The White House’s Council of Economic Advisors has raised concerns about the impact of crypto asset mining on the environment, stating that it leads to negative spillovers on the environment, quality of life, and electricity grids in the United States. In response to these concerns, the Biden administration is proposing the Digital Asset Mining Energy (DAME) tax. The tax will gradually increase and ultimately reach 30%, with the aim of encouraging companies to take better account of the harms they impose on society.
Controversy over Comparisons and Neglected Factors
The White House has referred to a recent New York Times article, which has been criticized for being a biased “one-side hit piece” that relied on outdated data and did not provide any counterarguments. The Biden administration has drawn comparisons between the electricity used for mining and power consumption for residential lighting, which has been viewed as an attempt to deceive readers into thinking that technology is taking energy resources away from human use. However, this comparison overlooks the benefits of applied direct response systems and current research findings from ESG analyst Daniel Batten.
The White House has also failed to acknowledge renewable energy sources leveraged by bitcoin miners or how mining can mitigate flare emissions. Additionally, the White House contends that miners who use renewable energy actually reduce the amount of clean power available for other uses, leading to increased prices for consumers. The term “dirty” has been used multiple times to refer to supposedly “dirtier sources of electricity.”
Efforts to Fight Climate Change
The White House has emphasized that the DAME tax is only one example of the administration’s efforts to fight climate change. It represents the start of having crypto miners pay their fair share of the costs imposed on local communities and the environment. With this tax, the Biden administration hopes to encourage companies to become more environmentally responsible and take into account the negative impact of their operations on society.