Elon Musk is a poster child of low-carbon technology. Yet the electric carmaker’s backing of bitcoin this week could turbo-charge global use of a currency that’s estimated to cause more pollution than a small country every year.
Tesla Inc revealed on Monday it had bought $1.5 billion of bitcoin and would soon accept it as payment for cars, sending the price of the cryptocurrency through the roof.
Although on the surface bitcoin seems harmless, even environmentally friendly, that is not the case.
The digital currency is created when high-powered computers compete against other machines to solve complex mathematical puzzles, an energy-intensive process that currently often relies on fossil fuels, particularly coal, the dirtiest of them all, reports Reuters.
At current rates, such bitcoin “mining” uses about the same amount of energy annually as the Netherlands did in 2019, the latest available data from the University of Cambridge and the International Energy Agency shows.
The landmark inclusion of the cryptocurrency in Tesla’s investment portfolio could complicate the company’s zero-emissions ethos, according to some investors, at a time when ESG – environmental, social and governance – considerations have become a major factor for global investors as well.
