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Digitalization is key to snap the link between higher GDP growth and rising carbon trails. Higher economic growth is a perennial imperative worldwide. However, industrialization, urbanisation and modern development are all accelerating global warming and climate change – with disastrous consequences. Clearly, there is no alternative to individuals, institutions and industries collectively reducing their carbon trail if global warming is to be contained initially and reversed later.
While multiple solutions are being pursued in lowering the planet’s carbon trail, a single, overarching stratagem is required to make a substantial, sustained impact towards this goal. In recent years, it is increasingly apparent that digitalization harbours the potential to reverse the dangerous trend of higher growth leading to higher carbon trails.
Reversing Global Warming
The link between industrialization and global warming cannot be denied or down played. Going by empirical evidence, a one percent rise in global GDP triggers a 0.5 percent increase in carbon emissions, contributing to resource scarcity. A World Economic Forum report highlights that by 2030, present business practices can contribute to a worldwide demand-supply gap of eight billion metric tons (MT) in natural resources. In turn, some USD 4.5 trillion of economic growth will be lost by 2030.
One needs to view the role of digital transformation in combating CO emissions in this context. According to a World Economic Forum report, between 2016 and 2025, it is estimated that digitalization can potentially prevent an estimated 26 billion MT of total CO2 emissions from three sectors, i.e., electricity (15.8 billion MT), logistics (9.9 billion MT), and automotive (540 million MT). Incidentally, entire Europe is expected to emit an almost equal amount of emissions in the same period. Such CO2 reductions could then be a game changer.
It is important to do a deep dive in order to understand the role of digitalization in lowering carbon footprint. The first thing digitalization does is bring-in efficiency in operations. This ensures faster turnaround times, higher and better deliverables, while simultaneously using lower amounts of energy in diverse industries. In the case of electricity, digitalisation drives higher energy efficiency. As some 50 billion devices are likely to be connected by 2020, Big Data and IoT
(Internet of Things) are now playing a greater role in promoting efficiency and operational sustainability, according to a BSA Foundation report.
Based upon smart connectivity, the real-time tracking of energy assets permits prudent use and more informed decision-making, which includes the linking of energy use to consumers’ behaviour, further enhancing efficiency. In the digital era, automation, Big Data and data analytics can jointly ensure better energy management by boosting efficiency, as well as the productive deployment of energy and other resources.
Driving Sustainable Solutions
It is important to do a deep dive in order to understand the role of digitalization in lowering carbon footprint
In promoting a more sustainable future, the ‘3Ds’ represented by digitalization, decarbonization and decentralization are steering the convergence of how companies purchase power, use energy and then operate sustainably. This is only possible via a multi-dimensional view comprising efficiency, supply and sustainability – all of them being crucial in active energy management. In the case of digitalization, it offers an opportunity to optimize the entire value chain right from generation to consumption, ensuring higher efficiency, more control and better value for resources.
As for decarbonization, it offers another great opportunity for improving energy efficiency and the sustainability of operations. Consider the energy grid. Going by experience, thrice the decarbonization can be delivered by the demand side compared to the supply side. Decarbonization in companies can be promoted by creating a sustainability index, which tracks the carbon footprint of all products, activities and services available. Subsequently, awareness about any inefficient products or services can help organizations innovate and produce those offering higher energy efficiency. Thereafter, companies can work towards becoming more carbon neutral, which will help in creating a more sustainable, greener planet.
The last ‘D’ in creating a greener Earth is decentralization. Opportunities in this connection are rising universally in various market segments such as solar, smart grids, microgrids and grid automation. With renewable energy prices becoming more affordable and reaching new lows even as better storage solutions appear, decentralization will inevitably grow.
In undertaking these sustainable solutions however, we should not miss the wood for the trees. It is important to note that digital can leave its own carbon trail. There is a misconception that data stored on the Cloud is stored virtually when it is actually saved on huge servers or data centres, some of them the size of football fields. These centres need tremendous electricity to keep them running 24x7x365. Unfortunately, most of this energy comes from fossil fuels or coal-generated power. In other words, digital means have a CO2 trail too, even if proportionately lesser than the other carbon footprints.
Therefore, the ultimate use of 100 percent clean energy at the earliest possible is critical. On a practical level though, it is not possible to discontinue the use of polluting fossil fuels immediately since renewables (solar, wind and biomass) have their own challenges for mass deployment. These barriers can lead to supply-and-demand mismatches, which mean higher production costs. But the current challenges can be overcome sooner or later via means such as smart meters, smart grids, and others that can eliminate these hurdles.
The advent of AI (artificial intelligence) may speedup the search for solutions in the mass production and convenient storage and consumption of renewable energy. The ultimate success of digitalization in ushering a green world would then become a worldwide reality.