The initiative brings together the crypto and fintech industry to build a sustainable future for global finance with support from the UN's Framework Convention on Climate Change
The Crypto Climate Accord has been launched by a group of non-profit organisations in a bid to make the booming cryptocurrency industry 100% renewable.
Inspired by the Paris Agreement, the initiative brings together the crypto and financial technology (fintech) industry to build a sustainable future for global finance with support from the United Nations Framework Convention on Climate Change (UNFCCC) Climate Champions.
The Accord was founded by Energy Web, Rocky Mountain Institute (RMI) and the Alliance for Innovative Regulation (AIR), with more than 20 companies and individuals spanning the crypto and finance, technology, NGO, and energy and climate sectors already signed up to the scheme.
If successful, the group claims the initiative will create wins for both the planet and the global economy by eliminating emissions from a fast-growing source of electric load, onboarding an entirely new class of customers with significant demand for energy, and helping support the widespread adoption of crypto by making a more sustainable and scalable industry.
“I’m proud to support the Crypto Climate Accord and to collaborate with other like-minded players that believe this technology can lead to a renewable energy revolution through collective action,” said Meltem Demirors, CSO of digital asset investing firm CoinShares.
“It’s vital that we correct misinformation that has persisted about bitcoin’s energy use and sources. Our industry has always been focused on pushing the bleeding edge of innovation and taking action to accelerate change instead of waiting for systemic change, which takes decades and often never materialises.”
Crypto Climate Accord aims to make the cryptocurrency industry transition to 100% renewable energy by 2025
The surging demand for crypto and the accelerating adoption of blockchain-based solutions amongst businesses and individuals have highlighted one critical issue – the impact of the technology’s growing energy consumption on the climate.
As cryptocurrencies become increasingly mainstream, the Accord recognises that it’s imperative to shift towards a renewable energy future now.
It intends to achieve this by working collaboratively with the cryptocurrency industry – including all blockchains – to transition to 100% renewable energy by 2025 or sooner.
“Blockchain systems are about building better, more trustworthy infrastructure for humanity,” said Joe Lubin, founder of blockchain software company ConsenSys. “A critical aspect of this upgrade must involve humanity becoming better stewards of the environment.”
He points out that Ethereum, which is an open-source, blockchain-based, decentralised software platform that is used for its own cryptocurrency, has been focusing on “being increasingly energy-efficient”. “We will incorporate a path to carbon neutrality in the near future via proof-of-stake,” added Lubin.
“This switch will bring orders of magnitude of increased efficiency to the Ethereum ecosystem, helping us meet the goals of the Crypto Climate Accord of which we are proud supporters.”
Crypto Climate Accord to take “big tent” approach to reach its objectives
While many organisations are individually taking steps to decarbonise their operations, the Accord notes that an industry-wide coalition and scalable solutions can quickly multiply the impact.
The founders said they will employ a “big tent” approach and act as a coordinating framework to decarbonise all aspects of the industry – and they have developed three high-level objectives for the Accord, which will be finalised with supporters in advance of the UN’s COP26 Climate Conference in Glasgow, UK, in November 2021.
The steps include enabling all of the world’s blockchains to be powered by 100% renewables by the 2025 UNFCCC COP Conference; developing an open-source accounting standard for measuring emissions from the cryptocurrency industry; and achieving net-zero emissions for the entire crypto industry, including all business operations beyond blockchains and the elimination of historical emissions, by 2040.
Energy Web has a track record of sourcing renewable energy and building tools to decarbonise blockchains. To help launch the Accord, the Switzerland-based non-profit will bring to bear open-source software and its sector experience in a bid to help crypto market participants take near-term action to begin decarbonising the industry.
Meanwhile, US-headquartered AIR will lead the engagement of key policymakers and regulators globally as it believes the renewed focus on sustainability presents a clear opportunity to develop and implement pragmatic and effective energy sector-related policies.
Nigel Topping, the UN’s high-level champion for climate action at COP26, described the Accord as a “unique chance to publicly clean up the past, reject future emissions, and push the boundaries of climate leadership”.
“In addition to urgently eliminating future emissions, this industry is uniquely placed to address its historical emissions debt,” he added. “The very nature of blockchains enables historical system-wide transparency, making crypto’s emissions debt a ripe target for carbon dioxide removal solutions.”