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A proposed climate tax on crypto mining is gaining momentum

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A tentative proposal to tax cryptocurrency mining to raise funds for climate action took off during a United Nations climate conference that’s set to come to a close today.

A levy on energy-hungry crypto mining, at $0.045 per kilowatt-hour (kWh) of electricity used, could generate $5.2 billion in revenue annually, according to a report released last week by the Global Solidarity Levies Task Force, led by Kenya, Barbados, and France.

The Bitcoin network is estimated to use more electricity annually than a majority of the world’s countries do individually. The idea is that a climate tax could reduce emissions by incentivizing mining firms to clean up their operations. And it could provide desperately needed funding to help less affluent nations transition to renewable energy and adapt to the effects of climate change.

“There are swathes of the economy which are largely under-taxed yet polluting the planet.”

“There are swathes of the economy which are largely under-taxed yet polluting the planet. Yet they have huge potential to close the climate finance gap,” the report says.

The task force formed last year to consider potential levies on heavily polluting industries as a way to fund action on climate change. It was initially expected to focus on fossil fuel companies, aviation, and maritime shipping, as well as a levy on financial transactions. A progress report the group released last week broadens that scope to include possible taxes on billionaires, plastic production, and crypto mining.

The report cites research by the International Monetary Fund (IMF) that settles on $0.045 per kWh as the amount needed for a corrective tax to make up for the impact crypto mining has on the climate. That’s based on the consequences of the greenhouse gas emissions causing climate change and exacerbating disasters including storms, droughts, and wildfires. Taking into account other kinds of air pollution from burning fossil fuels, that tax rises to $0.085 per kWh.

“The fundamental idea of the correction is to increase the cost of pollution so that [those emitters] internalize the cost they impose on others,” says Shafik Hebous, lead author of the research that the task force cites and deputy division chief in the IMF’s fiscal affairs department.

Authenticating a single Bitcoin transaction requires as much electricity as a person in Ghana might use over three years or a person in Germany might burn through in three months, according to the IMF. Bitcoin miners operate big data centers filled with specialized hardware that solve puzzles around the clock to validate transactions. They eat up a lot of electricity in the process and earn Bitcoin in return.

The hope is that placing a tax on that electricity consumption could incentivize crypto miners to use more efficient hardware or even persuade the Bitcoin network to turn to a less energy-intensive method for validating transactions, much like Ethereum. By charging more for dirty sources of energy, the levy could also push miners to use more renewable energy.

There aren’t many details yet from the task force about how a global levy on crypto mining would actually work. There are big questions about how the money would be collected and how it would be used. So far, the group’s plan is to present concrete proposals at the spring meetings of the IMF and World Bank in April of next year. From there, they’d have to garner enough support for the levies to push for their implementation during the next major UN climate summit in Brazil in November 2025.

Kazakhstan, a big hub for Bitcoin mining, implemented a tax on crypto miners’ electricity use in 2022 and collected around $7 million from it that year. In the US, where more Bitcoin mining takes place than any other country, the Biden administration has proposed a 30 percent tax on crypto miners’ electricity consumption. President-elect Donald Trump, whose campaign was boosted by prominent crypto investor donors, is unlikely to support a climate levy.

The price of Bitcoin has soared to astonishing heights since Trump’s election, surging on expectations that his administration will be supportive of the industry. A higher price typically incentivizes more mining, which means more energy consumption and greenhouse gas emissions.

The report dropped during climate negotiations at the UN summit in Baku, Azerbaijan, this month that were focused primarily on financing. Delegates from nearly 200 countries were wrangling over how much money wealthy nations, including countries like the US that have caused the most climate change with their greenhouse gas emissions, should contribute in aid to poorer countries most vulnerable to global warming. At the summit, the task force launched a broader Coalition for Solidarity Levies that now includes 17 countries and partner organizations including the African Union and the European Commission.

“There can be no climate justice without fiscal justice, as all countries are facing the same challenge: how to fund the transition while ensuring that those with the greatest means and the highest emissions pay their fair share,” Laurence Tubiana, co-lead of the Global Solidarity Levies Task Force Secretariat and CEO of the European Climate Foundation, said in a press release with the report launch. 

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How AT&T, Verizon, and T-Mobile are responding to the LA wildfires

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As wildfires continue to devastate parts of Los Angeles County, hundreds of thousands of residents are without power as utility crews work to restore connectivity. Mobile carriers are also taking action to keep their services online and provide relief to affected residents.

Here’s how major carriers are responding.

In an update on Thursday, Verizon said it will waive call, text, and data usage incurred by prepaid and postpaid customers in Los Angeles, Orange, Riverside, San Bernardino, San Diego, and Ventura counties from January 9th to the 18th. Verizon will automatically credit customers if they were billed for overages during this time.

Additionally, the company is extending service end dates for customers using prepaid services, including Straight Talk, Tracfone, Total Wireless, Simple Mobile, Walmart Family Mobile, Net10, GoSmart, and Page Plus, until January 18th, 2025. It’s also working with LA County officials to “aggressively deploy portable generators and mitigate impacts for those customers affected across the area.”

T-Mobile is similarly offering unlimited talk, text, and data for T-Mobile and Assurance Wireless customers across Altadena, La Cañada Flintridge, Los Angeles, Palisades, Pasadena, and Sierra Madre from January 8th to January 15th.

Meanwhile, the T-Mobile-owned Mint Mobile will increase the available data for users on 5GB, 15GB, and 20GB plans to 50GB through their current billing cycle, while Mint Unlimited customers in the area can use up to 2TB of high-speed data with no hotspot restrictions.

T-Mobile is also teaming up with SpaceX’s Starlink to temporarily deploy an “early test version” of its direct-to-cell satellite service, allowing people in affected areas to receive wireless emergency alerts and send SMS texts. At the same time, T-Mobile is working to deploy and refuel portable generators to keep its network online.

AT&T FirstNet’s satellite-equipped truck provides emergency communications.

AT&T will waive overage charges for prepaid and postpaid customers affected by the wildfires through February 6th. The company notes that customers in parts of Los Angeles, Orange, Riverside, San Bernardino, San Diego, and Ventura counties may experience home phone and internet disruptions due to power outages in the area.

Along with continuously deploying and refueling generators, AT&T has dispatched its disaster response team to help keep its wireless and wireline communications up and running. Its FirstNet Response Operations Group — a team led by former first responders who help during emergencies — “have been deployed to support firefighters and other first responders on the front lines where they need connectivity the most,” according to AT&T.

Starlink is providing free services to these areas affected by the wildfires.
Image: Starlink

Though Starlink isn’t a mobile carrier, it’s still working to provide LA County residents with satellite internet connectivity. Residents impacted by the wildfires can access Starlink for free through February 10th by placing an order through starlink.com/residential and choosing the “Disaster Relief” service plan. However, users still need to purchase a Starlink kit to access the free service.

Customers who already use Starlink will receive a one-month service credit.

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Joe Biden’s national climate adviser sees AI as a ‘massive opportunity’

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Sure, President-elect Donald Trump is probably going to try to blow up efforts to tackle climate change as soon as he steps into office. There still isn’t enough renewable energy available to reach US climate goals or even meet skyrocketing electricity demand from AI. And time is running out to spend down climate funds from the Inflation Reduction Act before the Trump administration can attempt to claw it back. Despite it all, Joe Biden’s top adviser on climate change, Ali Zaidi, isn’t sweating it.  

He’s managed to keep the perhaps cloyingly upbeat optimism that’s become a trademark of the Biden and Harris camp even when that enthusiasm doesn’t necessarily reflect sentiment on the ground. The Verge spoke with White House national climate adviser Zaidi this week about what he sees ahead for clean energy technologies and where there might still be room for progress.

This interview has been edited for length and clarity.

You have a background in law. How did climate change become your thing?

I came to the United States at the age of six, and for me, for my family, the story of America is the story of economic mobility. I really came to Washington wanting to work on putting more rungs in the ladder into the American dream, and it turns out that the biggest economic opportunity of the moment is tackling this crisis that impacts the most vulnerable Americans and the most vulnerable folks around the world.

“A tech-agnostic race”

I did not come to this work from the tree hugging side of the movement. I came to it with real, deep conviction that this was my way to give back to the economic opportunity engine that this country has been for so many who strive to reach the American dream.

President-elect Donald Trump says he’ll take the US out of the Paris climate accord and “drill, baby, drill.” How worried are you about the Trump administration undoing progress the US has made on clean energy? 

You know, I think that US progress will continue in a pretty robust way. This project is not just a project about climate and reducing emissions. It’s a project of invigorating our energy security and bringing economic revival to places that have been left out and left behind. 

The incentive to finish the job is stronger because the incentive is shared, and that’s how we’ve structured it on purpose. The other thing that I think is really powerful is that we’ve really set out a tech-agnostic race to net zero emissions as the North Star.

When we talk about decarbonizing the electricity grid, making it more modern, making it more resilient, sometimes that conversation is caricatured as a conversation about solar and wind. But look at what’s been happening in the United States, you’ve got a mega project now under construction in Utah. It’s a two gigawatt project, the size of the Hoover Dam in terms of electricity that’s going to produce power from hot rocks under our feet — geothermal energy. You’ve got wind, not just being deployed on the plains as it has been for decades, but now delivering electricity from offshore.

You have a nuclear renaissance taking place in the United States, the first new nuclear reactor in decades. I was there in Georgia as it came online. Plants that have been retired, like the Palisades plant in western Michigan. I went to the Palisades plant coming out of retirement, the workers coming out of retirement to bring electricity back to the grid and the next generation of reactors

We, as a federal government, should be a partner in helping catalyze all of that progress, whatever shape it takes. And you see that repeated in other sectors. With the transportation sector, it doesn’t matter to us if it’s strong, hybridization, fully electric, hydrogen, sustainable aviation, or biofuels. What we care about is two things: bending the curve of emissions and widening the aperture for economic opportunity.

The culture war over clean energy often swirls around this idea of individual choice — I should be able to choose to drive a gas-guzzling car if I want to or cook on a gas stove instead of going electric. What’s your take on that? 

We have to meet people where they are as we take on the climate crisis, period, full stop. One of the things that the world has learned so clearly about decarbonization is that there is no social license for decarbonization pathways that put upward pressure on consumer prices. So part of decarbonization has to be about making people’s lives better, delivering a better product, winning them over.

We saw this with LEDs. I was around at the beginning of the Obama administration when, for the first time, the United States got in the business of manufacturing LED lightbulbs. They used to cost a lot of money, but there was a technology cost curve there. And because we invested in it, the US was able to help make those cheaper and more affordable, and it turned out to be a better product. And now, across the country that technology is ubiquitous. I think that’s the way we win the future, is by delivering people a better product that also, by the way, doesn’t pump a bunch of pollution into the sky.

Countries that have signed onto the Paris agreement are supposed to update their national climate plans this year, and the Biden administration submitted a more ambitious plan last month of cutting greenhouse gas emissions by more than 60 percent by 2035. How can the US still achieve that goal?

I think the way we go the distance and meet this next target in 2035 is by continuing to invest in America, and here’s what that looks like. The farm bill will be in front of the Congress. It’s overdue, but it will be in front of this next Congress. They have an opportunity to act on whether they invest in increased total factor productivity in the agricultural sector. Turns out precision agriculture is also climate-smart agriculture. So will Congress, through the farm bill, invest more into climate-smart agriculture, into precision agriculture technologies, into the things that shore up the economics of our family farmers and boost the competitiveness of the sector? 

What we’re seeing at the state level is a massive mobilization to continue to accelerate decarbonization on the grid and in the transportation sector. There’s also this incredible industrial capacity. When we came into office, you barely made any batteries in the United States. Tesla, maybe a few others, but very limited battery capacity. By 2030, factories that are already underway, either operating or in construction, will have the capacity to manufacture 10 million vehicles’ worth of batteries in the United States. We sell, on average, 15 million vehicles a year. I think you’ll actually see private capital continue to build on the momentum of that transformation. 

And so another reason we think we’re going to keep picking up momentum is because private capital sees the win and is actually going to continue to make that bet in sectors like power and transportation. Clean energy is literally cheaper than dirtier power. And so that’s just where the smart money is going. In 2024, for example, we expect that 96 percent of what will have been built will be clean energy.

I think what we will need to do more of as a country — and that means state and local as well — is help families cut their utility bills at home. There’s this massive opportunity in our built environment to reduce energy waste and put consumers in control of their energy bills. And if we do that, that’s obviously great retail-level economics. It’s also going to be a big win for the climate. 

When it comes to lowering Americans’ utility bills and taking action on climate change, one of the concerns I hear a lot about is AI and the energy demand of data centers. How are you thinking about that? 

I’ve joined meetings with CEOs of the technology firms. I’ve also met with CEOs from the electricity sector. There is a consensus in industry and there is a consensus in the US government that we will and must seize the leadership opportunity in the development of AI technologies. And that means we must take away the barriers deploying clean power on the grid that is necessary to facilitate the buildout of these data centers. 

I have full confidence, not only in the federal government and in the technology entrepreneurs and their companies, but in state and local governments that they see the economic opportunity, they see the security imperative, and they also get that deploying clean power in almost all cases will be the cheapest, fastest, and safest way to get electricity to these new data centers. 

And so I don’t see these objectives at cross purposes with one another. I actually see AI as an accelerant to our ambition on the electricity grid. AI as an accelerant to advance grid modernization. This is a massive opportunity. But I also am the person who often sees opportunity in headwinds. So maybe that’s my bias.

We have to talk about the Inflation Reduction Act — the biggest piece of climate legislation to date, creating $369 billion for climate action and clean energy. But Trump says he’ll rescind any unspent funds. How much is left to dole out?

Very little. I remember this was a Google doc on my computer back in the summer of 2020 and Zoom calls with, at the time, the candidate. One of the big things that we did when we were designing what became the Inflation Reduction Act was to make sure it was structured in a way that reached every part of the economy. That it was structured in a way where the IRA came in, or the government came in, as booster packs to a rocket. The rocket was the private sector. And I think what you find with the Inflation Reduction Act now is that the rocket’s achieved escape velocity in so many parts of the economy. You’ve got 100 gigawatts of energy that relied on these tax credits to get off the ground, but now it’s up in the air. It’s flying. You can’t put that back in the bottle.

On the unspent funds, we are at a place where we’re north of $9 out of every $10 of grant funding and other similar dollars that have already hit the economic bloodstream across the country. 

The question then becomes, do you want to go and unplug economic opportunity that is now responsible for thousands of factory jobs and construction jobs all across the country? And I think that’s both a challenging economic proposition and also a very challenging political proposition. It’s why what you’ve heard even in Congress is that maybe they are interested in a scalpel approach, if I’m quoting the incoming speaker. That is still quite challenging. The way I think about it is, you know, Jenga blocks. When you’re pulling the blocks out of a Jenga tower, you don’t know which one is going to threaten the structural integrity of the whole thing. 

We are in a moment of economic uplift and revitalization, a manufacturing renaissance. America at the frontier of energy security and energy technology, finally fighting to win the global competition and pulling along jobs and opportunity at the local level. I don’t know that I would want to be in the business of pulling blocks out of the Jenga tower, but we will leave that to the judgment of the team that comes in in a few weeks.

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Drone takes out Super Scooper fighting Los Angeles wildfires

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An aircraft helping to fight wildfires that are raging across Los Angeles was struck by a civilian drone on Thursday. The collision damaged the wing of the aircraft — a CL-415 “Super Scooper” capable of scooping up 1,600 gallons of ocean water to drop onto nearby blazes — according to a statement by the LA County Fire Department posted on X, putting it out of service until it can be repaired.

Cal Fire spokesman Chris Thomas told The New York Times that grounding the aircraft will likely set back local firefighting efforts. Super Scoopers can typically refill in about five minutes. But even if it takes ten, that’s six water drops that are lost each hour according to Thomas. “So whose house is not going to get that water to protect it?” The Federal Aviation Administration (FAA) says the Super Scooper landed safely after the drone impact, and that the incident is now under investigation.

Temporary flight restrictions have been implemented in the Los Angeles area that prohibit drones and other aircraft from flying without FAA authorization in an effort to protect firefighting efforts.

According to LA County Fire Chief Anthony Marrone, the drone was not assigned to help tackle the Palisades fires, and was destroyed in the collision. Marrone told the LA Times that the FBI is now planning to implement so-called “aerial armor” in the area to prevent further interference from drones.

Several people online have violated the FAA-enforced flight restrictions, posting viral drone photos and video footage across social media showing the devastation from what appears to be prohibited airspace. Fire response agencies are often forced to ground their own aircraft to avoid collisions when dummies fly drones near wildfires for online clout.

“It’s a federal crime, punishable by up to 12 months in prison, to interfere with firefighting efforts on public lands,” the FAA said in a statement. “Additionally, the FAA can impose a civil penalty of up to $75,000 against any drone pilot who interferes with wildfire suppression, law enforcement or emergency response operations. The FAA treats these violations seriously and immediately considers swift enforcement action for these offenses.”

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