Is The Digital Economy Green? AI, Blockchain, & Sharing Platforms
Digital technologies have steadily woven themselves into the global economy, transforming the pace at which individuals are able to access and process information. According to the Bureau of Economic Analysis, the digital economy accounted for 9% of the US gross domestic product in 2018. Now the 4th largest sector in the US, digital services are rapidly expanding our energy and environmental footprint while promising broad societal benefits. For example:
Can sharing platforms help reduce food waste?
Does ride-hailing generate more greenhouse gas emissions?
How much direct energy is needed to run blockchain applications?
What benefits can artificial intelligence bring to more traditional industries?
Let’s look into the research that the Project on the Energy and Environmental Implications of the Digital Economy produced to learn more about ways the digital economy is and isn’t green, shall we?
The Project research was a way to expand the understanding of the digital and environmental nexus, to estimate the impacts of real-world applications, and to propose governance options for the sustainable adoption of digital technologies.
Environmental Law Institute Visiting Scholar David Rejeski helped launch the Project 4 years ago and noted that:
“… governments are spending only a fraction of the funding necessary to unravel the environmental impacts of our digital lives. Our society needs to develop an empirical grounding for assessing both the positive and negative impacts of information technologies, especially as they become more ubiquitous and invisible.”
A series of research papers have been released, contributing important insights to an emerging body of knowledge on 3 key technologies:
Artificial Intelligence (AI)
Artificial Intelligence & the Digital Economy
The chemical industry is responding to increased energy demand and environmental performance expectations by exploring the use of emerging technologies in the manufacturing process. AI is one of these technologies, which shows great potential in reducing the energy consumption and environmental footprints of the chemical industry. Researchers determined that, although AI shows great potential in enhancing the sustainability of the chemical industry, it is challenging to quantify the benefits and impacts of AI adoptions due to the lack of system analysis methods and assessment metrics.
Quantitative understandings of the benefits of AI adoptions are critical information for policymakers and early adopters of emerging technologies, whose investments are crucial. Addressing these methods and analysis gaps is critical for improving emerging technology adoption such as AI. The authors developed a framework to aid in quantifying and assessing the environmental impacts of AI in the chemical manufacturing industry, hoping to address the dearth of studies on the topic.
Blockchain & Challenges
Corporate decisions are driven by information. Information volume — big data — is growing quickly, bringing greater organizational challenges in making sense of information necessary for managing their networks and supply chains. Blockchain technology is a disruptive information-based technology incorporating characteristics of decentralized “trustless” databases and ledgers, allowing for global-scale transactions, process disintermediation, and decentralization among supply chain entities.
Blockchain technology can support information required for timely provenance of goods and services in a secure manner that is clear and robust enough to trust, creates more effective information flow in the supply chain, and evolves a product-based economy to an information-customization economy.
Between now and 2023, the global blockchain in supply chain market is estimated to reach a total valuation of $424 million and an over 48% growth rate. This substantial market growth will occur as a significant fraction of companies seeks to benefit from blockchain technology within their supply chain and its sustainability.
The authors determined that a deeper understanding of how these blockchain solutions are to be operated and by whom must be sought. They developed several propositions suggesting important links between organizational, technological, and external concepts for blockchain adoption. They also attempted to systematically investigate and prioritize the barriers to blockchain technology adoption in sustainable supply chains from the lens of 2 groups of stakeholders: organizations and supply chains.
Sharing Platforms & Green Goals
A series of different research studies analyzed the degree to which sharing platforms currently work toward green goals in today’s digital economy.
- One paper sets out feasible paths for quantifying the GHG emissions impact of ride-hailing, a service that warrants consideration as a transportation mode and emissions source distinct from automobiles generally.
- Another paper found that electrifying ridehailing vehicles would deliver 3X to 4X faster payback, environmental benefits, and greater life cycle cost savings compared to private vehicles.
- Although there is a small yet expanding body of research focused on frameworks for building equitable platform cooperatives, there has been little to no work thus far examining how existing platform cooperatives actually operate and govern themselves, in reality. A third paper described how truly peer-to-peer ridesourcing services are feasible and may have stronger incentives to reduce emissions from deadheading — completing a trip without passengers.
- Researchers who had focused on the impacts and benefits of ride-hailing platforms discussed their results during an online webinar on Ride-Hailing & the Future of Sustainable Transportation.
- Another paper reviewed the success of a peer-to-peer food-sharing app and suggests that the sharing economy may offer powerful means for improving resource efficiency and reducing food waste. The research team concluded that gaining a better understanding of supply, demand, user behavior, and network dynamics of food sharing platforms is an important step toward answering many open questions regarding the environmental impacts of sharing activities, their potential welfare effects, and the drivers behind their adoption — or lack thereof.
Final Thoughts about the Greening of the Digital Economy
The Environmental Law Institute, in partnership with the Center for Law, Energy & the Environment at UC Berkeley, and the Yale School of the Environment, formed this Project on the Energy and Environmental Implications of the Digital Economy. Supported by the Alfred P. Sloan Foundation, this research is at the core of ELI’s Innovation Lab, a venture focused on supporting high impact research that can drive improved environmental governance and performance.
Sloan Foundation program director Evan Michelson said,
“Digital technologies like blockchain and artificial intelligence have enormous potential to help decarbonize the energy system and address climate change, but only if we deploy them correctly. The key question is: How do we best develop 21st century technologies in ways that help move us toward a low-carbon future? There remain many unanswered questions that need more attention from scholars and funders, but these studies are an important step in improving our understanding of these issues.”
The Innovation Lab explores breakthroughs in science, technology, and policy that promises to reshape the future of sustainability; investigates feasible governance mechanisms; and works to build interdisciplinary communities of practice. In addition to exploring the relationship between the digital economy and the environment, the Innovation Lab is advancing an understanding of a future governance role of these technologies, with a particular focus on the role of algorithmic decision making.