How Climate Taxes on Crypto and AI Could Raise Billions for the Planet

The rise of digital technologies like cryptocurrency mining and artificial intelligence (AI) has brought innovation—but also massive energy use. As these industries grow, their carbon footprints are becoming impossible to ignore.

Now, global policymakers, including the IMF and the Global Solidarity Levies Task Force, are exploring a new idea: climate taxes on crypto and AI. These targeted taxes could both cut emissions and raise billions of dollars to fight climate change.

Let’s break down how these taxes work, what they could achieve, and what challenges lie ahead.

The Rising Energy Footprint of Digital Technologies:

• Crypto mining alone uses enormous amounts of electricity, so much so that one Bitcoin transaction is said to use as much power as a person’s three years in Ghana or Pakistan.
• Together with AI data centers, they currently account for about 2% of global electricity consumption and nearly 1% of global carbon emissions; by 2027, this percentage is expected to rise to 3.5%, or the amount of electricity used in Japan.By 2027, this could rise to 3.5%—roughly equal to the entire electricity consumption of Japan.

• By 2027, this could rise to 3.5%—roughly equal to the entire electricity consumption of Japan.

• Generative AI systems such as ChatGPT and image generators are major drivers of this growth. Training or running these large AI models requires powerful GPUs that consume about 10× more electricity than a Google search

IMF Proposals: Targeted Energy Use Taxes

In August 2024, the International Monetary Fund (IMF) proposed targeted taxes on electricity use by crypto and AI industries. The goal? Reduce emissions and generate funding for global climate programs.

 

Sector	Proposed Tax Rate	Estimated Revenue (Annually)	Estimated Emissions Reduction
Crypto/mining electricity	~$0.047/kWh (or $0.089 with air pollution cost)	$5.2 billion	~100 million tons (≈ emissions of Belgium)
AI data center electricity	~$0.032/kWh (or $0.052 including pollution)	$18 billion	Encourages efficiency, lower footprint

 

These taxes would raise crypto miners’ electricity costs by roughly 85%, nudging them toward cleaner or more efficient systems. For AI firms, such taxes could promote energy-optimized data centers or a switch to renewable sources.

Global Solidarity Levies & Broader Coalition:

The Global Solidarity Levies Task Force, which is co-led by France, Kenya, and Barbados, is creating a portfolio of creative “solidarity levies” on high-emission and under-taxed sectors in parallel with the IMF’s fiscal strategy.

Key proposals include:

• Crypto‐energy levy :~$0.045 per kWh levy, producing ~$5.2 billion annually.

• AI/data center energy levy: as part of larger research on tech taxes (specific AI levies are still being studied).

• Financial transactions tax: Up to $418 billion could be raised annually worldwide by 0.1% on stock and bond trades.

• Plastics production and billionaire wealth taxes, yielding tens to hundreds of billions more.

 

These levies aim to close the global climate-finance gap—estimated at hundreds of billions of dollars each year — especially for developing countries struggling with clean-energy investments and climate adaptation.

Why These Taxes Matter:

Bridging the Climate-Finance Gap

• By 2030, governments are expected to require $6.7 trillion annually to support development and climate goals, with developing countries alone requiring roughly $2.3 trillion annually.

• There are calls for creative, equitable, and scalable financing methods like solidarity levies because the current public contributions are so inadequate.

Encouraging Greener Innovation:

Such taxes could drive crypto and AI companies to:

• Shift to renewable-powered data centers

• Develop energy-efficient algorithms

• Locate servers in low-carbon regions

By combining revenue generation with behavioral change, climate taxes represent a smart path toward responsible digital growth.

Potential Benefits & Policy Considerations:

Large revenue pipelines: Without causing financial market instability, even modest energy-use taxes could raise billions of dollars and cut emissions.

Changes in behavior: Taxes increase the cost of energy-intensive operations, which promotes a shift to more environmentally friendly methods.

Equity and justice: Tech behemoths and affluent users, whose actions contribute disproportionately to climate change, start to support international efforts to mitigate and adapt.

2025 Milestones & New Evidence

Since July 2025, new research and global policy movements have reshaped the conversation.

1. AI’s Energy Use Now Rivals Bitcoin:

According to a Verge analysis from mid-2025, AI is currently using almost as much power as Bitcoin mining and could surpass it by the end of the year. AI’s carbon footprint is growing more quickly than anticipated due to the development of large language models and image generation.

2. Laurence Tubiana Calls for AI & Crypto Taxes

The head of the Global Solidarity Levies Task Force, Laurence Tubiana, reiterated in July 2025 that taxing cryptocurrency and artificial intelligence is crucial to achieving the climate goals set forth in the Paris Agreement. She underlined that global sustainability funds require “fair contributions from digital powerhouses.”

3. Visual AI’s Hidden Carbon Cost

According to a 2025 study on diffusion-based visual AI, the energy consumption of GPU training and rendering alone can result in several tons of CO₂ emissions when one million AI-generated images are produced.

4. US Policy Updates

In the midst of ongoing discussions about regulating AI emissions, the United States unveiled a new crypto tax framework in the middle of 2025. If untaxed, experts predict that unchecked AI growth could emit 1 billion tons of CO₂ by 2035.

5. Bitcoin Mining in 2025

New data shows Bitcoin mining emitted 98 million metric tons of CO₂ in 2025, though renewable power use among miners has now crossed 50% globally — a sign that financial pressure is slowly driving cleaner operations.

Challenges & Global Coordination:

Relocating facilities to low-tax jurisdictions can help companies prevent carbon leaks.

Relocation risks: Mining or AI firms might shift to low-tax jurisdictions.

Tracking issues: It’s hard to measure energy usage precisely across shared cloud systems.

Political resistance: Major tech economies fear stifling innovation.

Global cooperation: Without international coordination, taxes could distort competition and markets.

Looking Ahead to COP30:

Final proposals and international commitments are anticipated as COP30, which will take place in Belém, Brazil, in November 2025, draws near. In accordance with the IMF-World Bank spring meetings, the Task Force intends to publish comprehensive impact assessments and draft levy designs by April 2025 . Proponents like Laurence Tubiana contend that these taxes are necessary to fairly meet climate finance goals and have the potential to completely change the way energy-intensive technologies are taxed and regulated around the world.

AI and cryptocurrency climate taxes are becoming more than just policy concepts; they are a topic of serious discussion on a global scale. If properly executed, they have the potential to create billions of dollars every year, hasten the transition to cleaner energy, and establish new benchmarks for digital responsibility.

The world stands at a crossroads: technology can either deepen the climate crisis or help fund its solution. Through innovative taxation and global cooperation, we have a chance to make digital progress truly sustainable.

FAQS

Q1. What are climate taxes on crypto and AI?

Ans. The goal of targeted energy-use taxes on AI data centers and cryptocurrency mining is to lower emissions and generate money for climate action.

Q2. How much revenue could they generate?

Ans. Experts estimate over $20 billion annually from crypto and AI taxes alone — and hundreds of billions from broader global levies.

Q3. Why are these taxes being proposed now?

Ans. Because conventional climate-finance sources are not keeping up with the rapidly increasing demand for electricity from both industries.

Read More Article>https://www.climatechallange.com/ai-offers-a-new-era-in-agricultural-innovation/