📲Blockchain Emissions Methodology

Blockchain Carbon Emission Calculator Methodology

Ethereum (Proof of Work)

Bitcoin

Proof of Stake

Overview

Below is Return Protocol’s blockchain carbon footprint calculator. Return Protocol estimates the carbon intensity of Ethereum, Bitcoin, and many Proof of Stake (PoS) blockchains. In theory understanding the carbon intensity of blockchains is relatively straightforward; however, in practice the accuracy and robustness of each calculation is muddied by the availability and quality of necessary information. While Return Protocol does its best to calculate the carbon footprint of each user, the precision of each calculation will vary depending on the chain.

The methodology below outlines the information needed to calculate a blockchain’s carbon footprint, along with the necessary assumptions made where information was poor or unavailable. It also examines the relevant challenges and steps taken with respect to Ethereum, Bitcoin, and other PoS chains. As the Web3 space evolves and more data becomes available, these calculators will be updated with the most accurate and up-to-date information.

Necessary Information

• Geography of Validators.

• Carbon Intensity of Each Geography (Grid Emission Factors).

• Recommended System Requirements of Validators.

• Average Energy Use of Recommended System.

• Percentage of Hash Rate/Usage per Geography.

• List of Total Historical Transactions on Blockchain.

Necessary Assumptions

• The carbon intensity in each region is correct – some regions may have poor data.

• We assume that validators are getting electricity from the grid.

• Each validator consumes the same amount of energy on average and uses the recommended system requirements.

• People are not using VPNs to hide their location.

Calculation for Carbon Intensity per Transaction (Yearly)

1. Weighed Regional Carbon Emissions (tCO2e)

   • Equation: $WRCE=N×S_r×C_i×U$
   • $N$= Number of Active Validators in Region on a Given Day
   • $S_r$ = Estimated Average Electricity Consumption of Validators per Day (MWh)
   • $C_i$ = Carbon Intensity Factor of Region (Grid Emission Factor)
   • $U$ = Percent of Mining Occurring in Region Relative to Other Regions
2. Total Blockchain Carbon Emissions (tCO2e) on any Given Day

   • Equation: $TBCE=∑_{i=1}^nWRCE_{R_i}$
   • $R_i$ = Region $i$​
   • $R_n$ = Last Region
3. Average Carbon Emissions per Transaction (tCO2e)

   • Equation: $ACET=\frac{\textrm{Transactions/Day}}{\textrm{Total Emissions/Day}}$
4. Estimate Individual Carbon Footprint (tCO2e)

   • Equation: $EICF=∑_{i=1}^n(ACET_{d+i}×N_T)$
   • $N_T$ = Number of Individual Transactions
   • $d$ = First Day
   • $d + i$= All Other Days

How to Improve Accuracy

• Understand what percentage of validators use VPNs and work to find out where they are.

• Update any/all relevant information on a daily, weekly, monthly, quarterly basis – the shorter the interval the more accurate the results.

• Run a node with different system requirements to understand electricity consumption.

• Where possible, reduce size of region to get a more precise understanding of carbon intensity or energy consumption.

• Contact validators to understand exact energy consumption.

• Contact validators to understand used systems.

Summary

The carbon footprint of each blockchain is calculated using the methodology listed above; however, each chain has its own unique challenges and characteristics which may impact the accuracy of the final calculation. Below, are summary overviews of how Ethereum, Bitcoin, and other PoS chains are calculated.

*Certain variables could cause these findings to be inaccurate.