23 June 2022 | With its Great Reset, the World Economic Forum, the lobby of the world’s largest corporations, supposedly wants to save the world from climate collapse. With a contribution on protecting the climate through Bitcoin, the powerful organisation proves- once again – that distrust is called for when it comes to corporate commitments to social goals. Greenwashing is the order of the day.
Scandalously, the World Economic Forum is recognised as an international organisation, like the Red Cross, not least because of the UN’s dependence on corporate money. As such, it does not sit in the ranks as a lobby when the international bodies discuss how to supposedly save the world, but sits at the table.
There are already indications, that the greenwashing of the Forum will influence policy on Bitcoin and Co. Moreover, the Forum also influences the formulation of the UN’s social and environmental goals and the strategies to achieve them. Therefore, it is important to point to examples that show how misguided it is to assume that this organisation has an interest beyond corporate profits.
The recent post on the Forum’s website “Can crypto become a leader in sustainability?” is a prime example of the greenwashing of an environmentally harmful technology in which many IT and financial corporations have a great financial interest.
As this article goes, crypto means everything that uses distributed ledger technology. The focus of the article is the digital currency Bitcoin. Bitcoin is widely criticised as being harmful to the environment, because it is produced (mined) and transactions are verified by means of the decentralised ledgers in a computing competition among miners. Only one wins at a time, but in all participants in the competition waste a lot of energy in trying to win.
The article comes from the Crypto Impact and Sustainability Accelerator (CISA), which the World Economic Forum runs together with the Bitcoin advertising and information platform CoinDesk. CoinDesk’s parent is the Digital Currency Group (DCG), a venture capital firm that invests in the digital currency market.
There is, of course, a vital interest of DCG and the corporations behind the World Economic Forum in ensuring that Bitcoin and other crypto currencies are not seen by the public as environmental messes.
Less harmful = beneficial?
And so, with much reference to the drama of global warming, the author sets about eloquently asserting the potential benefits of crypto in transforming energy production. A lot is promised:
“Planet Earth is facing a climate emergency and urgent action is needed to cut emissions by 2030. Crypto has the potential to help decarbonize unreliable power grids, optimize economic incentives for all, and help countries meet their climate goals.”
But the substance of the examples she presents falls very far short of her intonation. On the one hand, it is about crypto companies undertaking to, or even manage here and there, to reduce the environmental damage they do.
On the other hand, the author praises bitcoin mining for consuming so much energy, and that this energy consumption can be turned off at any time. This, she says, is helping energy producers deal with fluctuations in renewable energy production. That, however, is only a deduction from the environmental damage that is caused. For it is not a big problem to find ways of wasting energy that can be switched on and off. It is certainly even better to turn surplus energy into storable energy, for example in the form of hydrogen. Without such storage of energy, the energy transition will hardly succeed. Bitcoin can contribute nothing to this.
We will leave aside the author’s silly endeavour to portray a company that somehow wants to optimise carbon offset trading as a climate saviour.
Discredit counter-arguments with false allegations
The author of the piece attacks those who criticise the high energy consumption of Bitcoin and Co. with the accusation that they are spreading Fake News. What she herself provides, however, are only false claims and idiosyncratic assessments.
She attacks Congressman Jared Huffman for criticising the contribution of Bitcoin mining to global warming in a letter to the US Environmental Protection Agency, with “false claims” that, for example, a single Bitcoin transaction consumes as much energy as a household in a month and that Bitcoin consumes as much energy per year as Greece. She asserts that she has already cleared up these “unproductive misconceptions” in another post.
But the article she linked, “Why the debate about crypto’s energy consumption is flawed”, is not at all about correcting misstatements. Rather, it simply claims that the freedom-promoting effect of Bitcoin and co. is at least as worth the energy consumption as all the refrigerators of the world, which together consume more electricity than bitcoin.
The article is full of brave claims but is providing almost no data to back them up. The main thesis is that access to a decentralised currency not supervised by the state can provide a form of liberty for the billions of people who do not live under exemplary democratic conditions. At this point, one would like to know how many people actually use bitcoin in this way. One only finds the statement that there are an estimated 300 million crypto users, and “not all” of them live in developed nations.
Why this is important
The author congratulates herself and the industry on the fact that the EU Parliament, in the version of the proposed regulation for the crypto-asset market (MICA) approved in March, left out anything that could amount to a ban on the energy-intensive form of mining used in Bitcoin, called prove of work.
The large IT companies organised in the World Economic Forum have some of the greatest lobbying power in Brussels. Bold but flimsy arguments such as the one presented here are intended for their lobbying work.
The same is true in Washington, where the White House Office of Science and Technology Policy is working on a report with policy recommendations on crpto-mining, which is expected in August.