CSR Market Analysis

Digital services: A problem or a solution for climate challenge?

Tue 29 Jun 2021

Digital services: A problem or a solution for climate challenge? A preliminary response based on a quantitative approach

Digital services have been indicted for contributing to climate change, and in early 2020, Alternatives Economiques magazine titled “The unsustainable growth of digital”. The digital boom certainly exacerbates the carbon footprint, but can it also be part of the solution? How can we rigorously study its impact?

The carbon footprint measures the greenhouse gas (GHG) emissions caused by population consumption. Unlike emissions produced accross the territory, the carbon footprint includes GHG emissions associated with imported goods and services, and excludes those associated with exported ones.

The carbon footprint and “imported” emissions

The French carbon footprint, for example, can be broken down as follows:

  • Domestic production of goods and services (27%) includes the energy consumed (e.g. gas) to heat industrial buildings, power electrical equipment (mobile antennas) as well as the gasoline needed to run business vehicles
  • Import of raw materials and products (57%) includes the carbon consumed abroad to extract imported minerals (from Australia for example) but also the carbon emitted by Chinese coal to produce consumer goods (machine tools, smartphones,...) sold in France
  • Direct household energy consumption (16%) includes emissions from homes (electricity, heating) and individual transportation

This footprint can be further broken down by consumed products. Thus, we can define a “digital” perimeter that includes telecom and IT services.

The carbon footprint of the digital sector, mainly from imported emissions

Translated into digital services, we will count in the domestic production the emissions related to the telecom operators' network power supply in France (mobile, fiber) as well as the companies' IT and telecom services in France (private networks, data centers) - This accounts for 10% of the footprint. Imported emissions represent 80% of the emissions. They essentially involve all equipment produced in Asia, in addition to the impact of data centers located abroad. Households emit the remaining 10%, by powering televisions and boxes at home.

The total French carbon footprint was estimated in 2018 at 749 Million Tons of CO2, and that of digital services at around 12MTC02 equivalent to 1.7%. Most of the digital carbon footprint comes from electricity. This energy is used to power equipment in France with nuclear energy but also to build them in China with a very carbon intensive electricity.

The positive impact of digital: Abatement

Digital services are also part of the solution because they help avoid emissions. The IPCC predicts an “abatement” impact of various initiatives, including digital.

The positive effects on the climate are calculated based on a series of “use cases”. One example is to examine how “smart meters” or “remote control of air conditioning” can save energy. Various bodies or researchers have carried out global studies. Their results show a positive impact of the digital of around 4 to 8%, but some go much further, such as GESI, which announces 20%.

The most impacted sectors are

  • Transportation (smart cities) thanks to oil consumption savings following the use of autonomous electric cars, intelligent traffic regulation, and car sharing practices;
  • Energy with solutions for optimized use (savings), production of electrical energy (less waste) and management of renewable energies (SmartGrid)
  • the decline in business travel thanks to the development of collaborative solutions
  • the industry can benefit from logistics automation of connected factories, reducing the movement of machinery or streamlining recycling processes.

We can venture to apply these solutions to the French carbon footprint by applying these formulas to the three categories: production, imports and consumption.

The “net” footprint and the specifics of France

Based on the GSMA's extensive analysis, the gains would come mainly from transportation, which accounts for a share of emissions in France (29%) larger than the European average (21%). A quarter of the estimated gains would come from the decrease in traffic brought about by the use of collaboration solutions (video conferencing) and another half from connected mobility solutions linked to IoT (carpooling, traffic management, etc.). The total reduction would be 10%, which would be applied to the 125MtCO2 of road transport and the 23.4MtCO2 of air transport. This represents -3% for companies and -6% for households.

The gains related to power energy are not very significant in France due to the predominance of low-carbon nuclear energy.

The abatement effect on imported emissions mainly involves the manufacturing processes of Chinese smartphone factories, which essentially consume electricity. We have selected a rate of -2.4% inspired by the GSMA, quite far from the GESI figure ...10 times higher.

Digital Carbon Footprint 2018- France

 

Domestic

production

Imports

Households

Total

Total  MtCOE (2018)

201

425

123

749

Numérique MtCOE (2018)

1,5

9,7

1,4

12,6

Part du numérique (en %)

0,7%

2,3%

1,1%

1,7%

 

Digital Services Abatement 2018 – France

 

Domestic

production

Imports

Households

Total

Total  MtCOE (2018)

201

425

123

749

Abattement MtCOE (2018)

-7,0

-10,2

-7,0

-24,2

Abattement (en %)

-3%

-2,4%

-6%

-3,2%

 

“Net” carbon footprint 2018 – France

 

Domestic

Production

Imports

Households

Total

Empreinte Numérique

1,5

9,7

1,4

12,6

Abattement

-7,0

- 10,2

- 7,0

- 24,2

Total

-5,5

- 0,5

-    5,6

-11,6

 

Different visions

In conclusion, while the digital footprint is starting to be relatively well known, this is not the case for abatements.

On the other hand, we must not lose sight of the fact that emissions are always localized. Thus a purely local vision or a purely global vision offer quite different realities.

In a world of low-carbon electricity, the digital footprint is lower and the benefits of abatement are mainly concentrated on transport. The balance sheet can thus appear very positive locally.

But the majority of emissions are imported; they depend on how Asia manages its electricity mix and uses digital technology to optimize (from an emissions standpoint) its industrial and logistics processes which ultimately hold the key to digital’s net carbon footprint.

Référence:

  1. L'insoutenable croissance du numérique - Justin Delépine - 15/01/2020 - Alternatives Economiques n°397
  2. Commissariat Général au Développement Durable - Chiffres clés du climat – France, Europe et Monde – 2019
  3. GESI- #SMARTer2030 – ICT Solutions for 21st Century Challenges – 2015
  4. GSMA – The Enablement Effect – 2020
  5. Conseil Général de L’Economie – Réduire la consommation énergétique du numérique -2020

 

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David Erlich

Advisor Director