This month, The UN Commission for Trade and Development released its report on the Digital Economy. The report highlights trends and policies related to the access, use, and impact of digital technologies. Previous reports have focused largely on bridging digital and data divides in developing countries, while highlighting the need for improved governance of digital platforms. For the first time, this year’s report relates the trends of digitalization to their environmental impact.
The report highlights the convergence of digitalization with the need for environmental sustainability. Digital technologies have always been elevated in society as a great equalizer. They have been promoted with the potential to improve societal well-being by democratizing access to information, labor markets, connectivity, and collaboration beyond local opportunities. The UNCTAD Report suggests that the digital economy continues to grow at an accelerating rate. Access to smartphones, the Internet of Things, and e-commerce have expanded exponentially. Nevertheless, its intended benefits remain unevenly distributed. Disparities in accessibility to these technologies between countries and regions are limiting their potential inclusive benefits. For instance, the internet remains inaccessible for 2.6 billion people according to a ITU report released this year. The disparate expansion of digital technologies limits the ability of millions to reap the benefits of novel innovations. The discrepancies are heightened further by the differentiated global effects of climate change, disproportionately affecting developing countries. The Digital Economy report highlights that climate-induced constraints of natural resources compete with the ambition for inclusive digital development.
Emerging technologies, such as Artificial Intelligence, blockchain, and big data analytics are increasingly in the limelight for the adverse environmental costs at which they are progressing. The ecological costs of digital technologies stem from the use of raw materials, water, and energy. According to the International Energy Agency, the cumulative global energy use of data centers equals the energy demand of France. Data centers were among the top 10 most water-intensive industries in the US in 2018, and their demand is growing. A combination of technical advantages and public policy preferences favors the placement of centers in proximity to the users. As a result, most data centers are in developed economies. However, the expanding digitalization in developing countries includes a growing demand for local data centers, despite the strain they place on natural resources in areas already suffering from climate-induced environmental shortages. The resulting dynamic creates a tension between the need for digital development and considerations of sustainability. Although digital technologies remain crucial for inclusive development, environmental stewardship is essential to protect the populations vulnerable to the changing climate.
When it comes to energy resources, not all kilowatt-hours are created equal. The time and place of energy generation can radically alter their ecological cost. Solar farms provide cheap and renewable energy during the day, but the evening demand must be met with alternative sources that are not intermittent, such as fossil fuels. Similarly, an area without reliable renewable energy infrastructure will rely more heavily on fossil fuels. The local temporal and geographic context determine the environmental costs of energy generation.
Many developing countries lack the energy capacity to add digital infrastructure, such as data centers, to their grid. According to the report, Africa accounts for less than 1 percent of data center capacity. Similarly, even though India produces 20% of the world’s data but accommodates only 2% of the world’s data centers. The historical underdevelopment of the energy grid limits the ability of developing countries to partake in technological advancement such as AI or blockchain. Furthermore, the added strain on the grid from the growing digital economy can encumber the transition to green energy. Even developed economies are affected. In Ireland, a fifth of the national energy demand stems from data centers. The amount has quadrupled over the last 10 years, while the government has struggled to meet its climate targets. Thus, digital technologies’ growing demand for energy both deepens digital divides and strains climate targets.
A similar challenge plagues water resources. 1liter ≠ 1liter. Drought conditions and other preexisting climatic circumstances see the expansion of digital economy compete with the foundational needs of local communities. This competition has sparked public protests in the past. A wave of protests hit Uruguay last year in response to corporate plans to construct data centers in the countries’ borders despite national water shortages. More recently, Big Tech companies have been met with local resistance in Chile. Chile already suffers from a drought that is expected to last until 2040, heightening the concern for the sufficiency of local water supplies. The water demand of digital technologies competes with the demand for drinking water and agricultural irrigation. The resulting tension pits the digital economy’s developments against water needs for citizens’ livelihoods and the environmental implications of water shortages.
The Digital Economy Report highlights the dire need for standardized, transparent practices of monitoring and reporting emissions, water consumption, and energy demand across the technology design-development-deployment (and disposal) pipeline. The measurement of environmental costs shapes the policies and approaches to achieve a net-zero future. Current practices, based on an approach called “carbon matching”, allows companies to purchase so-called “emissions offsets” and “renewable energy credits” to balance their greenhouse gas emissions or fossil energy consumption. The purchase relies on the money’s reinvestment in reforestation projects or renewable energy projects. However, several reports have questioned these programs’ effectiveness. Additionally, the concept falsely equates kilowatt-hours. Industry players have faced public scrutiny surrounding the reports of emissions and energy consumption. A paper released in January has developed a counterproposal of a “contribution model”: 24/7 carbon-free energy. Instead of purchasing credits or offsets to (supposedly) mitigate the ecological costs of their operations, 150 companies have signed a commitment to build the capacity of renewable energy generation in their local areas.
The Digital Economy Report’s entanglement of digitalization and sustainability comes at a crucial time. Artificial Intelligence and blockchain technologies appear to signify the arrival of technological developments with a growing appetite for natural resources and energy. The report also calls attention to the potential of these emerging technologies to deepen existing disparities, particularly considering the environmental costs. Climate change remains a global responsibility. Underdeveloped energy grids and the natural constraints of resources, exacerbated by climate change, limit the ability of developing countries to reap the benefits of the digital economy. In response, the report calls for international collaboration to ensure the inclusive development of the digital economy. Financial and technical assistance can help surmount local shortages in infrastructure. Additionally, trans-national approaches such as promoting practices of cross-border data flows can help avoid burdening already strained natural resources. Finally, transparent processes to monitor energy and water consumption, as well as emissions, can help inform better business practices and public policies. An accurate measure of digital technologies’ impact on water consumption, energy demand, and raw materials can highlight both synergies and tradeoffs for policy makers, civil society, and industry to consider when establishing best practices and regulation.
Next week’s blog will focus on how the raw material in digital technology production threatens the environment and reinforces global inequalities.
This month, The UN Commission for Trade and Development released its report on the Digital Economy. The report highlights trends and policies related to the access, use, and impact of digital technologies. Previous reports have focused largely on bridging digital and data divides in developing countries, while highlighting the need for improved governance of digital platforms. For the first time, this year’s report relates the trends of digitalization to their environmental impact.
The report highlights the convergence of digitalization with the need for environmental sustainability. Digital technologies have always been elevated in society as a great equalizer. They have been promoted with the potential to improve societal well-being by democratizing access to information, labor markets, connectivity, and collaboration beyond local opportunities. The UNCTAD Report suggests that the digital economy continues to grow at an accelerating rate. Access to smartphones, the Internet of Things, and e-commerce have expanded exponentially. Nevertheless, its intended benefits remain unevenly distributed. Disparities in accessibility to these technologies between countries and regions are limiting their potential inclusive benefits. For instance, the internet remains inaccessible for 2.6 billion people according to a ITU report released this year. The disparate expansion of digital technologies limits the ability of millions to reap the benefits of novel innovations. The discrepancies are heightened further by the differentiated global effects of climate change, disproportionately affecting developing countries. The Digital Economy report highlights that climate-induced constraints of natural resources compete with the ambition for inclusive digital development.
Emerging technologies, such as Artificial Intelligence, blockchain, and big data analytics are increasingly in the limelight for the adverse environmental costs at which they are progressing. The ecological costs of digital technologies stem from the use of raw materials, water, and energy. According to the International Energy Agency, the cumulative global energy use of data centers equals the energy demand of France. Data centers were among the top 10 most water-intensive industries in the US in 2018, and their demand is growing. A combination of technical advantages and public policy preferences favors the placement of centers in proximity to the users. As a result, most data centers are in developed economies. However, the expanding digitalization in developing countries includes a growing demand for local data centers, despite the strain they place on natural resources in areas already suffering from climate-induced environmental shortages. The resulting dynamic creates a tension between the need for digital development and considerations of sustainability. Although digital technologies remain crucial for inclusive development, environmental stewardship is essential to protect the populations vulnerable to the changing climate.
When it comes to energy resources, not all kilowatt-hours are created equal. The time and place of energy generation can radically alter their ecological cost. Solar farms provide cheap and renewable energy during the day, but the evening demand must be met with alternative sources that are not intermittent, such as fossil fuels. Similarly, an area without reliable renewable energy infrastructure will rely more heavily on fossil fuels. The local temporal and geographic context determine the environmental costs of energy generation.
Many developing countries lack the energy capacity to add digital infrastructure, such as data centers, to their grid. According to the report, Africa accounts for less than 1 percent of data center capacity. Similarly, even though India produces 20% of the world’s data but accommodates only 2% of the world’s data centers. The historical underdevelopment of the energy grid limits the ability of developing countries to partake in technological advancement such as AI or blockchain. Furthermore, the added strain on the grid from the growing digital economy can encumber the transition to green energy. Even developed economies are affected. In Ireland, a fifth of the national energy demand stems from data centers. The amount has quadrupled over the last 10 years, while the government has struggled to meet its climate targets. Thus, digital technologies’ growing demand for energy both deepens digital divides and strains climate targets.
A similar challenge plagues water resources. 1liter ≠ 1liter. Drought conditions and other preexisting climatic circumstances see the expansion of digital economy compete with the foundational needs of local communities. This competition has sparked public protests in the past. A wave of protests hit Uruguay last year in response to corporate plans to construct data centers in the countries’ borders despite national water shortages. More recently, Big Tech companies have been met with local resistance in Chile. Chile already suffers from a drought that is expected to last until 2040, heightening the concern for the sufficiency of local water supplies. The water demand of digital technologies competes with the demand for drinking water and agricultural irrigation. The resulting tension pits the digital economy’s developments against water needs for citizens’ livelihoods and the environmental implications of water shortages.
The Digital Economy Report highlights the dire need for standardized, transparent practices of monitoring and reporting emissions, water consumption, and energy demand across the technology design-development-deployment (and disposal) pipeline. The measurement of environmental costs shapes the policies and approaches to achieve a net-zero future. Current practices, based on an approach called “carbon matching”, allows companies to purchase so-called “emissions offsets” and “renewable energy credits” to balance their greenhouse gas emissions or fossil energy consumption. The purchase relies on the money’s reinvestment in reforestation projects or renewable energy projects. However, several reports have questioned these programs’ effectiveness. Additionally, the concept falsely equates kilowatt-hours. Industry players have faced public scrutiny surrounding the reports of emissions and energy consumption. A paper released in January has developed a counterproposal of a “contribution model”: 24/7 carbon-free energy. Instead of purchasing credits or offsets to (supposedly) mitigate the ecological costs of their operations, 150 companies have signed a commitment to build the capacity of renewable energy generation in their local areas.
The Digital Economy Report’s entanglement of digitalization and sustainability comes at a crucial time. Artificial Intelligence and blockchain technologies appear to signify the arrival of technological developments with a growing appetite for natural resources and energy. The report also calls attention to the potential of these emerging technologies to deepen existing disparities, particularly considering the environmental costs. Climate change remains a global responsibility. Underdeveloped energy grids and the natural constraints of resources, exacerbated by climate change, limit the ability of developing countries to reap the benefits of the digital economy. In response, the report calls for international collaboration to ensure the inclusive development of the digital economy. Financial and technical assistance can help surmount local shortages in infrastructure. Additionally, trans-national approaches such as promoting practices of cross-border data flows can help avoid burdening already strained natural resources. Finally, transparent processes to monitor energy and water consumption, as well as emissions, can help inform better business practices and public policies. An accurate measure of digital technologies’ impact on water consumption, energy demand, and raw materials can highlight both synergies and tradeoffs for policy makers, civil society, and industry to consider when establishing best practices and regulation.
Next week’s blog will focus on how the raw material in digital technology production threatens the environment and reinforces global inequalities.
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