Does Carbon Pricing Displace Crypto-Mining Emissions? Quantile Evidence on Carbon Leakage from EU27, Russian and Rest-of-World Power Grids

Abstract

Carbon pricing is jurisdictional, while proof-of-work cryptocurrency mining is a highly mobile electricity load. We examine whether daily power-sector emissions display a cross-regional and distributional pattern consistent with short-run emissions displacement. Using daily observations covering calendar years 2019–2025 (with a boundary observation on 1 January 2026; N = 2550 after transformation and cleaning), we estimate quantile regressions for the EU27, the Russian Federation and the rest of the world using the interaction between Bitcoin returns and European carbon-allowance returns. The focal Russian lower-tail interaction is positive (q10 beta = 0.0662); OLS and dynamic specifications remain positive, and a 1000-replication pairs bootstrap gives p = 0.0077. The association survives a trading-day-only sample, calendar and persistence controls, and a seven-lag specification, while randomised-carbon and non-power-sector placebo outcomes are null. However, the coefficient loses conventional significance without Winsorisation, the May-2021 Chinese-ban timing prediction is not supported, and a direct EU27-minus-Russia substitution diagnostic is null. Quantile-on-quantile estimates place the largest Russian Bitcoin-return coefficients in high-carbon-price, low-emission states, but remain descriptive. Because the design does not observe mining capacity moving across jurisdictions and the available full-sample Russian emissions series is national rather than subnational, the evidence supports a leakage-consistent operational association rather than proof of physical relocation or a broad causal effect of EU carbon pricing.