The Unintended Carbon Consequences of Bitcoin Mining Bans: A Paradox in Environmental Policy

The MiCA Crypto Alliance has published a new report examining how Bitcoin mining bans can unintentionally raise global carbon emissions. The study models how restrictions in low-carbon regions often displace mining to higher-emission jurisdictions, creating a paradox in environmental policy.

Our findings show that bans typically move operations, not emissions. When activity shifts from places like Canada, Norway or the EU to regions with more carbon-intensive grids, the overall footprint of Bitcoin mining increases rather than decreases.

Key insights from the report include:

• Bans displace mining, not emissions
• Displacement leads to carbon leakage, not decarbonisation
• An EU-wide ban could result in an additional 523,000 tonnes CO₂ per year
• The local energy mix is the decisive factor in policy outcomes
• Incentive-based regulation that enables clean mining is more effective than outright bans

We believe climate policy should be driven by evidence. To reduce emissions in the crypto sector, regulators must focus on where energy is sourced and how activity is incentivised, rather than relying on prohibitions that risk unintended consequences.

Read the full report.