Analyzing asymmetric effects of cryptocurrency demand on environmental sustainability

When bitcoin (BTC), the first pioneering cryptocurrency was released in 2009, it was considered an apolitical currency. Besides, the possible effect of BTC and other cryptocurrencies on either financial markets or transactions has been widely discussed. However, the environmental effects of cryptocu...

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Bibliographic Details
Published in:Environmental science and pollution research international 2022-05, Vol.29 (21), p.31723-31733
Main Authors: Erdogan, Sinan, Ahmed, Maruf Yakubu, Sarkodie, Samuel Asumadu
Format: Article
Language:English
Subjects:
Alternative energy sources
Aquatic Pollution
Asymmetry
Atmospheric Protection/Air Quality Control/Air Pollution
Blockchain
Carbon
Causality
Climate change
Coal
Demand
Digital currencies
Earth and Environmental Science
Ecotoxicology
Emissions
Energy consumption
Energy efficiency
Energy resources
Environment
Environmental Chemistry
Environmental degradation
Environmental effects
Environmental Health
Environmental impact
Environmental science
Policy
Power
Profits
Research Article
Sustainable development
Waste Water Technology
Water Management
Water Pollution Control
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Summary:When bitcoin (BTC), the first pioneering cryptocurrency was released in 2009, it was considered an apolitical currency. Besides, the possible effect of BTC and other cryptocurrencies on either financial markets or transactions has been widely discussed. However, the environmental effects of cryptocurrency demand have been ignored. Here, this study examines the nexus between cryptocurrencies and environmental degradation by employing standard and asymmetric causality methods. The Toda-Yamamoto and bootstrap-augmented Toda-Yamamoto test results reveal Bitcoin and Ethereum (ETH) excluding Ripple (XRP) have causal effects on environmental degradation. The Fourier-augmented Toda-Yamamoto test results show causal effects running from Bitcoin and Ripple to environmental degradation, whereas no causal effect runs from Ethereum to environmental degradation. The asymmetric causality shows causal effects from the positive shock of Bitcoin demand, negative shocks of Ripple and Ethereum demands to positive shocks of environmental degradation. Further discussions and policy implications are provided in the relevant sections of this study.
ISSN:0944-1344
1614-7499
DOI:10.1007/s11356-021-17998-y