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Ethereum Emissions Are Equal to 2-3 Coal Power Plants

As more attention is paid to decentralized finance, the emissions made by some of its networks are reaching an all-time high. Analysis of the energy consumption and emissions of Ethereum, for instance, estimates that processes behind the digital currency amount to 7.28 megatons of carbon dioxide emitted per year. This is comparable to the same yearly emissions of two to three coal power plants, according to Kyle McDonald, a digital media artist.

The currency, unlike its more popular cousin Bitcoin, relies mostly on a distributed network to validate its transactions. This network is largely composed of individuals running computations on everyday computer hardware called GPUs, which McDonald accounts for in his calculations. This inefficiency is significant when making comparisons to similar tech platforms. Facebook, for instance, handles approximately two billion daily active users on just a third of the electricity (Ethereum uses an estimated 24.7 terawatt hours of electricity per year compared to Facebook’s 7.17 terawatt hours).

In the coming year, Ethereum will begin to phase out its current way of transaction validation and replace it with a more energy-efficient method that’s less reliant on a distributed, inefficient network.

China’s Economic Recovery Wobbles in July

China’s manufacturing fell in July after bouncing back in June, as the country’s economic recovery remains fragile. China’s manufacturing purchasing managers’ index (PMI) fell from 50.2 to 49, according to China’s National Bureau of Statistics. Non-manufacturing PMI, including the construction and service sectors, also slowed to 53.8 from 54.7.

The contraction follows weak demand and continued COVID-19 outbreaks, which are controlled under China’s restrictive “zero-COVID” policy. COVID-19 cases have locked down the city of Xi’an and closed some buildings in the country’s tech hub Shenzhen and the port city of Tianjin, home to major factories.

China’s economy shrank in the second quarter of this year, contracting by 2.6% between April and June following widespread lockdowns earlier in the year. Supply chain disruptions and high commodity prices from the crisis in Ukraine have also contributed to the economic slowdown. China is preparing to miss its previously-stated GDP goal of 5.5%, Chinese state media reported after a meeting of the Communist Party last week.

China and India Account for 70% of Global Coal Demand

Nearly 200 countries pledged to reduce their coal use at the 2021 United Nations Climate Change Conference, but some regions will face greater challenges transitioning from the carbon-intensive fossil fuel to greener energy sources, reports the Financial Times

The Asia-Pacific region depends on coal for almost half of its energy needs, with China and India alone accounting for 70% of global coal demand. As China and India’s economies expand, their power demands will rise — demands not yet being met by renewable energy sources in the region. 

In the U.S., use of coal as an energy source is forecast by the S&P Global Commodity Insights to fall to 12% by 2030. In Europe, the S&P predicts that climate mitigation policies will lead to less than 5% coal use by 2030 (though this may be delayed by Russian gas interruptions leading to greater dependence on coal plants). China’s use of coal is forecast to fall to 51% of power generation by 2030, while it simultaneously drives solar and wind power technology. In India, coal demand is expected to significantly increase by the end of the decade, with no present policies penalizing coal use.

U.S. Fed Hikes Interest Rates By 0.75%

Source: Reuters

The U.S. Federal Reserve has increased interest rates by 0.75% points for the second consecutive time in an effort to check inflation from its four-decade high. The hike raises the Fed’s policy rate to a range of 2.25 to 2.5% from near-zero in March — one of the fastest monetary policy changes in U.S. history. Stocks and bonds rallied after the Fed announced its rate hike on Wednesday.

Inflation is rising around the world, as Russia’s invasion of Ukraine and the pandemic raise the prices of food and energy. In the U.S., inflation hit an annual rate of more than 9% in June. Federal Reserve Chairman Jerome Powell acknowledged that economic growth has slowed as high prices cut into consumer discretionary spending.

The rate hikes come as some experts predict a potential recession. But the Fed doesn’t see an economic downturn on the horizon, in part because employers added 2.7 million jobs in the first half of this year. “I do not think that the U.S. is currently in a recession,” said Powell, adding that too many areas of the economy are doing well.

Europe Braces for Russian Gas Cutoff


Europe is bracing for a significant reduction of its main source of energy from Russia, which is angry at European sanctions. This week, Russia resumed operations for Europe’s main natural gas pipeline, but only at one-fifth of the pipeline’s normal flow.

Several EU countries, notably Germany, the Czech Republic and Slovakia, are highly dependent on Russian gas. In response, EU energy ministers (with the exception of Hungary) agreed to a voluntary 15% reduction in gas usage over this winter. 

The EU spent roughly $105 billion on Russian energy imports last year. The EU’s sanctions against Russia, in response to its invasion of Ukraine, will ban about two-thirds of Russian oil imports.

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