DP16267 Machine Learning the Carbon Footprint of Bitcoin Mining

Author(s): Hector F. Calvo Pardo, Tullio Mancini, Jose Olmo
Publication Date: June 2021
Keyword(s): carbon footprint, climate change, cryptocurrencies, Feed- forward Neural Networks, Machine Learning, Nowcasting
JEL(s): C45, C55, F55, F64, Q47, Q54
Programme Areas: Public Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=16267

Building on an economic model of rational Bitcoin mining, we measure the carbon footprint of Bitcoin mining power consumption using feedforward neural networks. After reviewing the literature on deep learning methods, we find associated carbon footprints of 3.8038, 23.8313 and 19.83472 MtCOe for 2017, 2018 and 2019, which conform with recent estimates, lie within the economic model bounds while delivering much narrower confidence intervals, and yet raise alarming concerns, given recent evidence from climate-weather integrated models. We demonstrate how machine learning methods can contribute to non-for-profit pressing societal issues, like global warming, where data complexity and availability can be overcome.