Rising Carbon Costs: IMF Targets Crypto and AI with New Levy Recommendations

The International Monetary Fund (IMF) released a report titled “Carbon Emissions from AI and Crypto Are Surging and Tax Policy Can Help.” The report calls for a significant increase in electricity taxes for crypto miners and AI data centers.

The International Monetary Fund (IMF) has called for a significant increase in electricity taxes for crypto miners and AI data centers to incentivize more sustainable practices.

In its report, the IMF recommends a tax of $0.047 per kilowatt hour for the crypto mining industry and a slightly reduced tax of $0.032 per kilowatt-hour for AI data centers.

The IMF argues that this would help align these industries with global carbon reduction goals. Together, crypto mining and AI data centers accounted for 2% of global electricity demand in 2022, which is projected to rise to 3.5% by 2025.

However, industry leaders have responded with sharp criticism, accusing the IMF of presenting a misleading and poorly researched analysis. They claim that the report fails to distinguish between AI data centers and crypto mining operations, which differ in their energy consumption patterns and environmental impacts.

Additionally, they argue that the IMF overlooks the potential sustainability benefits of crypto mining when managed responsibly, such as its ability to utilize stranded or excess energy and contribute to renewable energy development in remote areas.

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