Legal Approaches to Addressing the Environmental Impact of Blockchain Technology

Abstract

Blockchain technology, particularly through its proof-of-work consensus mechanism, has become a cornerstone of decentralized applications like cryptocurrencies, supply chain management, and finance. However, concerns over its environmental impact—specifically, its significant energy consumption and carbon footprint—have emerged as a critical challenge. This review explores the environmental implications of blockchain, focusing on energy-intensive mining processes and the associated carbon emissions. The article examines existing international and national legal frameworks aimed at addressing global environmental concerns, such as the Paris Agreement and regional efforts like the EU Green Deal, and evaluates their effectiveness in regulating blockchain’s ecological footprint. The review highlights key legal strategies to mitigate blockchain's environmental impact, including carbon offsetting programs, energy efficiency regulations, and incentives for greener consensus mechanisms. Furthermore, it addresses challenges and controversies surrounding the regulation of blockchain, particularly the conflict between rapid technological development and slow-moving legal frameworks. The article proposes future directions for mitigating blockchain's environmental footprint, emphasizing the need for stronger international cooperation and innovative legal strategies that balance technological advancement with sustainability. Finally, the paper offers recommendations for policymakers to integrate environmental considerations into blockchain regulation while encouraging collaboration between the blockchain industry and environmental organizations. By exploring these legal approaches, the review provides insights into how blockchain can evolve in an environmentally sustainable manner, contributing to global sustainability goals without sacrificing innovation.