Assessing Energy and Climate Effects of Digitalization: Methodological Challenges and Key Recommendations

Abstract

Digital technologies hold vast potential to help or hinder climate change mitigation. They have been claimed to be a major threat – responsible for a large and growing emissions footprint while accelerating consumption – as well as a critical enabler of emission reductions across sectors. Corresponding estimates are wide-ranging and inconsistent, frustrating public understanding and thoughtful policymaking. For example, published estimates of the lifecycle greenhouse gas (GHG) emissions of the global information and communication technology (ICT) sector for 2015 differ by a factor of 2, while projections for 2025 diverge by up to 25-times. These considerable uncertainties reflect the use of inconsistent – and in some cases, problematic – methodologies. Meanwhile, quantifications of indirect effects of digital technologies diverge even more.

Given the urgency of the climate crisis and vast but uncertain impacts of digitalization, there is a critical need to develop and employ robust and consistent methodologies to assess, review, and evaluate the energy and climate effects of digitalization. To identify key methodological challenges and potential solutions, over 70 leading researchers, practitioners, and policy makers participated in a two-day expert workshop in May 2021. This paper provides essential background on the need for the workshop. It highlights key outcomes, including actionable insights that were put forward by the expert participants.

Day 1 of the workshop focused on the energy and emissions footprint of digital technologies (direct effects), including from raw materials acquisition, production, use, and end-of-life treatment. Day 2 focused on indirect effects resulting from the use of digital technologies across sectors and services, such as efficiency improvements and rebound effects. Each day included two breakout sessions, during which participant subgroups developed short lists of actionable insights for policy makers, industry, researchers, and other stakeholders related to specific methodological challenges. Besides the imperative and over-arching need for access to data and transparency of methods, which was a central theme across all breakout groups, the insights have been synthesized into the following key recommendations:

• All stakeholders must contribute to foundational work to improve consistency in methodology and data, such as developing common terminology and boundaries for central concepts (e.g., digital sector, machine learning, the Internet) and taking stock of existing data gaps and quality issues. They also need to contribute to validating models, conducting reality-checks on data, and transparently addressing uncertainties.

• Intergovernmental organizations and standardization bodies should increase engagement with academia and industry to raise awareness and promote the use of existing standards (e.g., ITU L.1410 and L.1450). Standards and protocols can play a key role in promoting methodological consistency.

• Companies along digital technology value chains should improve the systematic collection and public reporting of timely and high-quality data. Consistent and systematic disclosure of data requires new systems and channels encompassing the entire digital value chain.

• Policy makers and regulators can also play an important role in requiring the consistent and comprehensive collection of data across the ICT sector. Solid data provide an essential foundation for crafting sound policies and regulations, but policy makers also need to better understand LCA opportunities and limitations.

• Researchers must work to increase the rigor of peer reviews and improve methodologies, including evaluation of rebound effects from digitalization and potential measures to counteract undesirable effects. Further work is needed on the complexity of baselines for assessing indirect effects.

• Researchers should engage in development of methods for prospective modeling that integrate a deeper understanding of future technology usage by changing industries and societies.

• Diverse perspectives from across disciplines are needed to develop robust criteria for case studies and their system boundaries. Specific but consistent methodologies provide complementary benefits – while comprehensive studies can yield robust conclusions, smaller ones may provide initial insights and advance methodological approaches.

• All actors should consider the requirements on studies in relation to their purpose and handle methodology choices and trade-offs accordingly. Accuracy depends on the research question –qualitative results and magnitudes can be more important than the precise impact.

Adopting these recommendations can increase consistency and robustness of estimates, while helping to identify key levers to maximize the potential benefits of digitalization while minimizing its risks. Progress will require coordinated and complementary efforts from policy makers, industry, researchers, and other organizations.

Keywords: Information and Communications Technology (ICT), digital economy, digitalization, digital technology, methodology

JEL Classification: Q55, Q56