How much does digitalization contribute to climate protection?
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Climate Protection Potentials of the Digital Transformation

In the project Climate Protection Potentials of Digital Transformation (CliDiTrans), the climate protection effects of digitisation were analysed on the basis of case studies and macroeconomic considerations.

The digitisation of the economy and society is a key driver of change in the world of life and work. Digitization can lead to significantly more climate protection, but it can also change behavior in such a way that additional emissions are created.

The increasingly decentralised availability and rapidly evolving performance of information and communication technologies (ICT) and the Internet infrastructure are constantly enabling new types of applications. For example, cloud computing, 3D printing, the analysis of large amounts of data in real time (big data) or the intelligent networking and automation of production processes (industry 4.0). Consumption, work and production processes, even industrial structures, are being changed by digitization.

Some studies are calculating the potential for reducing global CO2 emissions through ICT by up to 20 percent by 2030. These studies, however, do not take two essential aspects of increasing digitization into account, or do so only inadequately:

  • First, digitization triggers changes in demand. Completely new products and services are emerging or existing solutions are becoming better quality and cheaper at the same time, so that there is greater demand for them.
  • Secondly, the use of ICT solutions is associated with national and international shifts in production processes.

This is exactly where the planned project came in. Borderstep, the Zentrum für Europäische Wirtschaftsforschung GmbH (ZEW) and the practice partner Zweckverband Kommunale Datenverarbeitung Oldenburg (KDO) have jointly analyzed the climate protection effects of digitisation on the basis of case studies and macroeconomic considerations.

In addition, the possible contribution of digitisation to climate protection was determined, taking into account the possible effects of digitisation on changes in demand and relocation of production.

Core results

Both the ZEW’s microeconomic and macroeconomic analyses and the Borderstep Institute’s impact assessments indicate in equal measure that the use of digital technologies cannot be expected to generate its own momentum in climate protection. Rather, it is essential to set guard rails to bring digitization in line with climate protection goals.

Digitization and energy demand

The analysis of the correlation between increasing digitization and overall economic energy demand confirms that the negative correlation between ICT and energy demand also applies to more recent periods. However, with significantly smaller effect sizes than indicated in the previous literature.

The results of the analysis of the microeconometric evidence for the climate protection potential of digitized production processes also confirm a statistically significant correlation between an increase in software capital intensity and an improvement in energy efficiency at company level. However, the correlation is significantly weaker than estimates using aggregate data. Nevertheless, there is a glimmer of hope, as the effects are more pronounced in very energy-intensive companies and industries.

Determined policy

The example of videoconferencing shows that a determined policy may be necessary to realize the climate protection potential of digital technologies. Home office is a new opportunity whose increased use deeply affects everyday routines. Thus, unpredictable rebound effects could follow increased home office work. As desirable as more home office may be for a good work-life balance, the impact of these multiple changes on climate protection can hardly be quantified in total.

Innovative forces need regulatory incentive

The comparison of the two case studies on climate protection effects through Industry 4.0 (production of electric cars as well as serial refurbishment) shows that the innovative forces of the economy are not released by the technical possibilities alone, but that a clear regulatory incentive is needed for this.

CO2 emissions shift to the manufacturing phase

The studies on private Internet and media use showed that CO2 emissions from the use of individual devices are reduced by more energy-efficient devices. However, households with a high new purchase cycle shift these savings to the manufacturing phase of the respective devices.

Cloud computing and virtualization

The analysis of the case studies on cloud computing and virtualization in companies showed that energy and resource efficiency can be significantly increased with the help of such solutions. At the same time, however, the intensity of use of the solutions in the case studies examined has also increased.

The project was funded by the Federal Ministry of Education and Research (BMBF) within the framework of the funding priority Economics of Climate Change.

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