Assessing the environmental quality impact of bitcoin: Insights from the apec region and strategic recommendations for Viet Nam

Abstract

This study examines the environmental impact of Bitcoin in the APEC region from 2010 to 2023, focusing on its trading volume, market price, energy consumption, and CO₂ emissions. By employing the FGLS model to address heteroscedasticity and autocorrelation, the research ensures unbiased, linear estimates, enhancing the reliability of its findings. The findings reveal that while higher Bitcoin trading volume and market price significantly contribute to increased CO₂ emissions, Bitcoin energy consumption surprisingly demonstrates a negative correlation with emissions. This counterintuitive result suggests that escalating energy costs associated with mining may discourage excessive Bitcoin production, thereby mitigating its environmental footprint. Furthermore, the study highlights a positive correlation between renewable energy consumption and CO₂ emissions, raising concerns about inefficiencies in renewable energy deployment across the APEC region. It also underscores the substantial impact of coal consumption as a persistent driver of emissions, reflecting ongoing reliance on fossil fuels. These results point to critical gaps in energy policy and technological infrastructure, emphasizing the need for targeted interventions to align Bitcoin mining with sustainable energy practices. By situating Vietnam within this regional context, the study offers strategic recommendations, including adopting renewable energy incentives, implementing energy efficiency standards, and fostering regional cooperation to develop environmentally friendly blockchain technologies. The findings contribute to a deeper understanding of the complex dynamics between cryptocurrency activities and environmental sustainability, providing a valuable foundation for policymakers to address the challenges of digital economy growth while ensuring ecological preservation.