Bitcoin Mining May Save The Planet, Ignoring It In ESG Funds Is ‘Gross Negligence,’ Climate Tech Investor Says 

Bitcoin mining may save the planet from environmental catastrophe, and that means asset managers that fail to consider Bitcoin-related investments in their Environmental, Social, and Governance (ESG) portfolios are committing ”gross negligence,” said climate tech investor Daniel Batten.

Batten, the co-founder of CH4 Capital, a fund that specializes in methane mitigation technologies, says in an article in Blockworks that his view is based on two months of research that showed flaws in the way it’s usually assumed Bitcoin mining is terrible for the environment. 

“The best way to slow down the impending environmental disaster, according to the United Nations, is to urgently reduce the amount of methane emissions,” he said. “And the best way to urgently reduce methane, funnily enough, just might be Bitcoin mining.”

Bitcoin Mining Offers Incentives To Capture Methane From Landfills

That’s because Bitcoin mining offers a financial incentive to capture methane from landfills, he said. Right now about half of the world’s landfills have no option to sell their power back to grids, he said, adding that an onsite customer ”would change everything.”

“This is where bitcoin mining’s huge use of electricity — 80% of their operating budget and once maligned by environmentalists — proves to be its biggest environmental asset,” he said. Bitcoin miners are in a ”unique position to make methane mitigation profitable for half of the world’s landfills,” he added

While not investment advice, this is my opinion as a fund manager on the ESG case for Bitcoin after 2 months due diligence.

If you’re a manager of fund where #bitcoin is an investment candidate: failure to consider #BTC in the mix is gross negligence to your ESG obligations

— Daniel Batten (@DSBatten) May 8, 2022

Batten challenges the conventional wisdom regarding Bitcoin’s environmental impact. Here are some of his key findings:

• Infrastructure Upgrades for Landfills:

  The adoption of Bitcoin mining can lead to upgraded infrastructure at landfills. These improvements can facilitate methane capture and utilization, making landfills more environmentally friendly.

• Sustainable Energy Use in Bitcoin Mining:

  Batten’s research reveals that 41 Bitcoin mining companies primarily or exclusively utilized renewable energy sources, contradicting claims that Bitcoin revives fossil fuel plants. “I found that the argument ‘Bitcoin revives old fossil fuel plants’ was not supported by Security Commission filings,” he said. “Instead, these filings clearly showed that the one gas plant claimed to have been revived for bitcoin mining was opened to provide additional power to the grid.”

• Emission Intensity:

  Contrary to claims of increasing emissions, Bitcoin mining was found to be mainly powered by hydroelectric sources, with 52.6% relying on sustainable energy, thereby reducing emission intensity. “Bitcoin mining was revealed to be mainly powered by hydro, 52.6% sustainable-energy powered, dropping in emission intensity markedly, and emitting 34 MT CO2e — a figure which has not increased over the last four-year cycle,” Batten said.

• Methane mitigation opportunity:

  Methane is a highly potent greenhouse gas, “84 times more warming than CO2 over a 20-year period,” and its emissions are increasing rapidly. Reducing methane emissions is crucial in mitigating climate change. Bitcoin mining’s high electricity consumption provides a unique opportunity to turn landfill gas into electricity, effectively mitigating methane emissions. This approach can benefit landfills that face obstacles in selling electricity back to the grid, making methane mitigation profitable.

  “Unless we make methane mitigation profitable, the methane mitigation our planet needs won’t happen and our climate efforts will be in vain,” Batten said. “ Bitcoin mining is already the most sustainable-energy powered major global industry, and it’s in a unique position to make methane mitigation profitable for half of the world’s landfills.

It has achieved this in just 14 years, and our research revealed a renewable growth rate of 59% since Q1 2021, and ~383% from 2013. This matters because it can be a “Roger Bannister” to other industries by showing a seemingly impossible speed is in fact possible. pic.twitter.com/LbF7mgKqhl

— Daniel Batten (@DSBatten) May 8, 2022

Batten concludes that Bitcoin mining is potentially a crucial ESG asset that fund managers and investment committees should not overlook.

“Taking all these facts into consideration, my opinion is that Bitcoin is the most important ESG asset of our time — and the fiduciary duty of every ESG fund manager and investment committee to evaluate,” he said.

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