{
  "title": "Cryptocarbon: How Much Is the Corrective Tax?",
  "publication": "IMF Working Papers, September 15, 2023",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2023/09/15/cryptocarbon-how-much-is-the-corrective-tax-539214",
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  "summary": "With increasing awareness of past environmental damage from crypto mining, questions arise as to how persistent the problem will be in the future and how taxation can help in addressing this negative externality.",
  "sections": [
    {
      "heading": "Summary findings",
      "content": "- Global demand for electricity by crypto miners reached that of Australia or Spain.\n- Crypto mining resulted in 0.33% of global CO2 emissions in 2022.\n- The average corrective excise on the electricity used by crypto miners is estimated at USD 0.045 per kWh.\n- Including air pollution costs raises the corrective excise to USD 0.087 per kWh.\n- Country-specific corrective tax estimates vary depending on countries' electricity sources."
    },
    {
      "heading": "Projections and scenarios",
      "content": "- Projections suggest sustained future electricity demand from crypto mining.\n- CO2 emissions from crypto mining are projected to increase further if:\n  - crypto prices significantly increase, and\n  - the energy efficiency of mining hardware is low."
    },
    {
      "heading": "Corrective tax calculations and scope",
      "content": "- The corrective excise targets the electricity used by crypto miners to address negative externalities related to global warming.\n- When air pollution costs are incorporated into the social cost calculation, the estimated tax more than doubles from USD 0.045 per kWh to USD 0.087 per kWh.\n- Heterogeneity in national electricity mixes produces variation in country-specific corrective excise levels."
    },
    {
      "heading": "Policy implications and recommendations",
      "content": "- Implement a corrective excise on electricity consumed by crypto mining to internalize greenhouse gas externalities.\n- Adjust excise levels to reflect:\n  - country-specific electricity generation sources, and\n  - inclusion of air pollution costs where relevant.\n- Monitor crypto prices and mining hardware energy efficiency as key determinants of future electricity demand and emissions trajectories."
    },
    {
      "heading": "Key statistics and metadata preserved from the source",
      "content": "- 0.33% of global CO2 emissions in 2022 attributable to crypto mining.\n- USD 0.045 per kWh: average corrective excise to address global warming.\n- USD 0.087 per kWh: corrective excise when air pollution costs are included.\n- Publication: IMF Working Paper No. 2023/194.\n- Pages: 32.\n- DOI: https://doi.org/10.5089/9798400256080.001\n- Author: Shafik Hebous.\n- Date: September 15, 2023.\n\nSource: \"Cryptocarbon: How Much Is the Corrective Tax?\", IMF Working Papers No. 2023/194.\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2023/09/15/cryptocarbon-how-much-is-the-corrective-tax-539214"
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    "Authors: Shafik Hebous",
    "Published: September 15, 2023",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9798400256080.001",
    "Global demand for electricity by crypto miners reached that of Australia or Spain.",
    "Crypto mining resulted in 0.33% of global CO2 emissions in 2022.",
    "The average corrective excise on the electricity used by crypto miners is estimated at USD 0.045 per kWh.",
    "Including air pollution costs raises the corrective excise to USD 0.087 per kWh.",
    "Country-specific corrective tax estimates vary depending on countries' electricity sources.",
    "Projections suggest sustained future electricity demand from crypto mining.",
    "CO2 emissions from crypto mining are projected to increase further if:",
    "The corrective excise targets the electricity used by crypto miners to address negative externalities related to global warming.",
    "When air pollution costs are incorporated into the social cost calculation, the estimated tax more than doubles from USD 0.045 per kWh to USD 0.087 per kWh.",
    "Heterogeneity in national electricity mixes produces variation in country-specific corrective excise levels.",
    "Implement a corrective excise on electricity consumed by crypto mining to internalize greenhouse gas externalities.",
    "Adjust excise levels to reflect:",
    "Monitor crypto prices and mining hardware energy efficiency as key determinants of future electricity demand and emissions trajectories.",
    "0.33% of global CO2 emissions in 2022 attributable to crypto mining.",
    "USD 0.045 per kWh: average corrective excise to address global warming.",
    "USD 0.087 per kWh: corrective excise when air pollution costs are included.",
    "Publication: IMF Working Paper No. 2023/194.",
    "Pages: 32.",
    "DOI: https://doi.org/10.5089/9798400256080.001",
    "Author: Shafik Hebous.",
    "Date: September 15, 2023.",
    "**Working Paper**"
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