The Clean Cloud Act, simmering in the US Senate, isn't just about regulating crypto. It's about something far more profound: defining our values as a society. It’s a confrontation of the seduction of technocentrism with the battle cry of the climate reformation. Are we really ready to trade the health of our planet for the unproven upside of decentralized finance and artificial intelligence? That’s the question this bill makes us consider, and the answer is anything but easy.

Whose Freedom Are We Prioritizing?

The discussion around what proponents refer to as “anti-freedom” legislation sets up the debate entirely in the wrong direction. Wait, whose freedom are we supposed to be concerned with here? The liberty of the privileged few to accumulate wealth by using up massive amounts of energy mining crypto? Or future generations’ ability to enjoy the same quality of life we do today? Everyone needs to be very careful not to get swept away by the talk of innovation. They wrongly treat any kind of regulation as a moral prohibition on innovation. Progress without accountability is a risky fantasy.

Think about it this way: we regulate pollution from factories, even though it impacts their "freedom" to operate without constraints. We do all of this work because we care about public health, environmental health, equity, and transportation. Their freedom must never endanger our life, limb, and liberty. That same logic holds when it comes to AI’s energy consumption and crypto’s energy consumption. The "Clean Cloud Act," spearheaded by Senators Whitehouse and Fetterman, aims to curtail emissions tied to blockchain networks and AI models by mandating an 11% annual reduction for data centers and crypto mining facilities exceeding 100 KW of installed IT power, incentivizing a greener approach.

The Developing World Pays the Price

The CO2 emissions generated by the rapid growth of data centers are projected to reach approximately 2.5 billion metric tons globally by the end of the decade, according to Morgan Stanley. We need to ask ourselves: who will bear the brunt of these environmental consequences? The answer, as ever, is the global south. These countries are already on the frontlines of the impacts of climate change. Now, they’ll need to contend with more competition for energy as these sectors rapidly grow their demand for energy. Yet they are disproportionately affected by extreme weather disasters, food insecurity, and migration due to sea-level rise. Legitimacy As you argue about the ethicality of prioritizing the technological long goals of rich countries, this tendency frequently compounds the burdens on those who are already burdened the most.

This bill’s authors, in their understandable passion for addressing this critical issue, may, without realizing it, be making the gap much worse. We found that US penalties and regulations would need to be greater than $20 per ton of CO2e and increase each year. Consequently, both crypto miners and AI developers could pack their bags and leave for countries with lower environmental regulations. Creating a very high bar for carbon leakage will undercut the whole bill. To do so would be deeply unjust to developing nations, pushing them to become dumping grounds for dirty transition technology.

Innovation with a Conscience

We need a more nuanced approach. For starters, let’s move away from a one-size-fits-all solution and towards a more tiered system of regulations. Through this approach, countries will have the flexibility to address the differentiated needs and circumstances of each country. We know how we can provide financial support to developing countries. This investment will allow them to adopt cleaner, greener technologies and participate more fully in the digital economy—all while being better stewards of the environment.

  • Tiered Regulations: Differentiated emission standards based on a country's economic development and energy infrastructure.
  • Financial Aid: Grants and loans for developing nations to invest in renewable energy sources for crypto mining and AI development.
  • Technology Transfer: Sharing of green technologies and best practices to promote sustainable innovation.

The Bitcoin mining industry’s pivot towards AI is a testament to the resilience and innovation within the industry. Firms such as Galaxy, CoreScientific, and Terawulf have already opened their doors to HPC power for AI models, signaling a readiness to pivot. This change is the opportunity we need to focus incentives for sustainable practices within these new and developing industries.

This isn’t an effort to stifle innovation. This is an attempt to redirect that innovation onto a more sustainable course. It’s not about regulating these technologies out of existence, but about making sure the promise of crypto and AI is realized—not just for the financially privileged, but for everyone. It’s about understanding that real freedom lives in the space between—between individual liberty and societal obligation.

A Call for Ethical Leadership

The “Clean Cloud Act” introduced last month is a great first step yet not a complete answer. We admit this is a severe oversight. It’s a jumping off point for a far wider discussion of the ethical impact of technological innovation. We need policymakers and industry leaders to embrace a more sustainable approach, one that prioritizes the needs of all stakeholders, particularly those in developing nations.

We can’t afford to let the infrastructure that supports crypto become the “collateral damage.” In these times of global uncertainty, trade war, and political policy shift – let’s not compromise. In fact, the proposed “Clean Cloud Act” would directly undermine the policies of a likely Trump administration. While this administration has tried to make the US a global leader in both AI and cryptocurrency, recently undoing the AI safety standards set by Biden, it remains an existential issue for years to come.

This isn’t only a matter of effective regulatory oversight of crypto, it’s about determining the future we aspire to live in. A future in which the wonders of technological innovation are put to work for humanity — and not the other way around. A future where progress is measured not only by the increase of GDP, but through the lens of a thriving planet and equitable communities. Now more than ever, it is time to call for ethical leadership. We should continue the march of technological innovation, but not at the expense of our Earth. Let’s avoid undermining the health of our children and grandchildren while we drive innovation and economic growth. Let’s ensure that this bill actually focuses on balancing interests, not just balancing freedoms. Forward this around, and let’s make our collective shout louder than the screeching wheels of regression.