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Ethan Lou’s latest book is Once a Bitcoin Miner: Scandal and Turmoil in the Cryptocurrency Wild West

Author Ethan Lou’s latest book is Once a Bitcoin Miner: Scandal and Turmoil in the Cryptocurrency Wild West.K. Yan/Handout

On Monday, the World Economic Forum lent its support to a rather hare-brained plan by a group including Greenpeace: to change bitcoin’s code to make it, in their view, more environmentally friendly.

The resistance of bitcoin’s peer-to-peer infrastructure to such outside control is not only its entire value proposition, it’s also a premise that has largely held true. People more loved by the bitcoin world than the likes of the WEF have tried to make lesser changes to the code. They have all failed.

That does not mean this environmental conversation is not worth having, of course. The movement to prioritize ESG (environmental, social and governance) factors in investing is so in vogue these days, it even dominates the new season of the finance drama Billions.

It’s just that ESG metrics by themselves are already subjective and inconsistent. This isn’t an issue with a simple answer.

Consider that this environmental criticism of bitcoin and the wider cryptocurrency world is not really because they supposedly use a lot of electricity.

Electric cars also use a lot of electricity, and they are not only considered not harmful to the environment, but even beneficial because they displace petrol-based cars. The real environmental criticism of crypto is what all its electricity is for: no good purpose.

But crypto advocates would respond that the industry’s electricity use pales in comparison to the traditional finance world, and like electric cars, it seeks to displace an industry with a bigger carbon footprint. Or that crypto brings about greater financial freedom, and that its underlying technology can foster a more democratic Internet.

It’s like this new age of private space travel. What exactly are all those carbon emissions for? In a recent episode of the Globe’s Decibel podcast, science writer Ivan Semeniuk said of the proponents: “They just have a feeling that the long game for humanity somehow involves investment in space.”

Maybe you don’t buy any of that. But how one makes that judgment, deeming certain industries to be worthy of their electricity use or carbon footprint and others not – that’s always a personal, subjective take.

Consider why computer gamers have been particularly hostile to crypto. Maybe they are trying to divert attention from their own massive use of electricity for an activity whose purpose is even more subjective.

This is not an argument against gaming. A gamer might say the activity alleviates stress, fosters community and grants personal gratification. Who am I to say that is not an appropriate use of electricity? In that same vein, though, who is anyone to make that same value judgment about crypto?

Of course, one might say that the entire point of ESG is to be subjective – to invest in ways that align with one’s individual values. And maybe you just want to reduce energy consumption, period, of the industries whose purpose and value you don’t personally get – because you want to see a low-carbon future.

Well, maybe crypto can actually help in that respect. Anyone who values a low-carbon future is surely concerned about the environmental impact of the oil industry. And, in the United States, Exxon Mobil Corp. has said it would use crypto mining as a way to reduce its emissions.

Natural gas is a byproduct of oil drilling, and companies often simply burn that gas because, in the middle of nowhere, it’s too costly do much else with it – resulting in carbon emissions. Exxon has found that, by using the otherwise burned gas to mine bitcoin, it’s a self-funding or self-subsidizing way to reduce those emissions by 63 per cent.

The more stringent of the ESG adherents would say, “Piss on all of that!” – why reduce the oil industry’s emission when the whole thing should be shut down completely yesterday?

But the idea of the low-carbon future is a transition, not a switch that can be arbitrarily flicked off. Even the United Nations climate envoy Mark Carney, the de facto ESG patron saint, said as much recently.

Ultimately, that is how investors with a mind on ESG should be looking at the crypto. Like how ESG is in itself complicated, how crypto fits within that framework is not a binary issue.

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