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Comment by cwkoss | Hacker News Reader

The idea of taxing cryptocurrencies specifically for carbon emissions is some mixture of naive, shallow and sour grapes. There are a lot of wasteful industries - crypto is a small slice of the overall pie and is arguably the most responsive to market forces.

Make universally applied carbon taxes across all industries and let the market sort it out. I'm a crypto bull, and fully support greening our energy economy. Advocating taxing energy consumption based on use is a recipe for corrupt insider dealing and political favoritism.

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There are a lot of wasteful industries - crypto is a small slice

The difference between crypto and things like agriculture or transportation is obvious. People need food and transportation. If crypto was eliminated entirely tomorrow, on average, no one would suffer - some would lose relative wealth but others would gain relative wealth. Unlike conventional financial markets even, it's hard to argue crypto provides any kind of incentive for efficiency.

Indeed, if crypto mining was punishingly taxed but crypto itself continued, almost no one would suffer, including most crypto holders.

What about commercial cruise lines? Do people need to go on cruises? The cruise industry uses over double the emissions of the bitcoin protocol[0].

Furthermore, millions would be affected if bitcoin were to go offline tomorrow. Particularly people living in authoritarian states[1], or people who do not have access to traditional banking services.

[0] https://twitter.com/gladstein/status/1414065840157347840?s=2... [1] https://www.theguardian.com/technology/2021/jul/31/out-of-co...

Most of the discussion about "eliminating" and/or taxing cryptocurrency are about trying to reduce the use of cryptocurrencies within developed countries where they are not needed.

Nobody here is trying to stop people in authoritarian states from using crypto.

Bringing up the authoritarian states is just a strawman.

What happens when those developed countries become authoritarian? Or starts printing trillions of dollars?

I think climate change is the bigger risk here in context.

But cryptocurrencies don't appear to need proof of work.

Proof of work has demonstrated security over time. It costs a lot to do so - as soon as Proof of Stake or another system can provide the same level of security assurance, the market will rapidly shift there to capture the benefit without the costs.

I don't think the bitcoin community is capable of making a change that large at this point, other ideological objections that they have against PoS aside.

Another option would be continually adjusting the block reward to not over subsidize mining.

Block reward is effectively adjusted via difficulty retargeting every 2 weeks.

The amount issued doesn't change, but the expected value of a number of hashes changes significantly.

Block reward is only changed on halvenings. Difficulty retargeting changes to try to keep blocks and therefore bitcoin emissions per unit of time (10 minutes) the same.

The issue is that there is now too much electricity & therefore carbon emissions being spent on security the bitcoin blockchain. If the bitcoin community could adjust this down for slightly lower 51% attack defense they might be able to avoid the pressure from outside groups.

But the bitcoin community has shown it's self unable to make changes or establish any consensus outside of what is already believed.

If just mining was taxed, ordinary crypto transactions would be quite possible.

But regardless by allowing transaction outside of state control, crypto may indeed help some hard bitten business people but simultaneously helps a vast array of criminals, from ransomware gangs to corrupt third world officials expatriating bribes and theft.

> The cruise industry uses over double the emissions of the bitcoin protocol

Not to defend the cruise lines, but that quote appears bogus. The tweet you cite refers to a "carbon footprint", in response to a quote about particulate emissions (using sulfur dioxide as an example).

This [1] puts total cruise line CO2 emissions in 2017 (first source I picked, but I imagine the number won't have changed much) at 21K tons, whereas a recent Reuters article [2] put Bitcoin at 22,000K tons of CO2.

If the above data is correct, then Bitcoin is responsible for more than 1000x as many CO2 emissions as cruise ships.

[1] https://www.tourismdashboard.org/explore-the-data/cruise-shi...

[2] https://www.reuters.com/technology/how-big-is-bitcoins-carbo...

Gaming, fashion, entertainment in general - all wasteful without a good need, has to go, massive energy savings and carbon.

Has "The idea of taxing cryptocurrencies specifically for carbon emissions" been proposed? I don't see it mentioned in the article discussed here. I wish the article had proposed that idea, it'd be more complete if it had -- it doesn't propose anything as far as I can tell.

I agree that a general carbon tax would be better, and as a bonus, there's various progress toward just that around the world. But I'd find the argument you're making more compelling as a rebut to focus on cryptocurrency carbon footprint if the players in the cyrptocurrency industry were forcefully lobbying for general carbon taxes. Are there any examples of that?

> Make universally applied carbon taxes across all industries and let the market sort it out

Globally?

I'd apply the tax globally, but make it proportional to GDP/capita.

A way to enforce this is tariffs.

Both economically inefficient and unlikely to be agreed upon across countries. Perfect.

Problem is, some people barely afford important things, while others easily affords unimportant things. Taxing everything at the same level will either: 1. Push millions of people into extreme poverty. 2. Or, be so low impact that it is ineffective for reducing carbon emissions.

What's the solution? We should not tax all things equal.

In a perfect market, a global carbon tax would be excellent. Unfortunately we do not live in (anything resembling) a perfect market.

Ideally and eventually, but I have no qualms with the US implementing a carbon tax first to demonstrate leadership in this space.

> There are a lot of wasteful industries

So what? These whataboutisms add nothing to the conversation.

People aren't going to stop caring about the carbon costs of crypto because other industries also suck. Think about it as an adoption blocker -- if your particular tech fetish can't address an issue that many, many people care about it is destined to be usurped by something that can. Would be awesome if the 'crypto bulls' would expend as much energy into ways to fix the carbon problem as they do arguing it doesn't matter.

Because we need a carbon tax. A carbon tax would be SO much more impactful for avoiding 2C and beyond than just a crypto tax.

Already happening.

Crazy mandated ethanol blending.

Hydrogen "superhighways"

etc

The problem with this is that poor people will not be able to keep their fridge powered if energy became too expensive.

Could the solution be graduated luxury carbon taxes on unnecessary consumption, like private jets, regular flights, non critical home AC, Christmas lights, PC gaming, etc?

Just tax everything the amount it costs to clean up the pollution it causes, and then use that money to clean up the pollution.

Subsidize the poor as we've always done.

Maybe change the way we subsidize them. The negative income tax can be used for basically any form of pigovian tax revenue.

Yes, please. Low tax on essentials. High tax on the overconsumption of carbon intensive economic activity in the rich world.

Market value says very little about true value of goods and services globally. Why should we let it decide how to prioritize the little carbon emission we can afford?

Western countries tend to subsidize the basic needs of the poor. I'm sure if it came to it and it became a big issue they would get some governmental aid just like with transit or foodstamps or housing or education or healthcare anything else that slips out of reach for the poor.

If we are going to decide some carbon emissions more essential than others. Why not just exclude them from the carbon taxation to begin with?

Because wealthier groups and individuals can afford to pay taxes that impoverished people can't? There are all kinds of subsidies for the poor today where wealthier people pay a higher price. There is precedent here for that.

> Because wealthier groups and individuals can afford to pay taxes that impoverished people can't?

Yes, definitely. I could afford paying 50% tax on flights. Most people in the world could not pay 50% more for their transportation.

The problem with a carbon tax is that it values all emissions equally. But on a global scale, some emissions are more essential than others. (Food, shelter, transportation to work etc)

That's the benefit of it isn't it? Its supposed to force paradigm shifts in how we fuel our supply chain. It's supposed to not maximize profit in the near term. It's not good that our most basic needs are so reliant on greenhouse gas emissions and if we continue to subsidize the emissions of this market with our health and ecology nothing will ever change.

I agree with you that the whole economy needs to shift eventually. But as I see it, the most utilitarian way to reduce emissions would be to reduce the overconsumption of carbon emissions in the rich world. The market will not produce the "correct signal" to achieve this because of the enormous income disparity in the global economy.

Example: India vs Us carbon emissions per Capita is 4 times higher than India GDP vs Us GDP per Capita.

Any price increase on carbon will be felt 4x more by an Indian than by an American.

Every carbon tax proposal includes a section that redistributes the money to the people (with poor people getting more of that redistributed money).

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