Ethereum’s Eco-Friendly Leap: From Honduras’ Emissions to Sustainable Blockchain

A recent University of Cambridge study has highlighted a significant environmental milestone for Ethereum, the blockchain platform hosting the world’s second-largest cryptocurrency, ether. Before its major software upgrade in September 2022, known as the “Merge,” Ethereum’s greenhouse gas emissions were comparable to the annual emissions of Honduras. However, post-upgrade, Ethereum has achieved a remarkable reduction in its environmental impact.

Blockchains, the digital ledgers behind cryptocurrencies, are known for their high energy consumption, often drawing criticism from environmentalists. The complexity in assessing the crypto sector’s environmental footprint, due to its opacity and decentralized nature, has been a challenge. This topic is especially pertinent as global leaders convene for the COP28 climate summit in Dubai, focusing on energy efficiency in industries.

Ethereum’s “Merge” has been a game-changer in this landscape. From its inception in 2015 until the upgrade, Ethereum’s emissions totaled 27.5 million tonnes of carbon dioxide equivalent (MtCO2e). To put this into perspective, Honduras emitted 27.7 MtCO2e in 2020. The upgrade has led to a dramatic shift, with Ethereum now using over 99% less energy. Its current annual emissions are about 2.8 kilotonnes CO2e, roughly equivalent to the emissions from five round-trip flights between London and New York.

Anna Lerner, executive director at the Ethereum Climate Platform, emphasized that Ethereum’s transformation challenges the perception of blockchain technology as inherently high-emitting. The platform’s significant reduction in emissions demonstrates that blockchain can evolve to become more environmentally friendly.

Alexander Neumueller, the study’s author and a leading researcher on digital assets’ climate impact at the University of Cambridge, regards this study as one of the most comprehensive examinations of Ethereum’s historical emissions. In contrast, Bitcoin, the largest blockchain and cryptocurrency, generates about 73.9 MtCO2e annually, equivalent to Cambodia’s emissions in 2020.

Despite their primary role as investment tools, cryptocurrencies like Bitcoin and Ethereum are making strides in reducing their environmental impact. Ethereum’s progress post-Merge sets a precedent in the crypto world, showcasing the potential for sustainable development in blockchain technology.