A recently passed bill would enact a two-year moratorium on specific types of cryptocurrency mining in New York and require an environmental impact assessment of mining operations if signed by Governor Kathy Hochul. On the latest episode of Policy Outsider, NYS Assemblymember Anna Kelles, the bill’s sponsor, joins host Alex Morse to discuss what’s in the bill, what the legislature hopes to learn from its proposed impact analysis, and how the bill fits with the Climate Leadership and Community Protection Act (CLCPA), New York’s landmark climate and environment legislation.
Guest
Honorable Anna Kelles, New York State Assemblymember
Points of Conversation
03:02 – Blockchain Basics and Cryptocurrency Validation: Proof-of-Stake vs. Proof-of-Work
13:43 – Understanding Decentralized Financing
16:51 – Pause for Examination: How Cryptocurrency Mining Operates and its Potential Impacts
26:17 – The Fracking Playbook
30:54 – How Cryptocurrency Mining Relates to the Climate Leadership and Community Protection Act
38:00 – How Recent Environmental Policy Decisions Affect Future Policymaking
Transcript was generated using AI software and may contain errors.
Assemblymember Anna Kelles 00:00
I think the thing that’s really important to note is that these are really complicated concepts. And so these are very long-winded answers to your questions, and they’re windy and tangential sometimes. But I think what it shows is that it’s all interrelated. Financial justice, environmental justice, social justice, access to wealth, environmental impacts, the use of natural resources, natural resource diversion, they’re all interrelated in this one industry. And I think that that in and of itself is a fascinating story.
Alexander Morse 00:37
That was New York State Assemblymember Anna Kelles who joins the podcast to discuss her recent legislation that would enact a two year moratorium on proof-of-work cryptocurrency mining, a specific type of currency validation, in an attempt to learn what possible impacts mining can have on New York’s public health, natural resources, energy usage, the economy, and more. This is Policy Outsider presented by the Rockefeller Institute of Government. I’m Alex Morse. Stay tuned to learn more about what’s in this legislation, get a breakdown of what cryptocurrency and cryptocurrency mining is, and what inspired the state legislature to closely examine this burgeoning financial industry. Coming up next. Today, I’m joined by the honorable Assemblymember Anna Kelles from the 125th district of New York State. Assemblymember, thank you for joining us today.
Assemblymember Anna Kelles 01:50
Absolutely. Thank you for having me.
Alexander Morse 01:52
There’s been a lot in the climate and environment news over the last several weeks, beginning with your legislation that would establish a two year moratorium on certain cryptocurrency mining operations in New York, which passed the state legislature recently and now awaits a decision from the governor. Then on June 30th, the State Department of Environmental Conservation denied an air permit for the renewal for the Greenidge Generation facility, a crypto mining company located in the Finger Lakes. And then a day later, the United States Supreme Court announced its decision in the West Virginia v. EPA case, which limits the EPAs ability to set emission standards. All to say, it’s been a very busy couple of weeks in the environmental space. And so while we have you here on the podcast, I’d like to talk to you about how your legislation and these key decisions relate to and maybe impact each other, and what it may mean for the climate and environmental policy as we move forward. Let’s start with your legislation and crypto mining. Can you help us break down what cryptocurrency is in a broad sense, what crypto mining is, what folks might only a little familiar with?
Assemblymember Anna Kelles 03:05
So I think that is the right first question because cryptocurrency seems so a amorphous, understandably, to a lot of people. And it’s a very new technology. I’m going to break it down even further, I’m going to start with blockchain technology, if you will. Blockchain technology is actually a very innovative new way of transferring information in the digital space. The way that we have always transferred information has been through some overarching entity or third party entity when we’re trying to share or exchange information from one person to another, one entity to another. So think of Google. Google is a platform that we all use, we can do information sharing, but Google maintains ownership of that platform, ownership of that data. The idea of blockchain technology is the transfer of information both instantaneously and transparently. How does it do it? It is because it is a system that is decentralized in the mechanism of transferring information. So the information exists all around the world. You could exchange education data, engineering data, architectural data, the point of exchange happens at the point in which the data is maintained and transferred. Those are what we call blocks. So you have a block of of information. In that block, you could have that information transferring from one entity to another entity. All that information exists in this black box. But you have to be able to identify it, if you’ve got an entire universe of exchanging information, then each block, each exchange, each interaction, each change of information needs to be discrete, unique, identifiable as a discrete block. So each block is given what I like to sometimes refer to as the digital version of a VIN number for a car. If you have a a Toyota Camry that’s blue in 1993. And I have one too and they’re sitting next to each other. And you can’t see inside, the only way that you could distinguish would be the VIN number that says everything you need to know about the history and distinguishing the two cars. A block has a VIN number, it has a hash. And if anything in that block changes then it is a new block and it gets a new hash. There is a piece of that new hash that has a code that is a code that identifies the previous block that it came from. And that is what creates a blockchain. Those blocks and those interactions are recorded on a ledger. That’s what makes the movement of information through a universe of a blockchain transparent because all of those blocks are recorded and publicly accessible. It’s instantaneous because it’s happening at the point of where that information exists. So that’s the first step that I think is really important. The thing that people don’t necessarily instantly understand is the difference between when people say cryptocurrencies and cryptocurrency mining, so I’m gonna step to what is actually the distinction between those. Cryptocurrencies, there are thousands of them, they’re all built on blockchain technology. They are digital currencies that can be bought and sold, and those transactions happen in a block. Blockchains, they are actually bundled. So a block has many transactions that are happening. But exchanging money is something that should be secured, we don’t want to actually have money transferring back and forth of value, storage of wealth, or even a medium of exchange, that it doesn’t have any form of security because then it wouldn’t have any value and no one would really invest in it. So there have been mechanisms established in cryptocurrencies to validate the blocks. You have the hash, that is one thing that identifies the blocks, but then you also have layered on top of it are validation methods. There are about 16 different methods that have been established by engineers to validate transactions. And so when I say engineers, I mean, the engineers that are designing the cryptocurrencies and every cryptocurrency has embedded in its engineering design and incorporating into it a method of validation, whichever one they choose. Most of them are passive, meaning that the system itself chooses the validator. So I’m going to step back for a second, in a fiat currency, what does it mean, it’s a government currency, which means that it’s government regulated. Government oversees it. We have the National Reserve and they can put money into circulation, they can take money out of circulation, they can investigate fraud, they can track movement of money through the system. We have banks that typically work in a context where they’re sort of administering the currency in a way. But there is this third party standing outside that is controlling and managing that currency. Cryptocurrencies, because they’re built on decentralized systems, that’s the beauty because they can be exchanged so quickly and permanently and transparently, they have no overarching entity that is managing it. If you’re creating a system of validations, where transactions need to be validated, who’s going to validate them then? It has to be the users within the system itself. So when I say users are selected to validate, I mean, the actual users within the system of the currency. If you’re invested in Iota and you choose to be a validator, you don’t want to just buy and sell just be a user, you’ve identified yourself as a validator. What you’re doing in a proof of stake model is you’re saying I’m willing to put my currency up for stake. And depending on how much you have in your wallet will determine it’s a weighted random selection. That is proof of stake whether or not your wallet or your account will be selected to validate a transaction. So the system selects the validator, not you as the user. Because it is passive in that way, it doesn’t use that much energy. And it is a form of validating transactions where users are selected to validate the blocks. Once a block is validated, it goes up on the ledger. And those are then permanent and visible, and everybody can see them the most where all the transactions are happening. There’s one form of validation that is competitive in nature. Directly competitive, meaning that users can choose to compete to validate transactions and whoever wins, validates the transaction and earns currency for their effort. In a proof-of-stake model, you’re selected by the system. If you’re selected, you can win currency for being a validator. In a proof-of-work model, you directly compete with other users. And if you win, then you earn currency and you validate the transactions. That’s how the two are different. So how do you win currency? How do you win to validate a transaction? In a proof-of-work model, every single block is given what they call a mathematical equation, which it’s not a mathematical equation per se, it’s actually a random series of digits. And that’s really important. But you are trying to solve that mathematical equation before someone else. If you solve it before them, then you validate the block and you win currency for your effort. So people are competing with each other. But here’s the trick. If the equation is a random series of numbers, then there is literally no software that you can create that would give you an advantage over me to solve that equation faster than me because it’s random. The only way that you could get an advantage is by having more computational power. If you have three computers running, and I only have one computer running, and they’re all randomly crunching numbers, then you’re three times more likely to get to that random series of digits faster than I am. So that is what has led to the massive amounts of use of energy of proof-of-work validation, which is synonymous with cryptocurrency mining. So not all validation methods are mining. Proof of work is the form of validating cryptocurrencies that is mining. And that is the focus of my legislation, which is to address the fact that cryptocurrency mining is incredibly energy intensive compared to the other forms of validation and potentially very harmful to the environment.
Alexander Morse 12:19
Okay, so just so I have this straight, it’s the proof-of-work concept that is synonymous with mining. And that’s what’s requiring the high computational power, which we’ll get into what that kind of means from an environmental aspect, versus the proof-of-stake, which was a person power form of creating a blockchain.
Assemblymember Anna Kelles 12:42
That’s the difference, one’s passive, one’s active competition. And the only way you can win in the active competition is using computational power. Think of it as digital mining, again, for gold in the digital world. There’s no competing in proof-of-stake. And I only use proof-of-stake as one example, there are many other forms of validation. That’s the second most common. So just to give you an example, Etherium is the, I think, second largest cryptocurrency. It uses proof-of-work. Since its inception, it has committed to eventually converting to proof-of-stake. They have estimated that they will reduce their total global energy consumption by up to 99.95 percent, almost 100 percent reduction in their energy means.
Alexander Morse 13:31
That’s incredibly significant. What does that do to affect their ability to… is generate currency, the right terminology?
Assemblymember Anna Kelles 13:43
Well, so that’s also a really great question. So I mentioned something earlier, which is that in a fiat currency, governments decide how much money is in circulation. They can put money into circulation. They can take money out of circulation. Why would they ever take money out of circulation? One of the big reasons is because they are trying to control the value of the currency. Simple supply and demand, if you have a significant amount of currency compared to demand, it destabilizes the currency. You can take money out of circulation, you can stabilize it. So if you have a system that doesn’t have an overarching manager, how do you control the relationship of supply and demand? You would attach the new money entering into circulation to the activity inside the system. The more activity happening, the more money is flowing into circulation. So what’s the one way to do it? Attach the entering of money into circulation with the validation of transactions, the more and more transactions that are happening. And that is a also a simplification because they can they bundle transactions within a block. You can always add more. And that is a big debate within the cryptocurrency world as to how many transactions do we bundle in a block. But still activity is associated with movements or the flow of money into circulation. That is why they’ve set it up so that validators win currency for validating transactions. So that’s how money is flowing into circulation. You could choose to not be a validator. Tomorrow, you could open five wallets in five different cryptocurrencies on some digital exchange. There’s Wall Street and there are an equivalent in the digital cryptocurrency arena that are digital exchanges, like Coinbase, for example, is one of them. You could enter onto one of these digital exchanges, open a wallet, and buy and sell cryptocurrencies and never ever be a validator ever in your life. You’re fine with paying the fees of investing and buying and selling. You don’t care about those, you’re just interested in investing, you could do that. Or you could also choose to be a validator. Validators are the ones who win the new currency coming into circulation. Investors on the digital exchanges, they make money by winning, buying, selling, and whether or not those are increasing in value. So there’s those two different parallel tracks happening at the same time. Does that make sense?
Alexander Morse 16:26
That does. I appreciate you simplifying it for me, because I’m grateful for that, I could use all the simplification I could get because every time I try to wrap my head around what’s going on in the cryptocurrency world, it’s moving too fast at too quick a pace for me to actually sink my teeth into it. So I’m glad we have you here to help break it down.
Assemblymember Anna Kelles 16:47
I think it’s important to note that these are simplifications, but you have to start somewhere.
Alexander Morse 16:50
Sure.
Assemblymember Anna Kelles 16:51
That’s really important.
Alexander Morse 16:52
And I think that’s what’s valuable about having this conversation now is that a lot of our audience might be interested in what cryptocurrency is and cryptocurrency mining, but not be so well versed and might not have the time to really do a deep dive research. And so they might just ask these surface level questions of why should I care? Why is this important? And part of why it’s important is because it is kind of a frontier currency. We don’t quite have the full grasp of its financial implications, as we’ve noticed with the volatility over the cryptocurrency market over the last year and plus. The environmental implications of what it means to do the mining, and we’ll do a deep dive on that in a little bit. It seems to me that this is a conversation that you’re very invested in. And so I would like to talk to about your legislation, and what’s in the legislation, and where you sourced your inspiration from? How did you get to this point to be writing this bill and rallying to get it passed in the legislature?
Assemblymember Anna Kelles 17:58
So I’ll talk first about what the bill is and then walk it back. The bill specifically focuses on creating a two year moratorium on the use of fossil fuel-based power plants for cryptocurrency mining. It’s very, very specific. First of all, why am I focusing on power plants? One, because they are regulated. They require air permits from our DEC. It created a mechanism for me to incorporate them because we already do regulate them as a state, but two, because we have about 30 retired power plants in upstate New York alone, another 19 in downstate, so that’s almost 50 retired power plants in New York State. The reason that they’re retired is because technology has been improving on the production of energy in power plants over the last decades. Which means that the the power plants that are built on the old technology can’t compete on the market. That is one of the main reasons why we have these retired power plants. Another reason, of course, is legislation because we’ve been pushing for improvements in efficiency. We’ve been pushing for improvements in reduction in greenhouse gases. All of those have led to these retirements. And it’s really important that they stay retired because we’re trying to move off of fossil fuels. And we’re trying to reduce our greenhouse gases as a state. In fact, we of course, in 2018, passed the Climate Leadership and Community Protection Act, one of the most ambitious climate laws in the country. It drafts a roadmap for us to get off of fossil fuels completely. So turning these fossil fuel-based power plants back on sends us in completely the wrong direction. So that was one of the fundamental inspirations for this bill. Another being that we were seeing a trend starting, first started by Greenwich, which is a company that purchased a power plant and turned it back on with the original intention of producing energy for the grid. When they launched in 2019, of course, they had, in addition to their facility, a small operation of cryptocurrency mining. The upshot of that was, well, we’ll sell energy to the grid, when it is economically viable for us to do that. We’re making a profit. And when we will not make a profit doing that, we’ll just continue to produce that energy so that we’re never going down. We’re never dormant. And we’ll just absorb that energy inhouse behind the meter, as we call it, and use that energy ourselves to run our own side business, which was this cryptocurrency mining operation that they could then also make money out of. They created a subsidiary so that it was technically a separate business. So that was the first power plant. And the reason of course, being that if you’re running a cryptocurrency mining operation, the greatest expense for a cryptocurrency mining operation is the energy. So if you’re going to maximize your profits, the best way to do that is minimize your energy costs. Well, one of the best ways to do that is just make your own energy then you don’t have to pay any fees. You don’t have to pay companies for the transmission, you’re just making it and using it in house. That followed with a company called Digihost that started the process of purchasing a power plant in North Tonawanda, which is just outside of Buffalo to follow suit and do the same. That was the start of a trend. That raised the red flags. Because these companies have the ability, because they’re so wealthy to begin with, to consolidate mining rigs way above and beyond what the boutique miners, which was the primary identity of miners previous to this sort of trend of monopolization of cryptocurrency mining, these big companies can afford to buy their own power plant, which means they can afford to use all of that energy that’s produced by a power plant. Unlike previous generations of boutique miners that would have five maybe 10 computers in their basement or 100 computers in a warehouse. Those were much smaller, couldn’t even produce the demand great enough to need a power plant. So already, with this shift, you’re seeing these behemoths coming into the market of miners that are using a tremendous amount of energy and buying these power plants to produce it. Of course, then they’re using natural resources locally and they are producing profits. And none of them actually are housed in New York State. Greenwich is housed in New Jersey, Digihost is housed Canada, that’s where their their headquarters are. So these are companies buying power plants in New York and using a huge amount of energy. Producing a huge amount of greenhouse gases, making a massive amount of profit that is either for a private company that goes to their headquarters and their owners or is a company that converted to be publicly traded like Greenwich. All those profits go to their dividend holders, which are anywhere in the world. But the negative impact is New York State. But it is a new movement, which was the inspiration of this moratorium, which said, whoa, whoa, whoa, whoa, here’s this new industry, you recognize it’s now there are other countries that have just outright banned it at this point. There’s like eight or 10, 12. I think there’s more than 10 at this point that recognized that it was having a huge negative impact on their environment. It was also causing brownouts and blackouts because of just the magnitude of energy that it was consuming and outright banned in the countries. I am taking a much more modest approach in New York and saying, “Okay, we recognize that we don’t have the data in New York of what the impact is going to be. Let’s establish a moratorium. And let’s require our scientists in New York State to do a full generic environmental impact statement during that two year period and collect the data of what the impact of this industry is on our ability to reach our environmental goals with respect to greenhouse gas emissions, water quality, and air quality.” And I will end that answer by saying the inspiration for this was late at night, being super concerned, seeing a new industry using huge amounts of energy, producing huge amounts of pollution, sound pollution, air pollution, water pollution, very, very quickly, without us having a grasp of it yet. And it reminded me of the antifracking movement. And I thought about that process, which was, here’s a new industry, we don’t know what the impact is going to be, let’s put a pause, let’s create a moratorium, let’s study this issue with our scientists, and then have them give us feedback by a draft report that is required to be presented to the public. The public is allowed to give their feedback, including all the scientists, and then we will do a final deliberation on what it means. And then the legislators can use that data to craft important regulations moving forward and legislation moving forward. But based on science and data. That’s the foundation of this piece of legislation.
Alexander Morse 26:17
I’m glad you mentioned fracking because when I was reading your bill, that’s kind of what came to mind. I believe that was 2011. Maybe I have to look that up. But it was similar. It was a moratorium on fracking, it was wanting to make sure that we could understand some of the implications–the environmental, the financial, the public health. However, during that campaign, there was a lot of advocates for fracking. Some of the arguments there were, it’s just going to get displaced. It’s just going to happen in Pennsylvania. The jobs, the money, it’s just going to move elsewhere. And I would imagine that some of the opposition to your legislation may have used some of similar arguments. Who were those folks who opposed the legislation? What groups or industries? What were some of their arguments that might go beyond what we heard 10 plus years ago with the fracking movement?
Assemblymember Anna Kelles 27:14
Well, honestly, first of all, some of the people are the same people because cryptocurrency mining has become so consolidated and a lot of it is publicly traded. There are a lot of oil and gas industry people who have invested. So there is actually starting to be overlap. That is, I think, really important to note. But the strategies that are being used are very similar. It’s actually very similar arguments that are being used. I think there must be somewhere out there in the ether a playbook of how similar it is. But I think that this is fundamentally different for one significant reason, which is in the cryptocurrency world, the cryptocurrency mining industry isn’t where the job explosion is happening in cryptocurrencies. So for example, just as a comparison, you look at Greenwich facility, they have now upwards of 30,000 computers, they employ about 48 people. If you look at the other big industry in that area, it’s the agritourism industry. The agritourism industry employs over 60,000 people and is about a $3 billion industry. And that industry is directly negatively impacted by the Greenwich facility because of the sound pollution, air pollution, and water pollution for many reasons. Because the increases in temperature of water directly creates a risk factor for harmful algal blooms and that negatively impacts tourism. You have the sound pollution that carries incredibly efficiently across the lake because there’s no barriers whatsoever. And you have all of the wineries and the tasting rooms literally packed all along the water across from the facility. Not to mention the New York State I Love New York tourism center that is in Geneva, which is right at the end of the lake right next to the Greenwich facility. So you can see the smokestacks literally from the balcony of that tourism center. Just as examples. So you have to look at the comparison. When they say jobs lost, well, what is the net job impact? What’s the net job impact? So you have these few jobs, but how many jobs do you risk losing? How many jobs do you lose? Now the people that I’m hearing from are the winemakers, the wineries, the fishermen, the hunters. Those are some of the people that I’m hearing from because of the negative impact on the ecosystems where they’re hunting and fishing, or the wineries that are experiencing complaints and concerns because of the constant noise that they’re hearing, or people wanting to go to Seneca Lake to do boating. Now they’ll go to a different lake. How many lakes in the Finger Lakes? If it becomes too industrial then that’s not attractive for tourism and that brings huge amounts of money to local businesses. You have to think about the restaurants, the hotels, the hostels, there is a long impact that you do need to think about. So it has to be taken into context. The cryptocurrency mining itself but also the misleading representation of cryptocurrency mining being where all the jobs in the cryptocurrency world are.
Alexander Morse 30:55
And so sticking with your legislation a little bit, focusing on the environmental impact, what are some of the things that you want to be able to gather over this two year moratorium if it’s enacted?
Assemblymember Anna Kelles 31:07
Well, one of the things I’m going to step back for a second, because I think that this is very, very important. And I would hope that this is some of the information that will be collected. Where are these power plants, a significant number of them are in environmental justice communities. What is the impact going to be on marginalized populations that more likely live in those environmental justice communities? Once again, it seems from what we’ve seen so far, and I would like to see the data, benefit the few while harming the many that are the most marginalized. Power plants in the first place, they are very often put in low-income neighborhoods, which tend to be more often black and brown neighborhoods because wealthy people don’t want them in their neighborhoods. But they’re also the ones that are most likely to use a lion’s share of the energy. So they get the greatest benefit, They don’t have to deal with the cost directly in their neighborhoods. That is the fundamental definition of being an environmental justice community. They’re buying up these retired power plants, they’re having a direct impact exactly on those environmental justice communities. But here’s the other thing, who has the money to buy a power plant in the first place? When you look at cryptocurrency miners, Bitcoin, for example, one of the main proof-of-work based cryptocurrencies, did not have the value that it does. That a majority of miners were these sort of boutique miners, which meant that mining was more accessible, that you could both pay your increased electric bill and you could still make a profit. But in the process of the value increasing, it began to attract wealthier and wealthier people to invest in cryptocurrency mining. And they had the ability to consolidate a significantly greater number of computer processors so that they could get the edge because they had the money to start with. And not only more processors, but the highest tech, fastest processors completely out-competing these boutique miners that were more diverse by nature. So it has ultimately led to a tremendous consolidation of both the mining activity as well as the currencies themselves. So Bitcoin, for example, .01 percent of the wallets on 27 percent of the currency. And a significant number of those .01 percents are the same .01 percent of the wealthiest people in the United States. Same, same, same same, which is why those articles came out recently said that in these crashes, who was it that got negatively affected? Who was it that lost their shirts? They were the small investors, the small miners, the defi workers, not the owners. The wealthy people in those systems came away relatively unscathed. Just like we see in in every existing traditional currency, the wealthy stay wealthy, the poor get poorer, particularly when you’re investing in a risky investment, which these are right now as you’ve seen by the fluctuations in value. What I really want to explore is, what is the impact on environmental justice communities? What is the equity impact? What is the true equity impact environmentally speaking? The CLCPA, the Climate Leadership and Community Protection Act, has a huge component of it recognizing that marginalized populations have been the most impacted. And in this context, what we’re seeing is they’re being the most impacted environmentally and financially. The argument that cryptocurrencies create equity and wealth, in theory, yes, because you don’t need a bank account to invest in it. But in reality, it’s one of the most consolidated currencies. Now on top of it because it’s these incredibly wealthy people that have gotten into the market, they’re the ones who have enough money to buy power plants, which happened to be in those same marginalized neighborhoods. So the finances have been stripped away from the from creating equity to start with and we’re seeing that now the wealthiest people who can afford to buy a power plant are now doubling on the negative impact with the environmental impact. The moratorium is set in place to say, okay, then what is that environmental impact to environmental justice communities? What is the impact on our energy consumption as a state? What is our impact on our dependency on fossil fuels? What is our impact on how much greenhouse gases will we be emitting as a state? What is the impact on some of the last freshwater bodies that we have in the entire world? New York State has some of the last fresh groundwater unfrozen freshwater on the planet? Is this how we want to use our natural resource? Those are the questions that we need to answer. Will we be able to reach our Climate Leadership and Community Protection Act with this industry unregulated? And when I say industry, I mean cryptocurrency mining specifically. I think the thing that’s really important to note is that these are really complicated concepts. So these are very long-winded answers to your questions, and they’re windy and tangential sometimes. But I think what it shows is that it’s all interrelated. Financial justice, environmental justice, social justice, access to wealth, environmental impacts, the use of natural resources, natural resource diversion, they’re all interrelated in this one industry. And I think that that in and of itself is a fascinating story.
Alexander Morse 37:18
You’re certainly right. It is amazing how intricate policy is. It’s never just one field. It’s never one sector. It’s never one person who’s affected. We all are entwined in it in some form or another. And so it appears that your legislation is aimed to figure out those concerns, what they are, do the cost benefit analysis, if you will, and how that could be used for evidence based policies moving forward.
Assemblymember Anna Kelles 37:48
Exactly. Recognizing that our environmental laws are laws. They have been established in statute. So the question is, can we meet those goals that have been established into law?
Alexander Morse 38:01
And so as we record, it’s the first week of July. The legislation is not yet signed by the governor. So it’s not yet a law. So mining operations, proof-of-work mining operations can continue in New York State. What are your next steps? What’s your agenda to get this law across the finish line? How do recent decisions with the DEC and the Greenidge air permit denial, and maybe even how the Supreme Court West Virginia v. EPA influencing what your next steps might be?
Assemblymember Anna Kelles 38:34
I think that just to answer that last, the SCOTUS decision has said, it’s up to the states, it’s up to the states to regulate. I think that’s what makes this piece of legislation even that much more important, because we recognize these overtired power plants coming back online would send us absolutely 100 percent in the wrong direction, which the governor has very recently even noted. She specifically said she recognizes the environmental implications of turning back on power plants and she has no interest in supporting the practice of turning them back on. I think that that was a very important statement, first of all, and to shift to the other part of your question, the steps that we’re taking our education. Helping people understand one, why this is so important, and two, what the legislation actually does. And equally important, three, what the legislation doesn’t do because there is so much misinformation, intentional misinformation being spread, exaggerating what the impact would be and intentionally trying to stir up fear. Part of the work that myself and advocates are doing is to try to counter that intentional misinformation. And of course, there’s one thing that I can’t directly impact, which is straight up investments that cryptocurrency mining companies and cryptocurrency companies, and individuals who are very wealthy in this arena, are investing in campaigns. That’s not something that I can impact directly. But it’s certainly something that we can bring light to. Because I think that it’s really important for people to understand the impact that campaign investments are having on people’s decisions.
Alexander Morse 40:34
Assemblymember Anna Kelles, thank you for joining us today. We really appreciate your time. I just want to let you have the floor for anything you want to part with.
Assemblymember Anna Kelles 40:43
I would say, I have every expectation that the governor will sign this given the DEC decision that was really important, given the position that this Supreme Court has put us in, given comments that have been made about the interests of turning fossil fuel-based power plants back online. It’s really important that it happens sooner rather than later because the bill cannot be retroactive. So any facility that is up and running is not impacted by this piece of legislation. One of the things that I’ve been hearing from people is this will prevent any mining throughout the entire state. But it’s important for people to understand this will not impact any mining that is based on renewable energy, it will not impact any mining that is based on energy used directly from the grid. This is a bill that will prevent the very wealthy, very small percent of the cryptocurrency mining corporations from purchasing these defunct old, inefficient power plants in our state and turning them back on for their personal gain. I think that it could actually stimulate or be part of stimulating innovation in industry. Ways of validating currencies and transactions that do not need this amount of energy. I think it should be looked at as an innovator stimulator. It could be that if we are courageous enough to see it that way and we believe in our ingenuity. I certainly do. I would hope that we could progress with creativity without needing to destroy our planet in the process. One last thing that I will say, and this you didn’t ask for directly, but one of the things that I hear is cryptocurrency mining can be part of the climate solution, because we use so much energy, that if you incentivize us and put us near renewable energy infrastructure, then we will use excess energy and increase the rate of return in your investment so that you can then take that money and reinvest it in more renewable energy infrastructure, which will speed up the transition off of fossil fuels. There are so many reasons why this is insane logic. Because if the total base load on the grid is increased by this added energy demand, even if sometimes they go offline and therefore they’re not pulling from the grid, they’re not creating any new electrons to add to the grid, they are an energy consumer. That’s really important. So it increases our total energy load. And secondly, if it’s increasing our total energy demand as a state, then it will increase the total amount of renewable energy infrastructure that we will need in order to get the entire state off of fossil fuels. Here’s the last kicker is that there are only certain places in the state that have sufficient wind speeds and topography appropriate for industrial wind farms, which means we have a limited physical space appropriate for wind farms, meaning it’s finite. And secondly, we have a limited space where we can put solar and one of the best places to put solar is on farmland. Which means that solar installations are directly competing with our ability to make food for our animals and for ourselves as humans. So it is also finite because as climate change continues, we’re going to see the northeast and New York be more and more and more the breadbasket of the state and of the country, the Finger Lakes being for the state and the state being for the country. So to put an increased demand on our need to build solar energy infrastructure directly competes with our ability to feed ourselves. So I do not see cryptocurrency mining as part of a climate solution
Alexander Morse 45:18
Thank you again to Assemblymember Anna Kelles for joining the podcast to talk about her legislation examining proof-of-work cryptocurrency mining. If you’re interested in learning more about the bill and what it sets out to accomplish, you can search on the New York State Assembly’s website by searching bill number A7389C. If you liked this episode, please rate, subscribe, and share. It will help others find the podcast and help us deliver the latest in public policy research. All of our episodes are available for free wherever you stream your podcasts. Special thanks to Rockefeller Institute staff Joel Tirado, Heather Trela, Laura Rabinow, and Laura Schultz for their contributions to this episode. Thanks for listening. I’m Alex Morse. Until next time.
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