Climate change and ICT

Stephen Young, Principal Analyst

The Stern Review

On 30 October 2006, the UK government published a 579-page report on the economics of climate change by Sir Nicholas Stern, a former chief economist at the World Bank. Stern says that 'climate change is the greatest market failure the world has ever seen' and shows that the world economy will suffer a serious blow if action to slow down climate change is not taken soon. According to Stern, 'There is still time to avoid the worst impacts of climate change, if we take strong action now.' Despite the massive size, scope and authority of the report, there is no reference to the role that the ICT sector could play in helping to reduce energy demand, mitigate CO2 emissions and help to save the planet.

Stern was commissioned to carry out his review a year ago by Gordon Brown, the UK's Chancellor of the Exchequer and Prime Minister-in-Waiting. The Stern Review is probably the most comprehensive, rigorous and terrifying report ever published by a finance ministry.

It points out that carbon emissions have already increased global temperatures by more than 0.5°C and that with no action to cut greenhouse gases, we will warm the planet another 2-3°C within 50 years. This will transform the physical geography of the planet and the way we live, with floods, disease, storms and water shortages becoming more frequent.

Turning to the economics, the effects of climate change could cost the world between 5% and 20% of GDP, prompting the worst recession since the 1920s. Action to reduce greenhouse gas emissions and the worst of global warming would cost 1% of GDP. With no action, each tonne of carbon dioxide we emit will cause at least $85 (£45) of damage.

At the launch of the review Tony Blair commented, 'Without radical measures to reduce carbon emissions within the next 10-15 years, there is compelling evidence to suggest we might lose the chance to control temperature rises.'

Stern proposes that levels of CO2 in the atmosphere should be limited to the equivalent of 450-550ppm, and that to achieve this, policy should include carbon pricing, international agreements and new technology.

But ICT barely gets a mention in the Stern Review. The sections covering innovation and new technologies are mainly concerned with de-carbonising energy production and road transport, and the only reference to ICT relates to the energy consumption of appliances like set-top boxes. This is surprising, since ICT products, services and applications have massive potential to reduce climate change in other industrial and domestic sectors, particularly transport, through a reduction in their carbon emissions.

Victims, villains or heroes?

It can help to think of ICT players as either victims, villains or potential heroes of climate change, and it is the latter dimension that Stern seems to miss.

For example, telcos are as likely to be victims of climate change as other network infrastructures, and are already suffering the effects of global warming due to the increasing frequency of severe weather effects. As villains of climate change, telcos use energy to power the telecoms network, to heat and cool buildings, to protect equipment and for transport. But telecommunications is less energy-intensive and carbon-heavy than many other industries. Stern points out that telecoms generates 2.29% of UK economic output, with only 0.82% of the sector's total costs coming from energy.

The deployment of next-generation networks (NGNs) will further reduce telcos' energy usage, but what about the services and applications that sit on the new infrastructure? The rapid growth of web-based services is driving up power demand and CO2 emissions: it is now estimated that the total electricity used in powering and cooling the 2 million servers of the five major search engines is around 5 gigawatts - almost enough to power the Las Vegas metropolitan area on the hottest day of the year. Many telcos and service providers are now implementing specific actions to reduce their carbon emissions by measuring, reducing and offsetting their CO2 emissions.

BSkyB goes carbon neutral

As well as the telcos, which are already acting to cut carbon emissions, one of the new-wave communications companies is leading the field: digital entertainment platform BSkyB went carbon neutral in May 2006. The company said that this was the start of a commitment to engage Sky's 8.1 million customers with 'practical and inspiring ways to become better informed and more progressive about energy use.' We haven't yet seen what this means in practice, but Sky is stepping into what seems to be a gap between the ICT sector and the need to reduce CO2.

The gap was highlighted in another report published earlier this year, a joint initiative by the association of European Telecoms Network Operators and the World Wildlife Fund. The report, Saving the climate @ the speed of light: ICT for CO2 reductions, noted that no strategy to support the use of ICT to reduce CO2 emissions exists at the EU level, or anywhere else for that matter.

The report was described as an attempt to bridge the gap between the ICT experts and the policy makers in both politics and business. The WWF said it firmly believed that these groups, together with the rest of society, need to talk more frequently and openly to each other if we want to create a sustainable framework for ICT development.

The report noted that ICT could be an important part of the solution for combating climate change in Europe, recommended that key sector actors have a climate change strategy and advocated concrete ICT climate change programmes be initiated by 2007.

As the report says, the strategic use of ICT can contribute significantly to energy efficiency (which Stern does pick up on), sustainable economic growth and job creation. ICT can reduce the need for travel and transportation of goods by bridging distance. It can increase efficiency and innovation by allowing people to work in more flexible ways, and can ensure a shift from products to services, and allow for dematerialisation (Negroponte's 'bits instead of atoms') of the economy. All of which should help to lower carbon emissions.

Let's get practical: ICT and cutting carbon

The ETNO/WWF report notes that ICT can be an important part of combating climate change, and should be engaged because it is a sector that is used to rapid changes and employs many creative people. The report outlines a roadmap for the ICT sector, and sets out targets for 2010 and 2020. The target for 2010 is to use ICT to reduce CO2 emissions by 50 million tonnes.

ETNO has collected the results from some third-party verified projects and come up with the following examples of how ICT can help to reduce CO2 emissions:

• video conferencing: if 20% of business travel in the EU 25 was replaced by video conferencing, this would save 22.3 million tonnes of CO2
• audio conferencing: if 50% of EU workers replaced one meeting with one audio conference a year, this would save 2.2 million tonnes of CO2
• flexi-work: if 10% of the EU 25 workforce were to become flexi-workers, this could save 22.17 million tonnes of CO2 a year
• online billing: 100 million customers receiving online phone bills would save 109,100 tonnes of CO2
• web-based tax returns: 193 million web-based tax returns would save 195,000 tonnes of CO2.

Another week, another climate change meeting

During 6-17 November 2006, 189 governments will meet in Nairobi, Kenya, to produce a clear plan for the Kyoto Protocol's post-2012 emission reduction targets. It would be a pity if ICT again fails to make an appearance.