 "COP29: Can revenue from crypto and plastic help fight climate change?")
Cryptocurrencies and plastics could help save the world from climate change—or, more precisely, the taxes on them could.
As global leaders convene for COP29 in Azerbaijan, a task force led by France, Kenya, and Barbados is urging countries to impose levies on these high-polluting industries to bridge the climate finance gap.
By generating billions through “Global Solidarity Levies,” this coalition believes we can help fund climate resilience and sustainability efforts in developing nations.
With proposed taxes on cryptocurrencies, plastics, and other major polluters, the task force aims to not only boost funding for climate action but also nudge these industries toward more sustainable practices.
The task force’s report says that many polluting industries contribute minimally to public finances, development, and climate mitigation. It proposes core levies on private jet fuel, frequent flyers, windfall fossil fuel profits, shipping, and financial instruments such as stocks, bonds, and derivatives.
Barbados Prime Minister Mia Mottley, a prominent advocate for climate action, spoke of the need to consider such levies.
She stated that taxing sectors like maritime, airlines, and fossil fuels could collectively generate approximately $350 billion annually, significantly augmenting public funding for climate initiatives.
Making crypto pay for its impact on climate
The report estimates that a levy on cryptocurrencies could raise $5.2 billion, addressing the high energy consumption associated with crypto mining and potentially reducing emissions. A tax on crypto transactions could generate “tens of billions a year.”
Cryptocurrency mining, particularly for proof-of-work currencies like Bitcoin, is quite energy-intensive. The University of Cambridge’s Bitcoin Electricity Consumption Index estimated worldwide bitcoin mining used 121.13 terawatt-hours of electricity in 2023.
Impact Shorts
More ShortsThat’s comparable to annual energy consumptions of multiple countries from the global south.
Needless to say, this level of consumption results in significant carbon dioxide emissions, contributing to global warming.
Focus on plastics
The plastics industry is also under scrutiny. The production and disposal of plastics are major contributors to greenhouse gas emissions. According to a 2019 report by the Centre for International Environmental Law (CIEL), if plastic production and use grow as currently planned, by 2030, these emissions could reach 1.34 gigatons per year.
That would be the equivalent to the emissions released by more than 295 new 500-megawatt coal-fired power plants.
The proposed levy on plastics could raise $25 to $35 billion annually, providing financial support to developing countries in their efforts to combat plastic pollution.
The 17-member coalition behind the task force includes the European Union and the African Union, with Brazil indicating its intention to join.
Implementing taxes on cryptocurrencies and plastics could serve dual purposes: generating essential funds for climate action and incentivising industries to adopt more sustainable practices.
With inputs from AFP
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