• Bitcoin mining has zero carbon emissions, and policies to reduce carbon emissions should focus on real polluters like airplanes and coal power plants.
  • The New York Times is introducing a dangerous new accounting method called “fractional reserve indirect carbon accounting” (FRICA), which assumes that every incremental increase in electricity consumption always increases electricity production from a natural gas power plant.
  • This bad accounting ignores the actual balance sheet assets and hides the fact that Texas is a leader in renewable energy, despite FRICA’s absurd conclusion that 100% of electricity is produced by natural gas power plants.

Bitcoin Mining & Carbon Emissions

Bitcoin mining has no inherent carbon emissions, making any policies targeting Bitcoin miners an unscientific overreach. Real carbon emitters like airplanes and coal power plants should be the sole focus of efforts to reduce emissions. However, The New York Times recently revealed its plans to introduce a new form of indirect carbon accounting for Bitcoin miners, called “fractional reserve indirect carbon accounting” (FRICA).

“Fractional Reserve Indirect Carbon Accounting” (FRICA)

FRICA is similar to fractional reserve banking, where banks only hold a small percentage of customers’ money while lending out the rest. In this case, FRICA would withdraw one “marginal” dollar from Bitcoin miners and then claim that not only are they solvent, but also 100% cash reserved. This method ignores real balance sheet assets such as renewable energy sources like nuclear, solar, or wind. It also assumes that any single consumer turning off their electricity will decrease marginal demand for natural gas-powered plants—even though ERCOT reported in 2022 that 40% of Texas’ electricity came from renewables while 60% was from natural gas or coal. In effect, FRICA’s conclusion would be that 100% of electricity comes from natural gas instead of acknowledging the presence of clean alternatives.

Unscientific Double-Counting

Electricity producers’ Scope 1 direct emissions already account for CO2 released into the atmosphere without double-counting with fictitious “indirect Scope 2” emissions—the only purpose of doing so would be to expand government bureaucracy’s influence. The New York Times never applies this same methodology to other industries; it is using it solely to attack Bitcoin mining operations.

Texas: Leader in Renewable Energy

The introduction of FRICA creates an inaccurate narrative about Texas’ success with renewable energy production: even if only 1% were powered by natural gas plants, FRICA would state otherwise. It paints an incomplete picture by obscuring facts about renewables’ positive impact on total energy production in the area—a discouraging prospect for those hoping to see continued progress against climate change through clean energy solutions.

Conclusion

In summary, Bitcoin mining does not create direct CO2 emissions; thus any policies targeting them are misguided at best and politically motivated at worst. Furthermore, The New York Times’ proposed fractional reserve indirect carbon accounting method introduces an unscientific fiction designed to obscure facts about successful renewable energy initiatives across Texas and other areas working towards a cleaner future

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