A new social contract or a mere blank check ?
By: Ricardo Zapata Lopera
Tags: Austerity, Surveillance, Environment, Gig Economy, Digital Transformation

Fourth: zero marginal cost? Digital technologies have a material limit

We have been told that digital technologies are fully scalable. A criterion of infinity is part of the digital mindset. Albert Wenger best described this in his book “World After Capital”, where he suggests that “Once a piece of information is on the Internet, it can be accessed from anywhere on the network for no additional cost”. This is the idea of zero marginal cost.

That additional YouTube video view? Marginal cost of zero. Additional access to Wikipedia? Marginal cost of zero. Additional traffic report delivered by Waze? Marginal cost of zero.

But the material side of the digital is out of this perspective. Think about it in three ways. The direct impacts of the production and use of ICTs (information and communication technologies) on the environment are the most obvious ones. But there are also indirect impacts related to the effect of ICTs on production processes, products, and distribution systems. Finally, there’s also the structural/behavioral impacts related to the stimulation of structural change and growth in the economy by ICTs, and the impacts on lifestyles and value systems. These last two might be positive and negative. This is the framework developed by Berkhout and Hertin back in 2004.

Source: Berkhout, F., & Hertin, J. (2004). De-materialising and re-materialising: digital technologies and the environment. Futures, 36(8), 903–920.

It is striking to look at some direct impacts. The French think-tank The Shift Project estimates that digital technologies would emit 4% of greenhouse gas emissions in 2020 (2,1 GT). That’s half of the emissions of the light vehicles sector (8%) and twice the emissions of air transportation (2%). For example, just video streaming would emit as much CO2 as Spain (300 Mt per year). The troubling aspect is that the global energy consumption of digital media grows by 9 percent per year.

Take the case of revolutionary technologies like blockchain. O’Dwyer and Malone estimated the energy requirements of the Bitcoin Network in 2014. They suggested that the total power used for Bitcoin mining was around 0.1–10GW. As a reference, the average Irish electrical energy demand and production is estimated at around 3GW.

Yet, the problem is not just energy consumption. Waste production from tech hardware is becoming a significant problem. Just in the European Union around 350,000 tons of electronic waste are exported to emerging countries, according to the NGO Basel Action Network. And the number of smartphone devices has skyrocketed. While in 2013 its numbers amounted to 1,7 billion, it is estimated that by 2020 they could increase up to 5,8 billion units. These devices need scarce materials and, yes, the production of one gram of a smartphone still needs 80 times more energy than producing one gram of a car.

Some people will throw out that, with time, we’ll find more efficient ways of production and the direct impacts could be mitigated. But what remains through all discussions about the environmental impacts of digital technologies is a permanent tension between the potential to build a smarter and more efficient economy through digital tech, and the acceleration of the present, traditional economy facilitated by digital technologies. The “Jevons Paradox” better explains this phenomenon.

It tells us that, as unitary costs decrease due to technical advances, consumption also tends to increase, driving total costs to similar levels as before. For example, “on average, when comparing generic online and traditional behaviors, online shopping tends to be more efficient than traditional shopping. However, when taking into account the variability of multiple consumer behaviors, this is no longer the case.” As shown in the following graph, Weideli and Cheikhrouhou estimated that online shopping could even be more polluting than traditional shopping, if shoppers were more impatient and ordered fast shipping.

Source: Weideli, D., & Cheikhrouhou, N. (2013). Environmental analysis of US online shopping. Ecole Polytechnique Fédérale de Lausanne — EPFL: Lausanne, Switzerland.

We could think of managing these types of behaviors by encouraging cleaner modes of shopping. Nevertheless, at the end of the day, can we stop the simplicity digital tech offers to buy with just a click? Andrew McAfee argues our present capitalist system is helping us to be more efficient, but data shows that the increase of human CO2 emissions continues.

Is there no room for austerity in this discussion?