by Shafik Hebous and Nate Vernon-Lin at IMF Blog: What do crypto assets and artificial intelligence have in common? Both are power hungry.
Because of the electricity used by high-powered equipment to “mine” crypto assets, one Bitcoin transaction requires roughly the same amount of electricity as the average person in Ghana or Pakistan consumes in three years. ChatGPT queries require 10 times more electricity than a Google search, due to the electricity consumed by AI data centers.
As the Chart of the Week shows, crypto mining and data centers together accounted for 2 percent of world electricity demand in 2022. And that share is likely to climb to 3.5 percent in three years, according to our estimates based on projections from the International Energy Agency. That would be equivalent to current consumption of Japan, the world’s fifth largest electricity user.
The climate impact of these activities—irrespective of their social and economic benefits—is cause for concern. A recent IMF working paper found that crypto mining could generate 0.7 percent of global carbon dioxide emissions by 2027. Extending the analysis to data centers (based on IEA estimates), means their carbon emissions could reach 450 million tons by 2027, or 1.2 percent of the world total.
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