNE DUGGAN, “SURVEY: 84% OF AMERICANS DON’T BELIEVE THAT BITCOIN INVESTMENTS ARE A
THREAT TO THE ENVIRONMENT,” FORBES ADVISOR, FORBES MEDIA LLC, 31 MAY 2022.

WEB3 AND SUSTAINABILITY

22

and annual reports, has revved up the need for ways toremove carbon from corporate operations.76 But that cantake time.

Carbon offsets and credits can bridge the gap. According to theoffsetting toolkit that allows people to make sustainability pledges

Green Business Bureau, a carbon offset represents a company’s

and then retire carbon on chain using RT (retirement token). It

successful effort to reduce or remove carbon dioxide or otherhas It has an offset retirement aggregator.”80 Another participant

greenhouse gas (GHG) emissions from one area of operations

suggested looking at “the whole trust infrastructure and how weto offset its emissions elsewhere, whereas a carbon credit is awant to decentralize it.” Other ideas included an “API for micro

tradable instrument representing its holder’s “right to emit a set

carbon credit” and a “carbon reserve cryptocurrency, a token

amount of carbon dioxide or the equivalent amount of a different

backed one to one, one carbon credit for every claim token.”

GHG.”77 One person in the roundtable suggested supporting“avoidance markets. Corporate work has been to avoid emissions,carbon removals. They have yet to play a significant role, but wedefinitely need to support them.”

Another key challenge is the “equivalent of the last mile gap
where accounting for solutions (like reforestation) is as messy
as functional ecosystems.” A roundtable participant described

Implementation challenges

it as “a DeFi challenge related to total value locked. Many times,

Unfortunately, measuring and tracking GHG emissions is

it’s legal: there’s a gap in legal structure for people to reach fromtricky. Said one roundtable participant, “We’re very skepticalthe digital into the physical. Does the legal structure enforce

about the trustworthiness of offsets as a part of the solution.”agreements, if parties don’t honor them?” This person had

Another agreed: “I don’t think that they are ready yet as aconsiderable experience grappling with this gap: “We’ve built on

trustworthy instrument to verify that carbon implications havethe shoulders of giants of carbon registered juries who are alreadybeen accounted for.” For example, one report pointed to thethe physical arm in the world, verifying all the information, andchallenges of distinguishing high- and low-quality projects suchthen feeding that information into the blockchain by purchasing

as the “permanent carbon removal achieved through high-risk

it for us.” In addition, there are verification bodies that conduct

investment in direct air capture and a less consequential scheme

validation of projects. The attestation of the mitigation lays out

which prevents tree-felling in a remote rural location in Malawi.”78

the number of credits that a party can and can’t register. To bridge

Other participants chimed in: “It’s really difficult to create

the last-mile gap, the person suggested either finding a physicalcarbon credits that genuinely avoid or remove carbon from theentity to engage with legal authorities, or identifying regulations or

atmosphere. We’ve hired many scientists to think about all theagreements that work between parties.

different verticals, in which we might do accounting of carbon
emissions and then vet what exists on the market.”

WEB3 AND SUSTAINABILITY

Last mile gap

In a recent report, the World Bank explored the use of multiple
technologies to capture data close to the source in a digital

The roundtable conversation turned to using “blockchain

monitoring, reporting, and verification (D-MRV) system for

to improve the structure of the carbon market, which iscarbon markets. In a waste-to-energy pilot in Chile, the project

overcomplicated, inconsistent, and counterintuitive, where

team secured sensor data on a blockchain; and in a woodnewest credits are most valuable, because there are no new

tracking protocol pilot, the team in Peru ran satellite and drone

environmental benefits when they change hands.” A criticism wasdata through AI algorithms to detect and record changes to thethe opacity of pricing, where offsets are sold twice and therefore

forest.81 Since they secured the data on a blockchain on site, nocounted twice.79 Someone pointed to “Klima Infinity, a carbon

one elsewhere could tamper with it, and third-parties elsewhere23

could access it and verify that it hadn’t been altered. The reportcongestion and the need for public parking, to open up green

concluded that distributed ledger technology and immutableurban spaces. The data could help policymakers and engineers

cloud storage can help carbon markets to “transition to one-time

to optimize the mix of parks, parking, and public transit.84 Finally,certification of D-MRV systems with recurring remote verificationso-called trust fabrics like Alvarium, “a virtual overlay that aids in82

of project data.” The World Bank has mapped out where thisthe delivery of data from devices to applications with measurable

D-MRV field work fits in its “End-to-End Digital Ecosystem fortrust characteristics,” might eventually help to bridge the gap with

Carbon Market,” featuring tokenization, a registry of digital carbon

greater confidence.85

assets, exchanges, and a Chia blockchain-based data warehousewith a services layer.83

Overall, the roundtable was positive about the potential forblockchain innovation here: “In the carbon market, we’re creating a

IoT devices with telemetry and other data feeds captured bymore transparent system, one that has easier access, and one thatsmart contracts or Layer 2 solutions could automate remoteallows information to demand side participants and to suppliers,

data collection on carbon projects. One researcher suggested

whether they’re carbon project developers or others. … It’s athat a blockchain-based IoT network could help reduce traffic

paradigm shift in how the market can develop in the future.”Social and political
Enough time has passed since the launch of the Bitcoin and

They analyzed proposals to address these issues (such as EIP-

Ethereum blockchains that we have data to challenge prior claims

1559) but found “that it still causes high transaction fees for small

and guide policy.

players because it is a matter of scale rather than mechanism

For example, when it comes to banking the unbanked, Dr. Will
Cong at Cornell University and colleagues analyzed data from the
Ethereum network to determine the extent to which Ethereum
was financially inclusive under the PoW consensus mechanism.86
They found a concentration of asset ownership and mining
operations. Instead of transacting peer to peer on Ethereum,
individuals were using dapps and DeFi protocols; larger players
were using the network itself. The researchers concluded that,design.” On the plus side, “the burning of base fees has a perhaps
unanticipated benefit of transferring wealth from large players
to small and new agents, which facilitates financial inclusion.”
Cong and colleagues also showed how “airdrops as redistributive
policies can improve financial inclusion.”88 All that to say, we havemore data to study the market dynamics of each blockchain,
to inform the types of real-world projects we might want toundertake.

“under the current gas fee mechanisms, high transaction-fee rates

On energy policy, some countries such as Kosovo and Iran havefor small players, significant congestion-induced fluctuation of

banned Bitcoin mining because of the strain it puts on local

gas prices, and large return volatility of tokens hinder financial

energy grids.89 But grids can vary widely across a country indemocratization and inclusion.”87

terms of age of the technology, composition of power generated,configuration of transmission, dynamics of distribution and load,
and the environment of consumption. To inform policymakers,

WEB3 AND SUSTAINABILITY

24

an engineering team at Cornell conducted a nation-wide study

engage in honest practices with minimum supervision is to makeof the feasibility, profitability, and environmental damage ofit the more profitable option, either by decreasing the costs of90

Bitcoin mining in the United States. It found that states likerecycling or increasing the penalties for fraudulent practices.”94

Washington and Vermont—with lower electricity prices andThat means “targeted subsidies, higher penalties for fraud,

greater penetration of renewables in their grids—could minimize

and manufacturers ensuring their electronics are more easily

the carbon footprint of data centers used for mining operations.

recyclable.” 95

In those two states, crypto mining happened to be the mostprofitable as well, in contrast with Kentucky and West Virginia,
where crypto mining was the least profitable and most harmful.91
The researchers concluded that, if public policies offered“incentives for direct carbon capture from the air and eco-friendly
mining, then cryptocurrency becomes more sustainable.”92

The value of diversity and inclusion
Let’s circle back to sustainability as a concept, how members of theroundtable applied it to both physical and digital resources. They
did the same with another important concept—climate justice.
One person summed it up for the roundtable: “All participants

Regarding e-waste, “policymakers should support circular-

don’t share the work or bear the costs equally. Nor do they shareeconomy initiatives … as well as more demonstrations and proofs

the benefits and the harms equally.” A case in point is the shippingof concept for promising innovations in the field.” One studyof 3.3 Mt of e-waste “from high-income to middle-and low-income

found that “the primary way to ensure an e-waste recycler willcountries, further trickling down regionally toward the poorest

93

FIGURE 6

WHAT IS THE BEST WAY BLOCKCHAIN CAN CONTRIBUTE TO CLIMATE JUSTICE?
Roundtable poll results (N=24)

By facilitating global ﬁnancial
inclusion through decentralization

32%

By incentivizing better
relationships with land stewards

28%

By increasing demand forrenewable energy sources
Not sure whether blockchain
relates to climate justiceWEB3 AND SUSTAINABILITY

24%

16%

25

within the region.”96 FIGURE 6 summarizes the roundtable’s view ofare permanently damaged, uninhabitable? When funding

blockchain’s role in contributing to climate justice.

conservation projects such as reforestation to capture carbon

Highly relevant and applicable to digital worlds and their impact
on the planet are three principles of climate justice that projectplanners need to keep in mind:97• Distributive justice, which refers to “the allocation of burdens
and benefits among individuals, nations, and generations,”
so that acting on our opportunities today doesn’t activate
someone else’s crisis tomorrow, long after we have extracted
value and moved on.

governments we plan to fund but also the indigenous residentsof the targeted lands?100“Some of these blockchain companies can’t legally do anything
about it, but not talking about it makes the problem muchworse for those people, especially women. We should be able tocommunicate and find the solution,” and not punish the people
for how their governments have behaved, said one roundtableparticipant. That’s the promise of Web3.

• Procedural justice, which refers to the people in a community
who get to “decide and participate in decision-making,” sothat strategy development and implementation go handin hand—no closed-door dealmaking, no handing down of
resolutions, no brushing off of concerns.
• Recognition of diverse cultures and perspectives, whereparties engage with each other equally, robustly, and withrespect and fair consideration—all of which help drive
innovation, improve the viability of innovative ideas, andincrease the self-agency of those so engaged.98

Roundtable participants also brought in the concept of regenerative
finance (ReFi), a practical application of regenerative economics,
where we account for negative externalities of economic activity
to the transaction level and compensate those individuals orcommunities affected. ReFi trading platforms give investors
a means of participating in sustainable-energy initiatives inexchange for renewable-energy certificates, which are “marketbased instruments that represent the property rights to theenvironmental, social, and other non-power attributes ofrenewable electricity generation.”101 For example, the Sustainable

In practice, these principles of inclusion, diversity, and engagement
generate options that are customized for communities, yet
contribute to regional efforts. “Climate justice lies at the heartof our efforts,” said another roundtable participant.99 “The tools
for climate justice are just as much social, cultural, and politicalas they are technological. It requires us to think in multiple scales

Bitcoin Protocol is a decentralized autonomous organization (DAO)
seeking to persuade Bitcoin miners to mine Bitcoins using clean
energy by rewarding them with “sustainable Bitcoin certificates,”
which are meant to represent “transferable assets that represent
sustainably mined Bitcoin.” 102

simultaneously—the scale of the globe, the smaller firm like the

The human infrastructure needed

start-up, the large corporation, the state, the planet itself, as well

Finally, participants wove in a fourth important concept, humanas the code, the technology, the community, the infrastructure,and so on.”infrastructure as a mechanism for change and implementation:“Solutions require human infrastructure to work.” That’s no

It prompts such questions as, what is the impact of mining
for battery materials on the communities whose lands

WEB3 AND SUSTAINABILITY

and create carbon offsets, have we engaged not just the26

small statement, when we consider its meaning in physical anddigital dimensions. The World Bank has characterized humaninfrastructure as the set of public policies for financing anddelivering “health, education, and nutrition,” where the state

controlling their assets,” said one participant, pointing out

ensures “the efficient, equitable allocation of resources … in key

the incentives that align contributors’ efforts in a network.

subsectors that have high economic returns and that help theIt responds to the United Nations’ call for organizing the work

poor the most.” 103of society in new ways.107

Those investments are table stakes for participating in the

The KlimaDAO as a decentralized autonomous organization

human infrastructure of cyberspace, which expert Fran Berman

is a case in point. It describes itself as a “collective of

called “a synergistic collaboration of hundreds of researchers,

environmentalists, developers, and entrepreneurs who aim toprogrammers, software developers, tool builders, and others

pool their knowledge and expertise to drive change in the carbon

who understand the difficulties of developing applications andmarkets, today.” The DAO’s native asset KLIMA is an ERC-20 token

software for a complex, distributed, and dynamic environment.”104

backed by “at least one tonne of tokenized verified carbon offsets”

In these environments, people work across a network thatin the DAO treasury.108 Those who complete projects and collect“integrates and coordinates resources using standard, open,

offsets can tokenize them on Klima via something called thegeneral-purpose protocols and interfaces to deliver nontrivial

Toucan protocol carbon bridge. If participants drive up the pricequalities of service,” rather than within a corporation that centrallyof carbon assets, then they make carbon-removal projects more105

financially attractive to companies.109 That serves to motivate andcontrols resources using proprietary tools.

The technology supports the kind of approach and behavior that
we need to solve complex problems. For example, one participant

coordinate climate action in a decentralized manner rather than acentralized one.

pointed out the challenges of silos: “Conversations are very siloed,

That’s a distinguishing feature of Web3 human infrastructure—it

like people trained in scrap metals are trying to use blockchain

comes with incentive tooling.110 It’s also a profound observation:

to chart where this material was brought from and where it’ssetting up workflows and motivating people via a network model

discarded.” The person suggested having “a holistic discussion

is different from that of the traditional corporate structure. To aof the different kinds of engineering required and the different

greater extent, market forces and behavioral economics are inkinds of intelligence and education they need.” In hindsight, theplay. A roundtable participant summed it up nicely: “If we’re notbenefits of industry consortia around blockchains were less about

taking an interdisciplinary approach to sustainability, then ouridentifying blockchain solutions and more about understanding

solution is always going to be shortsighted. And if it doesn’t involve

the problems everyone else was trying to solve in the organization

policy, then even our best efforts are going to fall flat.”or supply chain.
Those who thrive in this type of distributed environment “provide

Shovel-ready use cases

the critical human network required to prototype, integrate,

Many of the ideas circulated during the roundtable combined

harden, and nurture ideas from concept to maturity.”

WEB3 AND SUSTAINABILITY

106

They

blockchain and the energy grid itself with a goal of decentralizing

drive the kinds of global initiatives hosted by, for example, thethe generation and management of the latter. Since the

Ethereum Foundation, the Linux Foundation, and the World

roundtable, record-breaking monsoon rains have pummeled

Wide Web Consortium. “Web3, the distributed environment,

Pakistan, and a category five hurricane has swept through thetakes communities and individuals much closer to owning andCaribbean and across Florida.111 Russia persists in its campaign

27

against Ukraine, with energy facilities in the crosshairs. Who

small-scale renewables. Energy Web’s solution helped to qualify

knows whether a hacker is on the verge of exploiting a holeand register energy generating units, manage bids, and settle

in the IT systems security controlling a regional grid or power

payments for small-scale distributed energy resources (DERs).115

generation facility? “Consider the negotiations with Saudi Crown

Customers could register their DERs directly and accredited third

Prince Mohammed bin Salman to boost oil production andparties could verify the details of any registered unit, such ascombat soaring global prices,” veteran journalist Michael Casey

residential batteries. It requires community engagement.

wrote. “That world leaders must cater to the interests of a soleunelected human being to solve an economic crisis that affects
all eight billion of us is the epitome of a centralization problem.”112
Negotiations did not pay off. In early October, the Organizationof the Petroleum Exporting Countries Plus decided to cut oil
production by two million barrels a day.113 Conservation of fossil
fuels, onboarding of more renewables, and distributing grid
resources are imperatives.

for more boring use cases like traceability. That’s what’s interesting
to me, that’s what makes what you all are saying really valuable.
Okay, we can move toward something where we can trace anasset across its life cycle.” A not-so-boring example is UK-based
company Circulor, which has developed a suite of blockchainenabled tools that document the provenance of the mineral andnatural resources used in the automotive and electronics sector.

Leveraging blockchain in a more distributed and localized grid

The Circulor system creates an immutable audit trail for suppliers

could increase grid security and resiliency in three ways. First,

and buyers to track raw materials like cobalt through the supply

without a central point of control, a distributed grid reduces thechain, giving all parties a nearly real-time view of these assets.116

probability of large-scale attack. Second, parties hash and encrypt

Hardware manufacturers can extend it to include recycling anddata before transmitting it. Third, since parties cannot change theputting the recycled materials back into the supply.

data without consensus of all parties, they’d all be able to detectfraud more quickly.114

Patching up aging energy infrastructure in developed economies
and building out new fossil-fuel grids in emerging markets are not

The challenge for governments is finding projects that are readyprudent. Blockchain supports decentralized models, with dropping

for funding. “What’s encouraging now with the ReFi space is thatcosts and technological innovations in renewables. “These

there’s a lot of cross communication from the players who’ve been

advances have driven a steady trend toward decentralization inin the market for decades on how to do this,” said one roundtableelectricity markets, with larger and more diverse participation thanparticipant. “We’re setting up working groups on how we can put

ever before,” according to the nonprofit Energy Web Foundation.

blockchain technology to work in a very positive way. It’s a reallyConsumers are better equipped than ever “to produce, store, andunique application of blockchain technology and a real-world

manage electricity on their own terms at prices competitive withuse case.”conventional utility tariffs.”117 The Brooklyn Microgrid is a good

Consider the Energy Web Chain’s implementation of its distributed
operating system with Austrian Power Grid’s “flex hub.” APG
maintains stability of generation and consumption within theAustrian grid. It already integrated horizontally with other
European energy markets but wanted to integrate vertically with

WEB3 AND SUSTAINABILITY

Another roundtable participant confessed, “I’m always advocating

28

example.118 Developed by LO3 Energy, it is a blockchain-based
microgrid in Brooklyn, New York City, where residents used theirown devices to trade photovoltaic-generated energy, directly andsecurely with their neighbors.119

A roundtable participant proposed a model that implants a power

Like the LO3 Energy project, the success of such a model depends

plant’s economic offtaker—that is, the buyer of its energy—

heavily on the social, political, cultural, and infrastructural contexts

in “a project that uses...” part of the energy for the computing

in which developers embed their projects. Indeed, are there

application and puts the rest of the energy into the local economy

core developers and a talent pipeline? Are there signs of growing

so that the community can use it in their energy environment.”

participation? Are there plans for operations over time?

Standards and regulation
The conversation around standards and regulation was lively.

In terms of hardware energy ratings, someone said, “There are“So much is happening in the DeFi space, you know, that people are

thirty publicly traded Bitcoin miners, and no two miners talk about

taking actions and then asking for forgiveness later. Experiments

their energy in the same way; there are no clear frameworks.”

are constantly underway.” But the lack of regulatory clarity around

Everyone was generally in favor of an independent review of

distributed energy networks and other innovative models wasenergy consumption calculations, with independent auditors

hindering serious investment; regulations tend to favor incumbents.

and transparent methodologies. These are multi-stakeholder

States like North Dakota and Wyoming have been passing laws thatchallenges requiring multi-stakeholder problem-solving.

give tax breaks to petrol producers so that they can fuel Bitcoin mining
and data centers instead of flaring gas, and these have benefitted

Build on current momentum

blockchain entrepreneurs willing to work with the big oil companies.

The roundtable discussion revealed the significant progress many

Also, the lack of generally accepted units of measure and principles
for reporting energy consumption leads to obfuscation andmisunderstanding, with apples-to-oranges comparisons that don’t
provide context, such as comparing the Bitcoin network’s energy
consumption to that of an entire country rather than to a traditional
global payment network. Regulators might consider licensing
requirements and mandatory disclosures for mining facilities, sothat they use some percentage of renewables.120

standards for measuring and reporting. The fruits of one suchinitiative is Green Proofs for BTC, “a framework for assessing andcertifying the carbon impact of Bitcoin mining operations” and an
incentive for Bitcoin miners to cut their carbon emissions. The goal
is to provide greater clarity around environmentally responsible
mining and greater transparency to miners’ sustainability claims.
Bitcoin miners themselves share details not just on electricity theyused but also on their location and the renewables they bought.

Participants generally agreed that blockchain industry-createdcalculators didn’t provide full context for the calculations, either
deliberately or out of ignorance, misconstruing energy consumption(e.g., NFTs) to the public. Even the energy-per-transaction calculation
doesn’t tell the whole story (e.g., for nesting multiple assets tomultiple addresses in single transaction); one person suggested
using unspent transaction output as a measure instead.

WEB3 AND SUSTAINABILITYof the participants had made in their collaborations on industry

29

Said one participant, “The Green Proof set is designed to facilitateand support green commodities markets. So, that does include
carbon accounting and the emissions associated with different
types of commodities.” Another participant added that Green
Proofs help to “understand the emissions implications of specificBitcoin mining facilities, so that we can bring more transparency tobuyers, regulators, and the general public about the implicationsof any organization with which they choose to do business.”

The roundtable also discussed the guidance on accounting andCarbon Standard, a full-fledged offset certification program

reporting energy usage in crypto mining to advance the Crypto

managed by Verra.126 Both originated from the Clean Development

Climate Accord.121 In terms of scope, it distinguishes between

Mechanism127 under the Kyoto Protocol.128 These are requirements

direct and indirect emissions from an entity’s primary operations

for creating a project and lay out some core principles every

as well as its supply chain upstream and downstream. It outlines a

project must conform to. … You demonstrate the baseline,

process for determining the amount of mining-related emissions

the project emissions, and lay out the number of credits to be

and presents consequential and attributional (location based andgenerated.”

market based) approaches to emissions accounting. It should
greatly inform the efforts of those groups working on technicaland accounting standards and practices. Participants kept in mind
that incumbents have a vested interest in existing standards. The
goal is to test the standards’ utility and validity in decentralized
contexts and propose alternatives or improvements if necessary.

Roundtable participants also saw a need for and industrywide commitment to, and agreement on, energy targets andreporting standards with data transparency and openness toindependent ratings of mining equipment. Manufacturers could
support recycling programs to recover the casing and aluminum,
potentially as rebates for the purchase of new devices, especiallyin those jurisdictions where most miners are based but regulation

Develop technical standardsof e-waste disposal is poor or poorly enforced.129 Including mining

Participation in standards development and adoption for project

devices in existing public recycling programs could help.

design, implementation, reporting, and verifications throughout
is critical. One participant gave this example: “Due to the lack ofgood practices in carbon offsetting, we established a technicalcommittee under a standardization party that is a member ofISO (International Organization for Standardization), and set out
a standardized and normalized approach to creating a corporate
project and doing the offsetting.”122

To address trust and consistency issues, innovators needagreed-upon standards for carbon accounting of blockchain
technology—methodologies not just for proof-of-work and proofof-stake type networks for calculating emissions and showing
provenance of carbon credits.

Likewise, the blockchain and distributed ledgers committee of
the IEEE Standards Association is working on a standard forusing blockchain in carbon trading applications that “specifies
the technical framework, application processes, and technicalrequirements for carbon trading applications based onblockchain … and carbon consumption voucher coding”123; anda standard for using blockchain in low carbon zones evaluation,
which includes “an evaluation model and evaluation index system”
and “defines the technical requirements and management
requirements.”124

A participant located in one of the jurisdictions preferred by
Bitcoin miners said, “Here, we are 100 percent renewable energy
production. So, all mining here is renewable. How can a mineror entity doing the proof-of-work demonstrate use of renewableenergy—perhaps through renewable energy certificate or
corporate credit?” This person suggested tapping stranded energy
assets or finding stranded energy to utilize for proof-of-work.
The IEEE blockchain and distributed ledgers committee is also
working on a standard for blockchain-based green power

Another participant described the work of the “Global SteeringGroup for Impact Investment (GSG) program125 and the Verified
WEB3 AND SUSTAINABILITY

Develop accounting standards

30

identification application. The committee noted that the threemajor green power identifying systems in use today—EKOenergy,

Green-e, and International Renewable Energy Certificate—support

The person explained the impact on the bottom line: “As US

green power certificate issuance, trading, and traceability but

ownership of digital assets become more institutional, the ESG

not “internationally accepted and socially common green power

concerns are tantamount. So, the very companies that want to

consumption identifications, to further promote trade facilitation

own the asset are investing in the mining business and creating

130

WEB3 AND SUSTAINABILITY

and to promote global green and low-carbon transformation.”

products by copying the renewable energy industry. If I can prove

The IEEE standard for using blockchain to evaluate low carbon

my ESG footprint and carbon footprint of my operations, then I

zones also covers “carbon accounting data sources, data storage,

can convert a variable revenue stream to a fixed revenue stream.

data interaction, data accounting, emission factor database

That will increase the number of institutional holdings, and all that

establishment, carbon accounting method selection andcapital goes into this new renewable computing infrastructure

prediction.”131 The hope is that these will help in establishingto generate the asset. It’s a virtuous cycle.” It’s also a powerfuland verifying the baselines used to gauge future emissions

incentive for national and international accounting bodies toreductions.132

coordinate and develop these standards together on a fast track.

31

Conclusion“Today, we have a much clearer line of sight to the era of distributed“Self-sovereign identity, machines, batteries, electricuser-controlled environments, thanks to blockchain,” said one ofvehicles, solar panels, and so forth will all factor into thethe participants. “Before we can realize full potential of Web3 andenergy sector in a more meaningful way in coming years,”

broader uses of blockchain beyond finance, we must optimize

said one person. Another recommended discussing

technology and architecture for new environments and solve forblockchain capabilities such as traceability as an element

sustainability.” Others agreed. The roundtable came up with threeof every government infrastructure project.

areas of action.
1.

Governance of ecosystems. This starts with engaging
in standards development and working toward industry
buy-in and commitment. “It’s about aligning incentivesof different stakeholders within a particular blockchaincommunity toward a goal, which may or may not alignwith their interests,” one person stressed. Many people
wanted to get ahead of regulation and develop andvoluntarily adopt industry guidance and independent
ratings rather than wait for government mandates andcompliance.

2.

Cultivation of knowledge. This starts with identifying
engagement, policy development, and standards
development. One person suggested “focusing on
the traceability benefits of blockchain to support
markets for emerging green commodities, more robust
voluntary, carbon offset markets, sustainable aviation,
fuel, biofuel, all the replacement fuels and the green
commodities that we’re going to see more and more ofas we try to keep on this 1.5° C trajectory.”
Greater advocacy for infrastructure innovation. Thisrequires a balanced approach. Developing economies
have the potential to benefit from Bitcoin blockchain
infrastructure, and so projects and initiatives should
help them to go green and stay green. Aging economies
need an energy infrastructure refresh; blockchain canbe part of the solution.

WEB3 AND SUSTAINABILITY

storage hardware, and telecommunications infrastructure—
the available electricity, the available computing power, theavailable connectivity, the available storage, how computing
power is linked to less cycle expenditure for certain processes,
and so on.” We’re talking about nothing less than a different
design of foundational technologies. Everyone in the blockchain
space—users, developers, investors, miners, researchers,
educators, policymakers, and regulators—has a role to play inminimizing the technology’s climate impact and maximizing its
use in sustainability initiatives. Together, we can make meaningful

initiatives such as regenerative finance that will inform

3.

The future “requires an upgrade of the energy, computing and32

progress.

Acknowledgments
The author expresses her gratitude for the generous feedback from Tamara Kneese, Zane Cooper, Melissa Gregg, Tristin Oldani, Hilary
Carter, Anna Hermansen, and Amy Blitz on various drafts of the report.

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About the author
Kirsten D. Sandberg is an editorial board member of the Journalof Business Models and an adjunct faculty member of the graduate
publishing program at Pace University, where she serves on theadvisory board and teaches courses on academic publishingand the legal aspects of publishing. Among her current roles is
editor-in-chief of the Blockchain Research Institute, where she is
responsible for the editorial direction and production of briefs,
cases, papers, reports, and books. For over a decade, she was an
executive editor specializing in strategy and technology at Harvard
Business Review Publishing.

WEB3 AND SUSTAINABILITY

35

Endnotes
1

Under Chatham House Rule, participants may freely use

5

the information they receive but not reveal the identity or
the affiliation of any speaker or other participant. “Chatham
House Rule,” Chatham House, Royal Institute of International

digitallibrary.un.org/record/139811?ln=en.
6

activeaddress; Bitcoin Contributors, GitHub, GitHub Inc.,

chatham-house-rule#.

24 Sept. 2022. https://github.com/Bitcoin/Bitcoin/graphs/

Pörtner, Hans-O., et al., “Technical Summary,” Hans-O.
Pörtner et al., eds., in: Climate Change 2022: Impacts,
Adaptation and Vulnerability. Contribution of Working Group

contributors.
7

www.morningstar.com/articles/1062037/the-case-for-and-Panel on Climate Change (Cambridge and New York:against-Bitcoin-as-digital-gold.

Cambridge UP, 2022): 37–118. https://www.ipcc.ch/report/ar6/wg2/downloads/report/IPCC_AR6_WGII_TechnicalSummary.pdf.

8gemini.com/cryptopedia/ethereum-vs-Bitcoin-blockchain-

The words of Dr. Tedros Adhanom Ghebreyesus, Director-

differences; Ross, Logan, “Ethereum vs. Bitcoin,” Benzinga,
14 June 2022. https://www.benzinga.com/money/Bitcoin-vs-

Polluted Air, but More Countries Are Taking Action,” News

ethereum.

Release, World Health Organization, 2 May 2018. https://www.who.int/news/item/02-05-2018-9-out-of-10-peopleworldwide-breathe-polluted-air-but-more-countries-aretaking-action. See also Amelia Fortgang, “Countries andTerritories Most Affected by Climate Change Also More
Likely to Believe it to Be Personally Harmful,” Climate
Change Communication, Yale University, 30 July 2021. https://climatecommunication.yale.edu/news-events/countriesand-territories-most-affected-by-climate-change-also-morelikely-to-believe-it-to-be-personally-harmful/.
“A Call for Action,” Our Common Future, A Report by theWorld Commission on Environment and Development,
Official Records of the General Assembly, Forty-second
Session. Supplement No. 25 (A/42/251): 1987, p. 54. https://digitallibrary.un.org/record/139811?ln=en.

WEB3 AND SUSTAINABILITY“How Are Bitcoin and Ethereum Different?” Cryptopedia,
Gemini Trust Company LLC, 10 Sept. 2021. https://www.

General of WHO. “Nine out of 10 People Worldwide Breathe

4

Arnott, Amy C. “The Case for (and Against) Bitcoin as Digital
Gold,” Morningstar, Morningstar Inc., 18 Oct. 2021. https://

II to the Sixth Assessment Report of the Intergovernmental

3“Active Addresses,” ViaWallet Explorer, ViaBTC, 24 Sept.
2022. https://explorer.viawallet.com/btc/statistics/address/

Affairs, n.d. https://www.chathamhouse.org/about-us/

2“A Call for Action,” Our Common Future, p. 24. https://

36

9“The Merge: Implications on the Electricity Consumption andCarbon Footprint of the Ethereum Network,” Crypto Carbon
Ratings Institute, CCRI GmbH, 7 Sept. 2022. https://4795067.
fs1.hubspotusercontent-na1.net/hubfs/4795067/CCRI-ETHReport-2022.pdf; and Goode, Lauren and Gideon Lichfield,“What’s Next for Ethereum After the Merge,” WIRED, CondéNast, 26 Sept. 2022. https://www.wired.com/story/whatsnext-for-ethereum-after-the-merge/.

10 “Active Addresses,” Etherscan, 24 Sept. 2022. https://etherscan.io/chart/active-address, and EthereumContributors, GitHub, GitHub Inc., 24 Sept. 2022. https://github.com/ethereum/ethereum-org-website/graphs/
contributors.

11 Patrizio, Andy, “Web3 vs. Metaverse: What’s the Difference?”

Consumption of Cryptocurrencies Beyond Bitcoin,” Joule 4,

TechTarget, 4 Aug. 2022. https://www.techtarget.com/whatis/

No. 9 (16 Sept. 2020): 1843–1846. https://doi.org/10.1016/j.

feature/Web3-vs-metaverse-Whats-the-difference.

joule.2020.07.013. It includes a method by Harald Vranken,

12 The survey was commissioned by StarkWare and conducted by
OnePoll in March 2022. StarkWare Industries, “Fifty-three Percentof Americans Think Crypto Will Be ‘the Future of Finance,’ PollFinds,” Press Release, PR Newswire, Cision US Inc., 29 March 2022.

“Sustainability of Bitcoin and Blockchains,” Current Opinion in
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sciencedirect.com/science/article/abs/pii/S1877343517300015.
18 Cambridge Centre for Alternative Finance. https://ccaf.io/cbeci/

https://www.prnewswire.com/news-releases/53-of-americans-index, as of 19 Sept. 2022. This figure does not account for miner

think-crypto-will-be-the-future-of-finance-poll-finds-301512828.

decisions and behavior.

html.

19 “How Does It Work?” Bitcoin Energy Consumption Index,

13 “Proof-of-work,” CoinMarketCap, CoinMarketCap OpCo LLC, as of
19 Sept. 2022. https://coinmarketcap.com/view/pow/.

Digiconomist.net, as of 21 Oct. 2022. https://digiconomist.net/wpcontent/uploads/2018/03/info-Bitcoin-energy-consumption-v2.

14 Oliveira, Samuel, Filipe Soares, Guilherme Flach, Marcelo Johann,
and Ricardo Reis, “Building a Bitcoin Miner on an FPGA,” XXVII SIM,png.
20 Bitcoin Energy Consumption Index, Digiconomist.net, as of 21 Oct.

South Symposium on Microelectronics, 2012. https://www.inf.

2022. https://digiconomist.net/Bitcoin-energy-consumption; andufrgs.br/sim-emicro/papers2012/sim2012_submission_46.pdf.

de Vries, Alex, Ulrich Gallersdörfer, Lena Klaaßen, and Christian

15 Mayersen, Isaiah, “Intel starts Shipping Its Bitcoin Mining Rig as
Cryptocurrencies Crash,” TechSpot, TechSpot Inc., 2 July 2022.
https://www.techspot.com/news/95165-intel-starts-shipping-

Stoll, “Revisiting Bitcoin’s Carbon Footprint,” Joule 6, no. 3 (16March 2022): 498–502. https://doi.org/10.1016/j.joule.2022.02.005.
21 Koomey, Jonathan, “Estimating Bitcoin Electricity Use: A Beginner’s

Bitcoin-mining-rig-cryptocurrencies-crash.html; and “10 Best ASIC

Guide,” Coin Center, May 2019. https://www.coincenter.org/

Miners for Mining Cryptocurrency in 2022,” Software Testing Help,

estimating-Bitcoin-electricity-use-a-beginners-guide/#summary-

updated 24 Sept. 2022. https://www.softwaretestinghelp.com/

of-independent-estimates.

best-asic-miners/.

22 “About ENERGY STAR,” EnergyStar, Environmental Protection

16 Aoyon Ashraf, “Bear Market Could See Some Crypto Miners

Agency and US Department of Energy, as of 18 Oct 2022. https://

Turning to M&A for Survival,” CoinDesk, Digital Currency Group,

www.energystar.gov/about; LG Electronics, Samsung, and Xerox

1 June 2022. https://www.coindesk.com/business/2022/06/01/

were among ENERGY STAR’s 2022 award-winning partners inbear-market-could-see-some-crypto-miners-turning-to-ma-for-the product manufacturing category. “2022 Energy Star Awardsurvival/.

Winners,” EnergyStar, EPA and US Dept. of Energy, 5 May 2022.

17 Cambridge Centre for Alternative Finance, Methodology, n.d.
https://ccaf.io/cbeci/index/methodology. For a good comparisonof these and other methods with supplemental data, seeaward_winners.
23 “Corporate Average Fuel Economy,” National Highway Traffic

Ulrich Gallersdörfer, Lena Klaaßen, and Christian Stoll, “Energy

WEB3 AND SUSTAINABILITY

https://www.energystar.gov/about/awards/2022_energy_star_

37

Safety Administration, US Dept. of Transportation, updated

19 Sept. 2022. https://www.nhtsa.gov/laws-regulations/

automated teller machines worldwide (47 tWh), but that

corporate-average-fuel-economy; and “Air Pollutionenergy does not contribute to security: according to theControls,” eCode of Federal Regulations, National Archives,

US Federal Bureau of Investigation, ATM robberies—where

updated 19 Oct. 2022. https://www.ecfr.gov/current/title-40/

thieves use crowbars to break open the machines—are at

chapter-I/subchapter-U, accessed 22 Sept. 2022.

an eight-year high; and the US-based ATM security services

24 Carlson, Jill, “Cryptocurrency and Capital Controls,” Social
Science Research Network, 2 June 2016, p. 31. https://ssrn.
com/abstract=3046954. Governments with currencies ofmore stable value could reduce the carbon footprint of theirbank notes and coins through central bank digital currencies
not using proof-of-work. See Itai Agur, et al., Digital

globally in 2022, with $81,000 the average amount stolen.
Sams, Jim, “ATM Theft Numbers Continue to Climb After
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national/2022/08/09/312021.htm.

Currencies and Energy Consumption 2022, No. 6 (7 June 2022).

27 Maciej Cepnik, et al., “A New Look at the Bitcoin Blockchain:

International Monetary Fund, https://www.elibrary.imf.org/

How Innovation in Bitcoin’s Technology Stack Is Creating

view/journals/063/2022/006/article-A001-en.xml#A001fn07;

New Enterprise Use Cases,” Blockchain Research Institute,and Chaum, David, Christian Grothoff, and Thomas Moser,

31 July 2020. https://www.blockchainresearchinstitute.org/“How to Issue a Central Bank Digital Currency,” Swiss

project/a-new-look-at-Bitcoin/.

National Bank Working Paper 3/2021. https://arxiv.org/
abs/2103.00254.

28 Vitalik Buterin, “A Proof of Stake Design Philosophy,” Medium,
30 Dec. 2016. https://medium.com/@VitalikButerin/a-proof-

25 McCook, Hass, “An Order-of-Magnitude Estimate of theRelative Sustainability of the Bitcoin Network,” 2nd ed.,Bitcoin.fr, 15 July 2014. https://Bitcoin.fr/public/divers/docs/
Estimation_de_la_durabilite_et_du_cout_du_reseau_Bitcoin.
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GitHub, Galaxy Digital LLC, 13 May 2021. https://github.com/
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of-stake-design-philosophy-506585978d51.
29 “Proof of History,” Cryptopedia, Gemini Trust Company LLC,
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30 Ethereum Improvement Proposal 1057. https://github.com/
ethereum/EIPs/pull/1057; https://github.com/ethereum/
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26 Khazzaka, Michel, “Bitcoin: Cryptopayments Energy
Efficiency,” Social Science Research Network, rev. 28 Sept2022. https://papers.ssrn.com/sol3/papers.cfm?abstract_
id=4125499. Valuechain also calculated the energy used by

WEB3 AND SUSTAINABILITY

provider 3SI reported a 165 percent jump in ATM thefts

38

Cointelegraph, 6 March 2020. https://cointelegraph.com/
news/progpow-is-dead-long-live-progpow-ethereumdeveloper-call-summary.

31 Fitzi, Matthias, et al., “Ofelimos: Combinatorial Optimization

38 Zhang, Nick, “Moore’s Law Is Dead, Long Live Moore’s Law!”

via Proof-of-Useful-Work,” International Association for

arXiv, Cornell Univ., 27 May 2022. https://arxiv.org/ftp/arxiv/

Cryptologic Research, 14 Oct 2021. https://eprint.iacr.

papers/2205/2205.15011.pdf. For a couple of chip advances,org/2021/1379.pdf

see Joseph R. Vella, David Humbird, and David B. Graves,

32 Hryniuk, Olga, “Introducing Ofelimos: a Proof-of-UsefulWork Consensus Protocol,” IOG Blog, IOG Singapore Pte. Ltd.,
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33 Hoffman, Felix, “Challenges of Proof-of-Useful-Work,” arXiv,
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34 Liu, Chuncheng, “Who Supports Expanding Surveillance?
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35 Jardine, Eric, “Mid-year Crypto Crime Update: Illicit Activity
Falls with Rest of Market, with Some Notable Exceptions,”
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39 de Vries, Alex and Christian Stoll, “Bitcoin’s Growing
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40 Saylor, Michael, Nic Carter, Darin Feinstein, et al., Letter tothe Honorable Michael S. Regan, US Environmental Protection
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36 Jardine, Eric, “Mid-year Crypto Crime Update: Illicit Activity

Bitcoin_Letter_to_the_Environmental_Protection_Agency.

Falls with Rest of Market, with Some Notable Exceptions,”

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blog.chainalysis.com/reports/crypto-crime-midyear-

Nov. 2021. https://docsend.com/view/nk6szu7i8e6tv45m.

update-2022/.

41 Some crypto opponents argue that mining device

37 Koomey, Jonathan, Stephen Berard, Marla Sanchez,

manufacturers have exacerbated chip shortages in otherand Henry Wong, “Implications of Historical Trends insectors like automotive. Chandrima Sanyal, “Why Is There athe Electrical Efficiency of Computing,” in IEEE Annals ofChip Shortage? The Semiconductor Supply Chain, Explained,”the History of Computing 33, no. 3 (March 2011): 46–54.

Nasdaq, Nasdaq Inc., 13 Oct. 2022. https://www.nasdaq.com/

DOI: 10.1109/MAHC.2010.28.

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Is Now the Time to Buy Mining Rigs?” Nasdaq, Nasdaq Inc.,

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39

21 June 2022. https://www.nasdaq.com/articles/as-Bitcoinprice-falls-is-now-the-time-to-buy-mining-rigs.

46 Circular Drive Initiative, n.d. https://circulardrives.org/.
47 Cohen, Bram and Krzysztof Pietrzak, “Chia Network

42 Bambyshe, Nina, “Ethereum Miners Eye Cloud, AI to
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Blockchain,” White Paper, Chia.net, 9 July 2019. https://www.
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48 IEEE 2883-2022, “Standard for Sanitizing Storage,” 2022.
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43 Saylor, Michael, Nic Carter, Darin Feinstein, et al., Letter tothe Honorable Michael S. Regan, US Environmental Protection
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45 “Blockchain Certifies the Sustainability of Electronic
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49 Khan, A. U. R., and R. W. Ahmad, “A Blockchain-Based IoTEnabled E-Waste Tracking and Tracing System for Smart
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50 “Modeling a Circular Economy for Electronic Waste,”
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51 “Frequently Asked Questions,” Cambridge Bitcoin Electricity
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52 Blandin, Apolline, Gina Pieters, Yue Wu, Thomas Eisermann,
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53 BMC collected data on the electricity mix from over half
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40

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54 “Overview,” HIVE Blockchain, n.d. https://www.
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60 “Boden Plug and Play is at the Forefront of Climate-Smart

55 Springer, Patrick, “Bitzero Data Centers Planned in
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61 Benson, Sally M. and Jacques A. de Chalendar, “Why 100%

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56 Springer, Patrick, “Bitzero Data Centers Planned infulltext/S2542-4351(19)30214-4.

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62 Radovanovic, Ana, Ross Koningstein, Ian Schneider, etCommunications Company, 1 June 2022. https://www.

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63 Radovanovic, Ana, Ross Koningstein, Ian Schneider, et

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64 Sun, Zhiyuan, “This Singapore Tech Company Says Its

58 “MHA Nation Ground-breaking Ceremony for NG2 Green

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74 Thomas Franck, “One in Five Adults Has Invested in, Traded

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68 McFarland, John, “Mining Bitcoin a Solution to Gas Flaring?”
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69 “Sato,” WiseMining, WisElement SA, 2021. https://www.
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70 “Cleantech Bitcoin Mining Company MintGreen Partners,”
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71 “District Energy: A Secret Weapon for Climate Action and
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77 Courtnell, Jane, “Carbon Offsets vs Carbon Credits:
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73 “District Energy Systems,” Combined Heat and Power

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78 Singh, Ariana Kiran, Olamide Oguntoye, and Lauren Packard.
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42

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86 Cong, Lin and Tang, Ke and Wang, Yanxin and Zhao, Xi,“Cleaning Up Crypto’s Emissions: Why Policy Shouldn’t Be

43

93 Singh, Ariana Kiran, Olamide Oguntoye, and Lauren Packard,

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97 Descriptions of these three principles are adapted from
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99 See, for example, Josh Gabbatiss and Ayesha Tandon, “In-44104 Berman, Fran, “The Human Side of Cyberinfrastructure,”

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45

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127 “Clean Development Mechanism (CDM),” UN Framework
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120 Singh, Ariana Kiran, et al., “Cleaning Up Crypto’s Emissions:
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122 Gasiorowski-Denis, Elizabeth, “Raising New ISO Standards
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WEB3 AND SUSTAINABILITY

125 Global Steering Group for Impact Investment, n.d.

46

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