ICT and climate change: Problem or solution?
Information and communication technologies can help curb global warming, but the sector is also coming under growing pressure from the EU to lead by example by cutting its own emissions, which are now comparable to that of the aviation sector.
Information and communication technology (ICT) firms employ 6.6 million people across the European Union and contribute to more than 40% of overall productivity growth. ICTs are already present in almost every sector of the European economy, but the European Commission is encouraging their wider roll-out to help the economy become more environmentally-friendly.
According to consulting firm McKinsey, boosting the use of intelligent devices and applications could reduce global CO2 emissions by as much as 15% by 2020.
However, increased uptake of such applications also has its drawbacks. ICT usage is responsible for about 7.8% of the EU's electricity consumption, and will hit 10.5% by 2020, according to estimates. Global CO2 emissions for the sector as a whole are set to double by 2020, as a result of increased take-up of ICT and computers in developing countries.
"The rapidly growing carbon footprint associated with information and communications technologies, including laptops and PCs, data centres and computing networks, mobile phones, and telecommunications networks, could make them among the biggest greenhouse gas emitters by 2020," according to McKinsey.
The Commission has therefore asked ICT companies to reduce their own energy consumption, which currently amounts to 2% of global emissions, according to consulting firm Gartner. In return, Brussels is promoting the use of ICT by energy-hungry industries to help them reduce their consumption.
The European Commission believes the ICT sector could help to cut greenhouse-gas emissions in three ways:
- First, by enabling energy savings in the wider economy, particularly in the most energy-hungry sectors, such as buildings, transport and manufacturing.
- Second, by contributing to the transition to an immaterial economy, where teleworking, e-commerce and so-called 'cloud computing' (the use of remote technology to complete tasks carried out by personal computers) could allow enormous energy savings.
- Third, by promoting the recording of energy consumption in households, power grids and in industrial applications. More awareness will lead to less consumption, runs the Commission's argument.
Buildings, transport and manufacturing
Buildings account for about 40% of energy use in the EU. The Commission estimates that an effective policy of energy savings and the use of appropriate technology could reduce a building's carbon footprint by up to 17%, thus triggering an 11% reduction in total energy consumption in the EU by 2020.
The EU executive specifically addressed the issue in its 2002 Directive on the Energy Performance of Buildings (EPBD). The EPBD provides a common methodology for calculating the energy performance of buildings and for creating minimum energy-performance standards in individual member states (see EurActiv Links Dossier).
In November 2008, the Commission proposed a review of the directive to further boost the energy-efficiency of buildings. The revised directive promotes such technologies as solid-state lighting, intelligent sensors and lighting control systems among means of lowering the energy consumption of buildings. Companies such as Honeywell are making the case for mandatory control systems to be applied in Europe.
As for transport, the EU executive estimates that the sector accounts for 26% of energy use in Europe. If properly applied, ICT can cut carbon emission from transport by 27%, according to the Commission. In order to reach this goal, Brussels is promoting partnerships between the ICT sector and the transport logistics industry. A number of concrete proposals on so-called 'Intelligent Transport Systems' were put forward last December (EurActiv 17/12/08).
Brussels is also stressing the importance of increased use of ICT in manufacturing to improve production, save costs and reduce CO2 emissions. In a recovery action plan published last November, the Commission proposed €1.2 billion for a "factory of the future initiative". The objective is to help EU manufacturers across all sectors, and particularly small and medium-sized enterprises (SMEs), to increase their technological base.
Teleworking and the 'immaterial economy'
The shift to teleworking and online business is also expected to have a positive impact on reducing emissions. Recent industry research conducted on behalf of the Climate Group, an NGO, found that using technology to dematerialise the way we work could deliver a reduction of 500 Mt of CO2 by 2020 – the equivalent of the ICT industry's global carbon footprint in 2002.
The Commission is also pushing for teleconferencing rather than personal meetings to reduce travel-related energy consumption. Meanwhile, boosting e-commerce, which is now used by almost a third of Europeans, according to Eurostat figures, is also expected to reduce emissions linked to high-street shopping. However, the transition to an immaterial economy has raised concerns among social scientists about its potential impact on social behaviour.
Another solution backed by the Commission is to lower energy consumption via so-called 'cloud computing', or the use of remote technology to fulfill tasks carried out by personal computers. Companies such as Google have started using such technology to provide users with remote sofware such as word processors. If widely adopted, it could turn consumers away form buying sofware, as all the applications and programmes they need could become available on remote personal accounts similar to Gmail or Hotmail. In fact, because remote applications can be used from any computer, cloud computing could also reduce people's need to buy more and more hardware, ultimately reducing CO2 emissions related to PC production. However, the creation of huge databases with all sorts of personal information is likely to raise data privacy concerns.
The immaterial economy: A red herring?
However, just like the much-touted paperless office of the 1990s, the shift to an immaterial economy may never actually materialise.
According to a report by consulting firm McKinsey, published in June 2008, little is to be expected from virtual technologies such as teleworking, video-conferencing and e-commerce, which it had been believed could help to reduce the need for freight or travel. Although all are increasingly commonplace, the report noted that the "dematerialisation" of the economy "is only one part (6%) of the estimated low-carbon benefits the ICT sector can deliver".
The report identifies four major areas where ICT could be more systematically applied:
- Industrial motors and automation (0.97 GtCO2e in 2020, worth €68 billion);
- Logistics (1.52 GtCO2e, with energy savings worth €208 billion);
- Buildings (1.68 GtCO2e, worth €216 billion), and;
- Grid technologies (2.03 GtCO2e, worth €79 billion).
The report also recommends rethinking energy consumption related to the way we live, work and play in a low-carbon world. New business models that drive low-carbon alternatives can be developed across all sectors of the economy, according to the report.
Data centres consume as much energy as the Netherlands
Another concern of the shift to the 'immaterial economy' is that it nevertheless still requires lots of material locations and servers to store online information. The growing power requirements needed to run and cool data centres now account for almost a quarter of ICT's global carbon dioxide emissions, according to Gartner, a research and consulting firm.
"Although the figure compares favourably with the 40% of emissions from PCs and monitors, it is much more concentrated and rising more quickly," said Rakesh Kumar, vice-president for research at Gartner, quoted by CNET News.com.
According to business consulting firm McKinsey, data centres' emissions now approach those of entire countries like Argentina or the Netherlands. "Our work suggests that companies can double the energy efficiency of their data centres through more disciplined management, reducing both costs and greenhouse gas emissions. In particular, companies need to manage technology assets more aggressively so existing servers can work at much higher utilisation levels."
In December 2008, the European Commission published a Code of Conduct for operating energy-efficient data centres, including guidelines, recommendations and an inventory of good practices that could reduce energy usage by up to 20%. The best-practice document sets out a number of simple measures that can reduce energy usage by data centres. These include the creation of "virtual servers", the reduction of overcooling and the use of natural cooling.
Data centres consumed an estimated 56 TWh in Western Europe in 2007, comparable to the electricity production of Greece (2004 Eurostat data). This amount is projected to increase to 104 TWh per year by 2020 if no action is taken.
Smart meters: Raising energy-efficiency awareness
Under the EU executive's plans, cities, buildings and cars should all be equipped with new devices that are able to measure CO2 emissions. Increasing the use of smart meters in buildings and houses, for instance, should make people more aware of their energy consumption and thus encourage them to save more. The measure could reduce energy consumption by 10%, according to Commission estimates.
To reach this goal, the EU executive is pushing for common standards for smart meters in order to reduce costs, bearing in mind the 10-15 year lifespan of metering solutions. With this aim, Brussels issued a standardisation mandate to the three EU-wide standardisation bodies, CEN, CENELEC and ETSI, to develop minimum levels of functionality for utility meters.
Using meters is also considered crucial for the development of smart electricity grids, which facilitate better management of energy flows, and help integrate traditional and renewable energy sources more easily via information exchanges.
ICT sector: Setting an example?
The push for massive deployment of smart technologies should help the ICT sector increase profits, according to Martin Selmayr, spokesman for EU Information Society Commissioner Viviane Reding.
However, in return, the industry is exhorted "to lead by example and reduce the energy it uses". Indeed, the rapid uptake of computers, mobile phones and the Internet in the emerging world is set to double the industry's CO2 emissions by 2020, according to a study published by consulting firm McKinsey (EurActiv 27/06/08).
Commissioner Reding agrees with the findings of the report. "ICT today accounts for 2% of the global carbon footprint, but this is expected to grow," she underlined before industry experts during a conference on 'ICT for a global sustainable future' held in Brussels in January.
The 2% figure comes from estimates by consulting firm Gartner. The study is significant, because it shows that emisisons from the ICT sector are only slighly lower than those for the aviation sector, which will be regulated at EU level via its introduction into the bloc's emissions trading scheme for greenhouse gases (EU ETS; see EurActiv Links Dossier).
The Commission does not foresee any binding target for the ICT industry, but "recommends" that the sector "shows the way for the rest of the economy by reducing its own carbon footprint already by 2015 by 20%," Reding said in a statement (EurActiv 13/03/09).
Major ICT and telecoms companies have already announced commitments to significantly cut their emissions. BT intends to reduce its carbon footprint by 80% by 2016, in comparison to 1996 levels. The British telecoms and internet giant is working towards this target by increasing its reliance on teleworking and making more flexible arrangements for its employees to reduce travel costs, according to a BT spokesperson.
Vodafone, the UK mobile telecoms giant, plans to halve its CO2 emissions by 2020, while US chipmaker Intel has committed to reducing its carbon footprint by 20% by 2012. Handset makers, on the other hand, appear to be lagging behind. Motorola and Nokia have committed themselves to 6% reductions by 2010 and 2012 respectively.
EU Commissioner for Information Society and Media Viviane Reding said: "Targeting energy-efficient and low-carbon growth will help Europe face its biggest challenges: climate change, energy security and the economic crisis. ICTs have an enormous untapped potential for saving energy right across the economy. I personally would recommend to the ICT sector to show the way for the rest of the economy by reducing its own carbon footprint by 20% by 2015 already". Reding also explicity called for a 'New Green Deal for Europe' to fight the economic and financial crisis.
Reding's position is clearly supported by Greenpeace, the environmental NGO. A report it published earlier this year ranked companies in the electronics sector according to their policies and practices on reducing greenhouse gas emissions, toxic chemicals and waste. Sony Ericsson, Apple and others were praised in the report for meeting - and in many cases even exceeding - the energy-efficiency requirements laid out by the US Energy Star standard. "Dell scores relatively poorly, while Toshiba, Samsung and LGE score close to, or zero, on climate-change criteria," it added.
"As one of the most innovative and fastest growing industries, the biggest electronics companies must show leadership in tackling climate change by reducing both their direct and indirect climate-change footprints," the NGO said in a statement.
In a report on ICT and sustainable development under review by the French government, the importance of ICT to lower CO2 emissions is acknowledged, but the document also underlined that "the spread of ICT represents a serious threat to the achievement of the 2020 target on energy efficiency, and therefore it is necesary to put in place a public policy of energy consumption control".
Bridget Cosgrave, director-general of DigitalEurope, the industry body representing high-tech firms active on the European market - among which Microsoft, Panasonic, Oracle and Sony - commented: "The fact that the Commission recognises that ICT offers systemic solutions and is a powerful enabler of change is good news. The ICT sector will do its part to realise ICT-enabled innovations and looks forward to further close cooperation with the Commission as it develops its recommendations".
James Lovegrove, managing-director of TechAmerica Europe, underlined that the Communication on 'Greening ICT' was "a timely sign-post for many decision-makers to get involved in supporting the green-tech revolution". "There is a unique opportunity for politicians to use stimulus packages to invest in smart technology to leave a legacy to future generations," he added.
According to a document published by the Commission, many companies have already voluntarilyy committed to slashing their emissions. Specifically, Alcatel-Lucent is planning a 10% reduction by 2010, BT 80% by 2020, Cisco Systems 25% by 2012, Deutsche Telekom 20% by 2020, France Telecom 20% by 2020, Hewlett-Packard 16/40% by 2010/2011, Intel 20% by 2012, Motorola 6% by 2012, Nokia 6% by 2012, Sun Microsystems 20% by 2015 and Vodafone 50% by 2020.
The two Internet giants, Google and Microsoft, have adopted different strategies to lower energy consumption. Google "encourages use of the Web to dematerialise and mechanise some elements of work and to serve as a catalyst for efficiency. Already, Web-based word processors, email, spreadsheets and presentation packages that allow for more efficient collaboration between people are revolutionising public services and business delivery. Web-based services thus play an important role in achieving a knowledge-based, low-carbon economy and in transforming business processes in a way that result in higher wealth gains and lower carbon emissions".
Microsoft is instead promoting a number of projects meant to 'green' public administrations through higher reliance on energy-efficient technologies and with increased use of digital documents to replace paper.
"PCs, mobile phones and the web have transformed the way we all live and do business," says Steve Howard, CEO of the Climate Group. "Supported by innovative government policy, ICT can unlock the clean green industrial revolution we need to tackle climate change and usher in a new era of low carbon prosperity."
"During the next five years, increasing financial, environmental, legislative and risk-related pressures will force IT organisations to get 'greener'," said Simon Mingay, vice-president of research at Gartner, the research and consulting firm. "When enough buyers start demanding it and we get beyond the superficial, being 'less bad' will no longer be anywhere near acceptable enough," he added in an April 2007 statement.
- 10 Jan. 2007: Commission presents "20-20-20" energy and climate change targets (20% renewables and 20% less greenhouse gas emissions by 2020).
- 9 March 2007: EU summit endorses Commission proposals (EurActiv 13/03/07).
- 12 Dec. 2008: EU summit agrees final version of energy and climate change package (EurActiv 12/12/08).
- 17 Dec. 2008: Parliament endorses energy and climate change package (EurActiv 18/12/08).
- 12 March 2009: European Commission adopts Communication on 'Mobilising ICT to facilitate the transition to an energy-efficiency, low-carbon economy' (EurActiv 13/03/09).
- Second half 2009: Commission expected to table recommendation, with detailed measures to encourage use of ICT to green the economy.
- Dec. 2009: UNFCCC conference in Copenhagen (COP-15) and projected completion of UN post-Kyoto deal.
- 2020: Target date to achieve the "20-20-20" objectives.