As Trump heads to the White House, will he bring the sustainability agenda with him?

With President-elect Donald Trump set to be sworn in at his inauguration in January, the crypto market is booming – but let’s hope sustainability is kept front of mind.

Trump was always perceived to be the more crypto-friendly candidate, and supporters will now be hoping for a more innovation-friendly environment. 

Part of this innovation of course is the enormous global opportunity for climate investment and climate impact we have seen catalysing in the US. 

During the recent Climate Week NYC, we were both struck and energised by the obvious enthusiasm from investors, asset managers, and big capital for new technologies and new climate solutions. What is a fast-growing and increasingly deep-pocketed collective impetus towards embracing the climate transition may also prove to be a generational investment opportunity and fundamental technology shift.  

It also feels a particularly timely issue against the backdrop of COP29 in Azerbaijan and the discussions around the Green Digital Action Declaration, which increases commitments to leveraging digital tools for climate action. 

This is something we have passionately advocated, not least through Oxygen, Zumo’s award-winning, blockchain-powered solution to enable companies to address the carbon emissions associated with their digital asset activities – and prove it. Platforms like Oxygen allow providers to match any type of blockchain-based activity with 100% renewable electricity, which in turn acts as a demand driver in the development of renewable technologies worldwide. 

Learnings from across the pond

With the incoming Trump Administration likely to now provide a more positive environment for crypto, one of the most anticipated developments is the possible adoption of the proposed Bitcoin Act, which would establish Bitcoin as a strategic reserve asset, with the US government acquiring up to 5% of its total supply.

In recent years, however, US lawmakers have paid equal attention to the environmental costs of digital assets, with bills such as the Crypto-Asset Environmental Transparency Act aiming to apply scrutiny to the environmental impacts of mining operations.

We hope the Trump Administration won't turn a blind eye to these environmental impacts – nor indeed the technology’s promise, with the right prioritisation and investment, to deliver positive sustainability outcomes. As a first-mover, Europe has already seen significant developments in the crypto-asset sustainability space, not least in the incoming mandatory sustainability disclosures for crypto-asset service providers (CASPs) under the Markets in Crypto-Assets (MiCA) regulation. 

A definite jolt to the industry, this regulation has teeth. Failure to comply with MiCA’s mandate that CASPs active in the European Union (EU) should have a website disclosure covering the environmental impact of their offered crypto-assets could result in a potential fine of at least five million euros, or 5% of that provider’s total annual turnover. 

We’ve responded to this growing regulation-led pressure by adding MiCA-compliant sustainability metrics to our Oxygen product, which will help providers to automate and simplify the new sustainability indicator requirements ahead of the end-2024 effective date. We’re also helping Europe’s crypto companies with the white papers and other resources they will need to be fully compliant with MiCA. 

Adopting a more sustainable mindset

As Europe drives forward with its own digital asset specific sustainability requirements, we hope that the US too will continue its momentum and positive impetus in sustainability and innovation.

This needs to be at the forefront of Trump’s thinking: creating a truly sustainable, compliant digital assets sector is central to mainstream adoption and the industry’s longevity. It’s much more critical than whether or not to fire Gary Gensler, with the US Securities and Exchange Commission’s current Chair likely now on thin ice. 

It’s also not just the digital assets sector that needs to measure, and mitigate, its carbon footprint, but adjacent tech-led sectors, too. According to recent Goldman Sachs research, artificial intelligence (AI) is now poised to drive a 160% increase in data centre power demand. 

Commentators have highlighted that the computational power required for AI innovations is doubling roughly every 100 days, and that the energy required to run increasingly sophisticated AI tasks is growing at an annual rate of somewhere between 26% and 36%. 

We strongly believe in the transformative potential of both blockchain and AI to build a better world and drive the energy transition, but we can't ignore the vast amounts of electricity these industries consume. Innovation in these sectors must not come at the cost of our planet. 

So while we wait for Trump to take office, we hope that we will continue to see positive developments coming out of the US.