TechFlow news — On November 22, according to The Verge, at the closing stages of the United Nations climate summit, the Global Solidarity Tax Working Group—led by Kenya, Barbados, and France—released a significant report. The group proposed levying a climate tax on cryptocurrency mining activities at a rate of $0.045 per kilowatt-hour, which could generate approximately $5.2 billion annually to support climate action.
Research by Shafik Hebous, Deputy Division Chief in the Fiscal Affairs Department at the International Monetary Fund (IMF), shows that the electricity consumed by a single Bitcoin transaction equals the power usage of an average Ghanaian household over three years or a German household over three months. If air pollution from fossil fuel combustion is factored in, the recommended tax rate would rise to $0.085 per kilowatt-hour.
It is reported that Bitcoin’s annual electricity consumption has already surpassed that of most individual countries. Key objectives of the proposal include encouraging miners to adopt more energy-efficient equipment, promoting a transition toward renewable energy sources, and exploring more energy-efficient transaction validation methods. Additionally, the revenue collected would support low-income nations in transitioning to renewable energy and addressing the impacts of climate change.
The working group initially intended to focus primarily on taxing fossil fuel companies, aviation, and maritime industries but has now expanded its scope to include billionaires, plastic production, and cryptocurrency mining. The group plans to present specific tax proposals at the IMF and World Bank Spring Meetings in April 2025.
