Joanie Lemercier, a French artist whose work is deeply tied to climate activism, has been working on steadily decreasing his carbon footprint by 10 percent each year. In an effort to lessen his reliance on international festivals and the planes that inevitably took him to them, he recently began to explore NFTs — non-fungible tokens based on blockchain technology — as a way to exhibit and sell art while staying at home.
But he was concerned, as many artists are, with the environmental cost of blockchains and cryptocurrency. After some quick calculations, he went ahead with it, and his NFT work quickly sold out. Then, he began a hunt to track down more accurate numbers about the carbon footprint of this hugely successful transaction, which sold more than $16,000 worth of art in a single day. Ethereum alone is responsible for 96,200,000 tons of CO2 since its inception; this is equivalent to the combined annual carbon emissions of the 84 least carbon intensive countries around the globe. But how much of that can NFTs be blamed for?
Lemercier reached out to Nifty Gateway, the NFT marketplace that he sold his pieces on, but they couldn’t, or wouldn’t, give him any answers. Then, the artist reached out to Offsetra, a business that connects companies and individuals with carbon offsets. In 2020 Offsetra, launched carbon.fyi, a user-friendly carbon accounting tool for Ethereum addresses. With its background in carbon accounting of the blockchain that NFTs are minted on, Offsetra was soon able to give Lemercier a number. The artist was crushed when he found out just how much carbon his NFT, in an edition of 53, equated to: 80 kilograms of CO2.
After two years of lowering the temperature in his studio, taking trains instead of planes, and other measures, all of his progress had been destroyed — or so he thought. “I was really, really angry because I felt like I did my best,” Lemercier said. “Four or five months after I first asked for some data, [Nifty Gateway] still hasn’t provided anything.”
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Determining the environmental impact of NFTs is a DIY affair. In the absence of formal measures, Lemercier and other artists like Memo Akten have launched their own carbon audits. Based on their findings, when the musician Grimes dropped her NFTs on February 28th, it resulted in 122 tons of carbon, and her open edition of “The Bitcoin Angel” 468 tons.
Yet no peer-reviewed research has been done by academics and the methodology being used by different parties varies widely. There are conceptual questions to answer: Is the footprint associated with minting, bidding on, transferring, and selling an NFT like getting in your car and driving 50 miles, thus producing 50 miles’ worth of emissions? Or is it more like getting on a subway or a plane, which are going to get where they’re going whether or not you step on, and create pollution regardless?
NFTs most likely do not have a direct, causal relationship with CO2 emissions, because they are just making use of the underlying blockchain that Ethereum is already running. To calculate a direct relationship, one would have to calculate if NFTs have caused a shift in demand for the overall Ethereum network — the entire technology that keeps track of all Ethereum transactions. Demand for minting NFTs, as during the recent boom, might raise the price of Ethereum gas — the term for the extra computing power needed to mint — and thus encourage more miners to put more resources into mining, worsening its environmental cost, according to Nic Carter, founder of the crypto-asset venture firm Castle Islands.
“You want to measure the fraction of Ethereum transactions that are NFTs. Then you want to try to evaluate how far out of equilibrium those NFT transactions are pushing the clearing price of gas, which is then providing extra revenue to miners,” Carter said. “Then…