Accounting for carbon emissions caused by cryptocurrency and token\n systems

Abstract

The energy consumption and related carbon emissions of cryptocurrencies such\nas Bitcoin are subject to extensive discussion in public, academia, and\nindustry. As cryptocurrencies continue their journey into mainstream finance,\nincentives to participate in the networks and consume energy to do so remain\nsignificant. First guidance on how to allocate the carbon footprint of the\nBitcoin network to single investors exist, however a holistic framework\ncapturing a wider range of cryptocurrencies and tokens remains absent. This\nwhite paper explores different approaches of how to allocate emissions caused\nby cryptocurrencies and tokens. Based on our analysis of the strengths and\nlimitations of potential approaches, we propose a framework that combines key\ndrivers of emissions in Proof of Work and Proof of Stake networks.\n