Technology may solve climate change problems, but it also causes them

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It’s that time of year again as everyone waits in anticipation of the annual fall release of the latest and greatest digital devices and apps by tech companies. Their CEOs are expected to perform to their full potential with the hour-long parade, complete with flashing lights and stunning marketing collateral. The internet is full of rumors about what the tech sector has in store for us. But few people talk about the other side of the coin – the dark bottom of the tech industry that is slowly but surely eroding our planet.

Yes, you read that correctly. The industry that has given us life-changing innovations like the smartphone and social media is also responsible for some of the most pressing environmental issues we face today. For example, one major technological development related to sustainability has barely made headlines: the European Union’s recent landmark ruling to amend the Radio Equipment Directive and mandate all portable electronic devices to commit to a single unified charging port in USB-C by 2024.

The amendment is expected to reduce around 11,000 tons of e-waste in the European Union alone each year. While this move is a positive step toward environmental responsibility, the unfortunate reality is that the broader technology sector is facing a sustainability crisis.

For most people, digital technology is a solution, not a driver, to our unsustainable practices. Digital applications are driving a revolution that promises and delivers transformative societal benefits. From smart cities and precision agriculture to the prospect of immersive metaverses and super-efficient supply chains that power AI, the idea that digital technology will be a panacea for all of our unsustainable practices is often promoted.

Blinded by bright promises

The danger is that the promises of digital technology could blind us to its lesser-known contributions to climate problems. Emissions from the ICT sector already rival those from the aviation industry. Moreover, the few studies conducted so far (a, b, c) indicate that emissions from the ICT sector will at least double to 2-3 GTCO2e, and if the rise in global greenhouse gas emissions were limited to 1.5°C by 2030, it would contribute about 10% of the global burden of greenhouse gases—roughly equivalent to that of the automobile industry. These are cautious estimates.

This poses a dilemma not only for ICT companies, but for all technology leaders and investors across the board. It is time for technology leaders to proactively address the sector’s sustainability challenges by critically and collectively questioning both supply and demand before setting their carbon footprint in stone, despite the near-term impact of green inflation that the shift may have. If they don’t, the secondary consequences could derail the sustainability benefits. Then, like many industries that preceded it, challenges could emerge in a future fractured by forced turmoil.

Unsustainable digital future chains

In 2016, Yale University ecologist Karen Seto and colleagues described three types of carbon locks. These constraints cement emissions in a sector and push them along the path of exacerbation of climate change. All three types of insurances exist in the ICT sector today and the longer they are ignored, the more difficult it is to reverse their consequences.

First, there are behavioral constraints related to customer demand for ICT goods and services. Consumers want to be constantly connected, constantly create and consume data, and replace their digital devices regularly – smartphone replacement cycles are now shorter than ever in less than two years. Companies also have closed off behaviors, such as storing all the data they produce, regardless of its usefulness. Companies use the complexity of tracking as an opportunistic reason not to attempt to do so and disclose Scope 3 emissions from technology use.

The industry as a whole also suffers from a subliminal but widespread belief that it can avoid its own sustainability impact by achieving efficiency gains in other sectors. This is, as economist William Jevons pointed out in the 1860s, a risky idea.

According to Jevon Paradox, actions that promise gains through higher efficiency are often more than offset, sometimes entirely, with rebound effects. Jevons paradoxes abound in digital technology. For example, smart home systems, which promise energy savings of 10-25%, rarely achieve.

Second, digital technology is increasingly subject to institutional shutdowns. In this case, the governance of the sector, its institutions and the decision-making process in it affect its production and consumption, and thus the formation of energy supply and demand.

Keep in mind that nearly 80% of all AI research focuses on the accuracy of AI, which increases its power density, versus just 20% on the efficiency of AI. This bias reflects the need to correct technology’s deviation from sustainability and other goals of social good before it is used for the greater good.

We have found that investments in digital new horizons tend towards areas with limited contribution to the UN Sustainable Development Goals. To be clear, about half of the $31 billion has been invested in the metaverse over the past five years in entertainment use cases that provide hardly any sustainability benefits.

Technology legislation is highly regressive and rarely addresses the need for energy sobriety. In fact, some policies lock up an entire system of contradictory climate outcomes. For example, the lack of trust in international data sharing has led to data protection policies that require local data to be stored through data centers in temperate regions or backed by networks without a rolling backbone.

It is puzzling to ignore unclean energy as a “electricity sector” problem, which can be mitigated by offsetting carbon. Technology companies already buy more than half of all renewable energy compensation in the United States today. However, every incremental renewable energy taken from the grid represents a net loss and strays from the real goal – carbon avoidance.

Third, infrastructure lock-down, which indirectly and directly emits carbon dioxide and constitutes the energy supply, is also evident in the ICT sector as well. The infrastructure for semiconductor devices is already locked in to making devices from silicon and rare earth. The transition to more energy-efficient alternatives, such as gallium nitride (GaN) or biofilms, will require a massive systemic change that will necessitate abandoning decades of investments in silicon-related infrastructure.

Keep the monster in a digital world away

Make no mistake, technologists can rightly claim to have made rapid progress in the ICT sector while managing its impact on sustainability. Studies show that the share of ICTs in global emissions has remained stable over the past decade due to cutting-edge innovations. However, historical performance should not be expected to be indicative of future results.

We are approaching the frontiers of silicon device miniaturization, indicating that without innovation of incremental change in fabrication techniques, Moore’s predictions of device efficiency may not be realized. And the low-hanging efficiency gains in network and cloud are coming to an end as the transition from copper to fiber and from smaller, less efficient data centers to high-scale data centers nears completion.

These and other terms should serve as a clear call to tech leaders. We cannot continue in the race to improve outcomes at the unit level without a systems-level perspective. Moving forward, leaders should consider critical questions that reach into the broader support of digital demand and supply, such as:

Does the demand justify the cost of fulfillment? Is technology needed in the first place? Is sustainability a major goal for application development? Have all the implications for sustainability been considered, including the negative impacts of publication?

How will the efficiency of supply be ensured? How will operational efficiencies be captured across hardware manufacturing, cloud, networking, and devices that enable technology applications? How will sustainability best practices and design principles that focus on sustainability be ensured by all players? How can technologies, such as sustainability solutions that support artificial intelligence, be better used for the benefit of the tech sector?

Insurance operations are systemic problems. Collective action involving all stakeholders will be needed to ensure that sector lockouts are proactively identified and avoided. If technology leaders answer the above questions well and act now, they can be sure that digital technology truly delivers on its good social promises in the future.

Mark Minevich is an investor, UN advisor, AI advocate, disruptive innovator, co-chair of AI for the Planet Alliance, Chair of the Executive Committee of the AI ​​for Good Foundation, Senior Adviser to BCG, and President and General Partner of Going Global Ventures.

François Candelon is Managing Director and Senior Partner of the Boston Consulting Group and Global Director of the BCG Henderson Institute.

David Young is the Managing Director and Senior Partner of the Boston Consulting Group and a fellow of the BCG Henderson Institute.

Maxime Cortox is the project leader at the Boston Consulting Group and an ambassador for the BCG Henderson Institute.

Vineet Patel is the project leader at the Boston Consulting Group and an ambassador for the BCG Henderson Institute.

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