Computation-intensive digital industries are rapidly expanding, yet there is little evidence on how to regulate their carbon emissions. This webinar examines the effectiveness of different decarbonisation policies and their broader implications for the design of carbon regulation in digital sectors. Using cryptocurrency mining as the empirical setting, the analysis focuses on two policy options: state-led ban and private-sector adoption of cleaner technology.
China’s cryptocurrency mining ban provides an example of the first option. The ban reduced electricity consumption by about 5% and cut monthly carbon emissions by 3.8 million tonnes across four major mining provinces. Yet mining equipment relocated abroad, particularly to US mining hubs. The second option is exemplified by Ethereum’s transition away from proof-of-work mining. It also reduced electricity consumption, but miners redeployed their computing capacity to other cryptocurrencies using similar hardware and mining algorithms. In each case, carbon leakage diluted about one-third of the emissions benefit.
The regulatory challenge extends to AI and data centres, where workloads can shift across locations and hardware can be redeployed across tasks. Effective decarbonisation therefore requires coordinated emissions disclosure and carbon pricing across the global digital sector.