Is Bitcoin Mining the Key to Successful Renewable Energy Projects? The Intersection Between Renewable Energy ESG Projects, Bitcoin’s Proof of Work System, and the New ESG Rules for Retirement Plans

On March 20, 2023 President Biden exercised his veto power for the first time since being inaugurated in January 2021. The veto kept in place final regulations issued by the Department of Labor under the Biden administration which made it clear Employee Retirement Income Security Act (ERISA) plan fiduciaries are not precluded from making investment decisions that reflect environmental, social, or governance (ESG) considerations. These final regulations were issued in response to a different set of final regulations put in place at the tail end of the Trump administration (referred to as the 2020 final regulations) which sought to restrict investment products from being marketed to ERISA fiduciaries based on goals and benefits that were unrelated to financial performance. Critics of the 2020 final regulations believed the regulations infringed upon plan fiduciaries’ ability to act prudently and solely in the interest of the plan as required by ERISA. The Biden administration agreed and thus put forth its own regulations which a bipartisan delegation of Congress repealed on March 1, 2023 through the Congressional Review Act which allows Congress to rescind regulations within 60 days of the regulations effective date. However, as a result of Biden’s veto, the final regulations, which became effective February 1, 2023, remain in place.

To say the regulations have created a good amount of controversy would be an understatement. Therefore, in the spirit of keeping the debate surrounding the ESG final regulations alive, there is no more appropriate topic to cover than how Bitcoin mining interacts with the final ESG regulations. The remainder of this publication will review unique issues renewable energy projects face due to energy load. We will then explore the basics of Bitcoin mining and how it could be a solution to overcoming the obstacles renewable energy projects encounter. Finally, we will review how Bitcoin mining and bitcoin (please note that Bitcoin with a capital “B” refers to the Bitcoin protocol while bitcoin with a lowercase “b” refers to the currency) should be viewed in light of the final ESG regulations issued under the Biden administration.

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