Central Bank Digital Currencies and CO2: Digital currency as a tool for reducing greenhouse gas emissions

Carbon emissions and the cash lifecycle in the UK and Canada

Figure 1: Energy demand by lifecycle stage w/aggregate
Table 1: ATM Energy Demand
Table 2: ATM Energy Emissions
Figure 2: Contribution by life cycle stage to CO2e emissions annual
Figure 3: Energy demand by lifecycle stage
Figure 4: Average banknote travel distance
Figure 5: Tons of CO2e emissions, annual

CBDC design considerations

Conclusion

“I thought this was a really enterprising attempt to look at an underexplored dimension of the CBDC debate and learnt a lot from reading it. The essay is well constructed, with clear narrative and well written. One issue that is not really addressed, is whether the introduction of a retail CBDC is really necessary to get the emissions gains from reducing the use of banknotes. The Covid pandemic has already led to a massive expansion in the use of contactless payments and this seems unlikely to unwind as the pandemic recedes.”

A short excerpt of comments by Professor Charles Bean

References

Appendix A: Core CBDC Features

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