IMF proposes 85% power tax hike on crypto and AI data centers

The International Monetary Fund (IMF) has projected higher vigor taxes to trim emissions from crypto miners and artificial quality (AI) information centers, according to an Aug. 15 report.

The IMF argues that these sectors devour 2% of the world’s energy and lend astir 1% of planetary emissions. The fiscal regulator claimed that 1 Bitcoin transaction uses the aforesaid energy that an mean idiosyncratic successful Ghana oregon Pakistan would usage successful 3 years.

Additionally, it argues a ChatGPT query consumes 10 times much energy than a Google hunt owed to the energy-intensive quality of AI information centers.

Crypto and AI Energy Use (Source: IMF)

The IMF projects that energy consumption from these sectors successful 3 years could emergence to 3.5%, matching Japan’s existent energy use, which is the fifth-largest successful the world.

Increase vigor taxes

To code this, the IMF recommends a important summation successful energy taxes. It suggests governments enforce an 85% hike successful electricity taxes for crypto miners, equating to $0.047 per kilowatt hr oregon $0.089 erstwhile including aerial contamination costs. This measurement could allegedly make $5.2 cardinal annually and chopped emissions by 100 cardinal tons, astir adjacent to Belgium’s existent emissions.

Similarly, the IMF advises taxing information centers astatine $0.032 per kilowatt hour, rising to $0.052 with aerial contamination costs. This could assistance governments cod $18 cardinal each year. They reason that information centers usage little vigor and often run successful areas with greener electricity and would frankincense look little taxes than crypto miners.

However, the IMF stresses that implementing these taxes would necessitate planetary practice to forestall miners and information centers from moving to regions with cheaper vigor rates.

The IMF besides suggests targeted measures to beforehand energy-efficient practices among crypto miners and data centers. These could see incentives for utilizing much businesslike equipment, adopting little energy-intensive mining methods, and complementing taxes with credits for zero-emission powerfulness agreements oregon renewable vigor certificates.

Shafik Hebous, the lawman part main of the IMF Fiscal Affairs Department, and Nate Vernon-Lin, an economist successful the clime argumentation division, authored the report.

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