So far we haven’t been able to separate economic growth from increased emissions and resource use. The historical trend shows that for every 1% increase in global GDP, carbon emissions need to rise by approximately 0.5%, and resource expenditure by 0.4%. Today’s business practices indicate that by 2030, the global gap between the supply and demand of natural resources will contribute in 8 billion metric tons of CO2. An all-front shift to digital has the potential to detach emissions and resource use from economic growth, yet there are some problems that need to be addressed first.
Infrastructure behind digital
Let’s take the most benign example of replacing paper textbooks with e-books. It’s easy to see how using physical copies of books contributes to global warming, because we can feel, touch and smell the paper, even see the where it was printed on the covers. However, just because digital documents don’t buzz, emit smoke or require physical manipulation, it’s harder to fully grasp that we actually experience them through solid materials which depend on even deeper underlying infrastructure such as telegraph and telephone networks.
Physical nature of tech
The term “rare earth” refers to a collection of 17 rare minerals – elements from the periodic table that occur in very small amounts in nature, yet are critical to building hi-tech items like color TVs, headphones, smartphones and electric cars. On top of that, these minerals are rarely processed where they’re found, often shipped at the environment’s expense to parts of the world where cheaper labor is available. In the same way, since they need consistent energy supply, data centers that store digital memories make your Netflix binges possible and every Snapchat you share by relying heavily on coal-powered electricity. Ironically, when data centers are mentioned, the public sees clean white walls, silent rooms and wired metal cases.
The sustainable potential of digitization
On the other hand, digital initiatives have an immense potential to decarbonize the global economy. By focusing on just three industries – electricity (15.8 billion metric tons avoided), logistics (9.9 billion) and automotive (540 million) there is an opportunity to cut back on 26 billion metric tons of net CO2 emissions by 2025. This roughly equals to the CO2 emitted by all the European economies over that time period, or the US more than five times over. On the global level, this would mean reduction of 8.5% by 2025. In the electricity sector alone, smart asset planning and management, as well as universal storage integration has the potential to save 8.8 billion metric tons of CO2 by 2025, liberating $418 billion of new value for the economy.
The role of consumers and businesses
In order to achieve a full separation of emissions growth from economic progress, individual consumers and small businesses need to put their trust in digital technologies and solutions that will help them achieve higher levels of efficiency and reduce energy dependence. The Accenture Digital Consumer Survey from 2015 concluded that by 2020 nearly half of consumers will depend on the Internet of Things devices (IoT) with a strong focus on home cameras and security systems, smartwatches and fitness devices. However, these smart devices can be coupled with advanced home energy solutions aimed at sustainable living and reduced dependence from coal-powered energy. Working through Property Assessed Clean Energy (PACE) programs, there are companies that provide finance for solar upgrade projects to homeowners who choose to make this investment. Going solar and investing in photovoltaic equipment has more sense to it with every passing day, as the utility rates go up and the price of solar upgrades goes down. And if you own a plug-in electric car, you can save even more by charging it with free solar energy.
The environmental footprint of digital
However, there is a number of barriers that need to be crossed if the full potential of sustainable digital transformation is to be realized, many of them related to the environmental imprint of digital technology itself. E-waste, for example, is ceaselessly growing, resulting in lost potential value of reusing or recycling devices, while landfills are growing and increased amounts of toxic chemicals are being released into the environment. Telling by a UN study, 40 million metric tons of e-waste was discarded in 2014 only, 7 million of which originated from the US and 6 million from China. Due to their high power consumption and often inefficient cooling systems, data centers currently accost for 1.5 to 2% of global electricity use, with a rate that is growing at 12% a year. Roughly speaking, it’s an equivalent of an annual output of 50 mid-sized power plants.
Currently, a successful move to a more sustainable circular economy can only be credited to few pioneers and first-moving global companies. The barriers to its widespread adoption include the geographic dispersion of supply chains and complexity of materials and deconstruction processes. However, digital innovations are providing businesses and individual consumers with means to overcome these barriers by matching the supply and demand for underused assets and products, which lead to reduced dependence on non-sustainable energy sources.