BusinessMirror December 16, 2023

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The price of digitalization Data-driven tech can make some vital tasks more efficient, but digitalization’s impacts—raw material depletion, pollution and waste, and energy and water use—must also be considered, says Unctad.

COOLING towers at the Google Data Center in Eemshaven, the Netherlands. RUDMER ZWERVER | DREAMSTIME.COM

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By Andrea E. San Juan

ITH countries embracing digitalization as a strategy to boost economic growth, governments and businesses are prodded to tackle the costs that come along with this ongoing evolution in technology.

“Data-driven technologies like the Internet of Things, robotics and artificial intelligence (AI) can enhance climate-change monitoring, optimize energy use and production processes, and promote lowemissions technology adoption,” according to the United Nations Conference on Trade and Development (Unctad). However, Unctad said in an article published on its website on December 7 that digital transformation has “left its mark” on the planet through raw material depletion, energy and water use, pollution and waste. Torbjorn Fredriksson, head of Unctad’s e-commerce and digital economy branch, said, “We are at a crucial juncture, where the path we choose in digitalization will significantly impact our environment and, ultimately, the future of our planet.” In fact, the United Nations’ trade and development arm said that since 2010, global Internet users have more than doubled and data traffic has expanded 25-fold. “An increase in online activities like streaming videos and downloading files demands more energy and generates more emissions,” Unctad said. Unctad also cited the International Panel on Climate Change which said that data centers and networks powering online and cloud services generate an esti-

PASCUAL: “Policies promoting green technology, penalizing unsustainable practices, and encouraging responsible consumption can help mitigate the environmental costs of digitalization.”

mated 1 percent of global energyrelated greenhouse gas emissions (GHG). And devices, data centers and ICT networks account for 6 to 12 percent of global energy use. It added that “emerging” digital services and technologies such as cloud gaming, blockchain and virtual reality are set to further increase demand for data services. On the e-commerce aspect, the United Nations’ trade and development arm cited Global Findex database, saying an estimated 2.3 billion people worldwide shopped online in 2021, up 68 percent from 2017. “The conveniences of e-commerce come with environmental costs, such as the waste created by the stream of packages and the

GHG emissions from last-mile delivery and returns,” Unctad said. Meanwhile, electronic waste, or e-waste, from the constant flow of new gadgets and devices, is also a “growing concern,” noted Unctad. The latest Global E-waste Monitor reported a 21-percent increase in global e-waste from 2014 to 2019, reaching 53.6 million metric tons, primarily originating in developed countries. That amounts to roughly 7 kilograms per person annually—a figure that could double by 2050, said Unctad. “Sadly, only 17 percent of ewaste is properly recycled. Improper disposal can contaminate soil and water sources,” Unctad said. With these consequences, Unctad underscored the importance of setting a “precedent” for future technologies. “We must consider the digital and environmental transitions together,” Fredriksson said. For his part, World Wide Waste author Gerry McGovern stressed the importance of governments and businesses working together to tackle the environmental impacts of digitalization.

DTI chief recognizes ‘costs’

THROUGH the Philippine government’s lens, Trade and Industry Secretary Alfredo E. Pascual recognized the costs of embracing digital economy. “The growing environmental impact of the digital economy is a complex and multifaceted issue,” Pascual told the BusinessMirror in a Viber message. He said that when evaluating the environmental costs of digitalization, it is crucial to consider both its direct and indirect effects on climate action and the environment. For one, he said, the analysis should consider the “direct environmental impact” of digitaliza-

tion as this “involves the consumption of resources, including energy for data centers, manufacturing of electronic devices, and the disposal of e-waste.” In contrast, Pascual recognized the “indirect environmental benefits” of the advancement of digitalization. “On the other hand, digitalization can lead to more efficient resource use, lower carbon emissions, and enhanced environmental monitoring. For example, digital technologies can optimize energy use in various industries, enhance remote working [thus reducing commuting emissions], and improve the efficiency of renewable energy sources,” the Philippines’ trade chief said. In weighing the pros and cons, it is essential, Pascual said, to compare the environmental costs of digitalization with the costs of achieving similar economic outputs without digital technologies. The country’s trade chief said this comparison should take into account these factors: resource efficiency, emission reductions, and long-term sustainability. For resource efficiency, Pascual deems it important to ask, “Are digital solutions more resource-efficient than traditional methods?” In reducing emissions, he said it should be considered if digital technologies enable “significant” reductions in greenhouse gas emissions. In terms of sustainability, Pascual said it is crucial to contemplate if digitalization will lead to more sustainable practices and business models in the long run. To measure the impact of digitalization, he also stressed the importance of conducting a “comprehensive lifecycle analysis” on the digital products and services from production to disposal. Pascual also cited the importance of considering the potential

for innovation within digital technologies to reduce their environmental impact. This, he said, includes advancements in “energy-efficient” hardware and data centers, renewable energy sources for powering data centers, and better recycling methods for electronic waste. He emphasized that while these actions are already happening now, it still needs to be intensified.

Regulators’ role

MEANWHILE, the country’s trade chief highlighted that governments and regulatory bodies play a crucial role in shaping the environmental impact of the digital economy. “Policies promoting green technology, penalizing unsustainable practices, and encouraging responsible consumption can help mitigate the environmental costs of digitalization,” he said.

Along with this, he noted that the public and corporations also have to be held accountable as they should also track their environmental footprint. “Educating the public and holding corporations accountable for their environmental impact are crucial steps. Consumers and businesses need to be aware of the environmental footprint of digital services and products and make informed choices, including e-commerce,” Pascual said. While digitalization comes with a cost, he noted, “Its potential to drive more efficient and sustainable economic models should not be overlooked.” He emphasized that a “balanced and nuanced” approach, considering both the costs and benefits, is “essential for harnessing the potential of digital technologies to support climate action.”

PESO EXCHANGE RATES n US 55.6890 n JAPAN 0.3926 n UK 71.0981 n HK 7.1329 n CHINA 7.8326 n SINGAPORE 41.9471 n AUSTRALIA 37.2949 n EU 61.2301 n KOREA 0.0432 n SAUDI ARABIA 14.8456 Source: BSP (December 15, 2023)


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