We Give Value To The Worthless

I am currently reading a book by Michael Lewis called Going Infinite: The Rise and Fall of A New Tycoon. A story about Samuel Bankman Fried and his FTX crypto-exchange, it is a fascinating tale of how we humans give value to things that are essentially worthless, while turning our backs on the things that should matter to all of humanity. As you probably know, it does not end well for Bankman-Fried and his too-trusting investors, just as it is not ending well for the rest of us as the world collapses around us.

What is the connection between crypto and climate collapse? The fact is that mining bitcoins (I really can't explain it beyond this) requires tremendous amounts of energy, and as we know, energy-production in most of the world is carbon-intensive. But what is a little terra degradation compared to the possibility of massive profits, eh?

Fortunately, it does matter.to some. The Globe and Mail's editorial board writes about

a power-hungry source with little discernible societal value: so-calling mining for cryptocurrencies.

Provinces such as Quebec, Manitoba and New Brunswick have limited or flat-out said no to crypto. British Columbia has joined them. In late 2022, B.C. paused new grid connections for crypto, facing power requests of greater than two Site C dams (a $16-billion, 1,100-megawatt project). This spring, B.C. passed legislation that allows the government to prohibit such connections.

However, that massive power requirement is only part of something even larger:

Crypto sucks up a lot of power – but so do data centres (think of Netflix and all your pictures in the cloud). Now, think of AI. Data centres and AI make a lot more sense as broadly worthwhile for the economy, but the reality is their power demands are dizzying. At extremes, such as in Ireland, data centres in 2022 consumed almost one-fifth of the country’s power. That’s in part because of companies such as Google. AI will only intensify this. The investment bank Goldman Sachs in May predicted data centres and AI could account for 3.5 per cent of worldwide power usage by 2030, up from about 1.5 per cent today. 

 The list of demands goes on. Turn attention to green hydrogen, a clean fuel, yet its potential power needs are extreme. A proposed $2-billion project in B.C. would require almost all of the Site C dam’s output. This puts the choices governments will have to make in sharp relief. In this case, it seems to make little sense, given competing demands.

Liquefied natural gas is another challenge. B.C. wants to slash emissions from LNG, and the upstart Cedar LNG project will be electrified, requiring power equivalent to about one-sixth of Site C’s output. That’s modest compared with Royal Dutch Shell’s LNG Canada near Kitimat, B.C., whose potential expansion would double the project’s export volume but would also suck up well more than half the power of Site C, along with $3-billion of new transmission.

As Canadians and as citizens of the world, we all have a responsibility for this ever-warming planet, and while there are solutions (solar and wind power are now cheaper than fossil fuels), we seem reluctant to make the expenditures necessary to wean ourselves off traditional sources of power.

That's human nature in a nutshell: shortsighted and self-centred, we care only about the immediate future, not the long-term consequences of our folly.