Elon Musk: Climate hero or bitcoin super-polluter?
The Lord works in mysterious ways and so does Elon Musk. The enigmatic, yet somehow ubiquitous, billionaire is nothing if not contradictory.
I picture a Marvel Comic genesis film in which Young Elon discovers he has superpowers and is constantly torn between two competing impulses; Good Elon wants to save the planet from climate change by, for example, inventing and building the most famous electric vehicle company in the world, pioneering energy generation and storage systems—and, of course, in his spare time, making the world safe from robots; the other one—the Evil Elon—wants to use his genius for self-promotion, his status as a media darling, and his 40.8 million Twitter followers to make himself the richest person in the world.
Sometimes, it seems, the only things that stand between Evil Elon and his goal are the Securities and Exchange Commission, which has a dim view of CEOs who hype and manipulate stock in their own ventures, and pesky investors who hate it and file lawsuits when he tweets thing like “Tesla stock is too high, IMHO.”
What happens when Evil Elon does something that appears to undermine planet-saving Good Elon?
Here’s an example. On Monday, Tesla, certainly one of the most important environmental enterprises in the world, announced it has bought $1.5 billion worth of bitcoin. In its filing with the SEC, the company said it was buying the bitcoin for “more flexibility to further diversify and maximize returns on our cash.” The company also said it will become the first major automaker to start accepting payments in bitcoin in exchange for its products.
This is an avoidable environmental disaster in the making. Bitcoin mining—the practice of millions of users running millions of electricity-guzzling computers around the clock to find hidden algorithms that can be converted into a digital currency called Bitcoin—consumes enormous amounts of energy. Digiconomist’s Bitcoin Energy Consumption Index, which provides the latest estimate of the total energy consumption of the network, says bitcoin mining has a carbon footprint comparable to New Zealand, producing 36.95 megatons of CO2 annually.
The Cambridge Bitcoin Electricity Consumption Index, shows that bitcoin mining consumes 110.53 TWh of power—more than the entire annual energy consumption of the Netherlands. Cambridge researchers say bitcoin accounts for around 0.5% of total global electricity consumption. Something like 70% of bitcoin mining facilities are located in China, which still relies heavily on coal-based power.
A Harvard study from 2019 concluded:
The research results do not suggest that cryptocurrency is “burning down the planet”, but the negative externalities identified in the research should be considered. For example, the results illustrate a scenario where each $1 of cryptocurrency coin value created would be responsible for $0.66 in health and climate damages.
That is too high a price in itself but other sources suggest the costs are much higher. In 2018, a study published in Nature projected that bitcoin usage, “should it follow the rate of adoption of other broadly adopted technologies, could alone produce enough CO2 emissions to push warming above 2 °C within less than three decades.”
It is probably not a coincidence that two days after Tesla’s announcement, economist Nouriel Roubini, known as 'Dr. Doom' for his gloomy views, railed against the environmental impact of bitcoin in an op-ed for the Financial Times:
"Since the fundamental value of bitcoin is zero and would be negative if a proper carbon tax was applied to its massive polluting energy-hogging production, I predict that the current bubble will eventually end in another bust."
So, which Elon will win the day—Good Elon or Evil Elon? Watch your Twitter feed for updates. With Donald Trump sidelined, Musk is the best reality show on the internet.
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