When cryptocurrency Ethereum switched to the less energy-intensive Proof of Stake algorithm in 2022, it reduced its emissions by over 99 percent. Ethereum’s yearly emissions are now equivalent to five round-trip flights from London to New York. This is a comparative drop in the ocean compared to the emissions of other cryptocurrencies such as Bitcoin. One single Bitcon transaction releases the same greenhouse gas emissions as driving a car around 1,600 to 2,600 kilometers.
But, given that Ethereum used to run on the energy-intensive Proof of Work algorithm, its historic emissions equate to 18.1 million metric tonnes of CO2. Using the tool Carbon.fyi, Ethereum users can check the emissions of their personal Ethereum usage. Then, they can sign up for a subscription with the carbon offsetting scheme Offsetra to negate the carbon they’ve emitted over time.
Offsetra builds awareness of the carbon impact of blockchain
Carbon.fyi is an open-source tool created by Offsetra that calculates the emissions of an Ethereum address. It considers where Ethereum mining pools are located and when a user’s transaction took place. According to Offsetra, “These numbers are the most fair, accurate, and up-to-date estimates available.” Tara Merk, PhD candidate at BlockchainGov and Associate Researcher at the Weizenbaum Insitute, spoke to RESET about the Carbon.fyi tool. “Calculating the carbon emissions of our individual online behaviour is really important to create awareness for the environmental impact of digital technologies,” she said.
Once they’re informed about the emissions of their Ethereum, users can then sign up for an Offsetra subscription. £16 a month offsets 2000kg of CO2 via collaborations with reforestation, conservation and wind energy projects. Offsetra also gives its members a referral code to share with their network. This allows them to measure their ‘carbon handprint’, namely, how much carbon has been offset by people they have encouraged to sign up for Offsetra.
Offsetting isn’t a replacement for emissions reduction
Balancing out our digital footprint with an offset scheme isn’t always a quick fix for our carbon emissions. Some schemes do more harm than good; a nine-month investigation by the Guardian, Die Zeit and SourceMaterial revealed that 94 percent of carbon credits from the offset scheme Verra didn’t benefit the climate at all. Other schemes have come under fire for taking indigenous land or forcibly evicting residents in order to make space for offsetting projects. While Offsetra states that they choose projects “with a verified, quantifiable impact and third-party verification and certification”, it’s crucial to personally research the projects your carbon offsets are supporting.
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Another issue with offsetting schemes is that they shift the focus from reducing our emissions to mindlessly offsetting what we emit. But, thanks to the Carbon.fyi tool, Ethereum users are encouraged to be aware of their digital footprint before they offset it via Offsetra.
So will Offsetra’s scheme be enough to reduce the carbon emissions of crypto users? Merk believes that, given the ongoing escalation of the climate crisis, “we need to move beyond individual voluntary action and funding.” Read our blockchain explainer for more solutions beyond offsetting that will help the crypto community reduce their digital footprint.
