Information age - carbon footprint

SMART 2020: Enabling the low carbon economy in the information age

Smarter technology use could reduce global emissions by 15 per cent and save global industry EUR 500 billion in annual energy costs by 2020

Transformation in the way people and businesses use technology could reduce annual man-made global emissions by 15 per cent by 2020 and deliver energy efficiency savings to global businesses of over EUR 500 billion [GBP 400 billion/USD 800 billion], according to a new report published today by independent non-profit The °Climate Group and the Global e-Sustainability Initiative (GeSI).

The report – SMART 2020: enabling the low carbon economy in the information age – is the world’s first comprehensive global study of the Information and Communication Technology (ICT) sector’s growing significance for the world’s climate. The report’s supporting analysis, conducted independently by international management consultants McKinsey & Company, shows that while ICT’s own sector footprint - currently two per cent of global emissions - will almost double by 2020, ICT’s unique ability to monitor and maximise energy efficiency both within and outside of its own sector could cut CO2 emissions by up to five times this amount. This represents a saving of 7.8 Giga-tonnes of carbon dioxide equivalent (GtCO2e) by 2020 – greater than the current annual emissions of either the US or China.

Although tele-working, video-conferencing, e-paper, and e-commerce are increasingly commonplace, the report notes that replacing physical products and services with their virtual equivalents (dematerialisation and substitution) is only one part (six per cent) of the estimated low carbon benefits the ICT sector can deliver.

Far greater opportunities for emissions savings exist in applying ICT to global infrastructure and industry and the report examines four major opportunities where ICT can make further transformational cuts in global emissions. These exist globally within smart building design and use, smart logistics, smart electricity grids, and smart industrial motor systems.

Steve Howard, CEO, The °Climate Group, said: “PCs, mobile phones, and the web have transformed the way we all live and do business. Global warming and soaring energy prices mean that rethinking how every home and business uses technology to cut unnecessary costs and carbon is critical to our environment and economy. 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.”

Luis Neves, Chair, GeSI, said: “The ICT industry is a key driver of low carbon growth and can lead transformation towards a low carbon economy and society. The ICT sector must act quickly to demonstrate what is possible, require clear messages from policy makers about targets and continue to radically innovate to reduce emissions.”

Achim Steiner, UN Under-Secretary General and Executive Director, UN Environment Programme (UNEP), said: “This rigorous assessment underlines that the world can realise a green economy and make the transition to a low carbon economy. It also underlines the crucial importance of the international community reaching a deal on a new climate agreement at the climate convention meeting in Copenhagen in 2009. This partnership between GeSI, convened under UNEP, The Climate Group and McKinsey gives us yet another platform for action and yet another compelling reason for reasoned optimism.”

KEY FINDING 1: The global ICT footprint
A new ‘socially networked’ generation around the world continues to drive unprecedented global demand for ICT hardware, software and services providing mobile and instant access to information.

The global study predicts PC ownership will quadruple between 2007 and 2020 to four billion devices and emissions will double over the same period, with laptops overtaking desktops as the main source of global ICT emissions (22 per cent); mobile phone ownership will almost double to nearly 5 billion accounts to 2020 but emissions will only grow by four per cent; and broadband uptake will treble to almost 900 million accounts over the same period, with emissions doubling over the entire telecoms infrastructure.

Despite the major anticipated advances in the energy efficiency of products, the ICT sector’s own footprint – currently two per cent of global emissions – is expected to grow at six per cent per year (CAGR) and double by 2020 driven by increased technology uptake in India, China and rest of the world.

Trends like virtualisation of data centres, long-life devices, smart chargers, Next Generation Networks, and growth of renewable energy consumption (eg solar powered base stations) could help deliver future sustainable sector growth.

To help, rather than hinder, the fight against climate change, the ICT sector must manage its own growing impact and continue to reduce emissions from data centres, telecommunications networks, and the manufacture and use of its products.

KEY FINDING 2: ICT’s enabling effect in cutting global emissions

Crucially, the new report reveals significant opportunities for emissions reductions and how cost savings can be leveraged by applying ICT to global infrastructure and industry. Through enabling other sectors to reduce their emissions, the ICT industry could reduce global emissions by as much as 15 per cent by 2020 – a volume of CO2e five times its own footprint in 2020. If global businesses systematically used ICT to realise all of the solutions indicated in the report they would unlock global energy efficiency savings of over EUR 500 billion (*calculated as at December 2007 prices and not including a carbon price which may emerge if a global carbon market is established).

This enabling effect is due to ICT’s unique ability to allow us to measure, optimise and therefore manage energy consumption.

Four major global opportunities were examined through regional case studies:

1) Applied globally, smart industry motors and industrial automation would reduce 0.97 GtCO2e in 2020, worth EUR 68 billion (USD 107.2 billion). A review of manufacturing in China uncovered that, without technological improvements, 10 per cent of China’s emissions (two per cent of global emissions) in 2020 will come from China’s motor systems alone: To improve China’s industrial efficiency by even 10 per cent would deliver up to 200 million tones CO2e savings.

2) The global emissions savings from smart logistics in 2020 would reach 1.52 GtCO2e, with energy savings worth EUR 208 billion (USD 441.7 billion). In Europe, the logistics industry looks set to grow by 23 per cent between 2002 and 2020.
Through a host of efficiencies in transport and storage, smart logistics in Europe could deliver fuel, electricity and heating
savings of 225 MtCO2e in 2020.

3) Buildings are the second highest consumer of power in the world behind industry. Globally, smart buildings technologies would enable 1.68 GtCO2e of emissions savings, worth EUR 216 billion (USD 340.8 billion). A closer look at buildings in North America indicates that through better building design, management and automation, 15 per cent of North America’s building emissions could be avoided.

4) Smart grid technologies were the largest opportunity explored in the study, and could globally reduce 2.03 GtCO2e, worth EUR 79 billion (USD 124.6 billion). In India, currently over 30 per cent of the generated power is lost through aggregated
technical and commercial losses (AT&C). Reducing these losses in India’s power sector by 30 per cent is possible through better monitoring and management of electricity grids, first with smart meters and then through integrating more advanced ICTs into the so-called ‘energy internet’.

KEY FINDING 3: Getting SMART about ICT

Going forward, the report recommends a SMART framework is implemented, outlining key actions required by the ICT sector, national governments and industry. Transformation of the economy will occur when standardisation (S), monitoring (M) and accounting (A) of energy consumption prompt a rethink (R) in how we optimise for energy efficiency and how we live, work and play in a low carbon world. Through this enabling platform, transformation (T) will occur when the business models that drive low carbon alternatives can be developed and diffused at scale across all sectors of the economy.

Molly Webb, ICT Project Director, The °Climate Group said, “ICT is a vital tool to combat global warming because of its unique ability to make energy visible and communicate the information in real time to business managers who can use this to make valuable efficiency gains. It is certainly possible for ICT to reduce global emissions by 15 per cent by 2020, but by no means inevitable. Although many low carbon technologies already exist, a more integrated policy framework is required to kick start industry action and enable these to be taken to scale.”