The International Monetary Fund (IMF) has proposed a tax increase on crypto mining and artificial intelligence (AI) data centers. Their reason? To curb emissions and generate additional government revenue.
The IMF argues that “such a levy would raise annual government revenue of $5.2 billion globally and reduce annual emissions by 100 million tons around Belgium’s current emissions.”
The IMF adds importance to electricity in digital finance
Two IMF executives recently asserted that it would be beneficial if the average cost of electricity used for crypto mining increased by 85%. This will reduce emissions by 100 million tons per year and increase global government revenue by $5.2 billion.
Shafik Hebous, deputy division chief of the IMF Fiscal Affairs Department, and Nate Vernon-Lin, an economist in the Climate Policy Division, suggested a $0.047 per kilowatt hour tax.
On Thursday, August 15, the two IMF executives stated that they “would drive the crypto mining industry to curb its emissions in line with global goals.” Both argued that accounting for the local health implications of mining would raise the fee to $0.089 per kilowatt hour.
The IMF executives add that a single Bitcoin transaction consumes the same amount of electricity as an ordinary Pakistani individual does in three years. They also noted that AI models such as ChatGPT require ten times the power of a Google search.
The IMF argued that targeted taxes could encourage crypto miners and AI data centers to use more energy-efficient equipment and techniques. However, it did emphasize the importance of global tax policy coordination to prevent enterprises from moving to lower-standard jurisdictions.
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