Digital trade and the environment

1 Oct 2021 12:00h

Event report

The session covered the environmental impacts of digital technologies and the potential of digital trade provisions to support effective climate action. Several proposals were made for future negotiations on digital trade and the environment. Ms Sabina Ciofu (Head of EU and Trade Policy, techUK) opened the discussion by saying that the digital trade agenda and digitalisation can be a powerful tool but that uncertainties remain on what the best steps are for trade to support climate action.

According to Mr David Jensen (Coordinator of the Digital Transformation Task Force, United Nations Environment Programme) a fundamental structural shift in the global economy is happening. More than 4 billion people are connected, digital sectors like gaming and e-commerce are growing, digital value chains are shifting and with it the consumer behaviour and incentives. This shift offers a chance for novel climate action, Jensen said. The supply chains can be more transparent as they digitalise, and data insights can show how economic incentives drive specific behaviour towards either carbon-intensive or net-zero behaviour. Jensen stressed the importance of digital feedback loops (e.g. guide us towards a circular economy through the supply chain, by reducing natural resource consumption) and digital nudging (e.g. reducing algorithmic persuasion towards more consumption). Additionally, guidelines for digital data disclosures, standardisation, enabling frameworks for calculating carbon footprint across the supply chain, and digital product passports are all needed.

However, the root requirement is to have a better understanding, reliability, and trustworthiness of climate data. Ms Natasha McCarthy (Head of Data Policy, The Royal Society) talked about bringing together climate scientists, technologists, policymakers, and consumers. ‘Climate science efficacy can guide policy – we need better, granular data on emissions to understand specific impacts of climate interventions’, McCarthy said. Data can be a tool for better policymaking but also for reliable advice to consumers. Essentially, it should be treated like essential public infrastructure. Revealing carbon footprint, embedded carbon into devices, and even carbon resulting from services such as online streaming can jointly make an impact. She echoed Jensen’s point on creating digital feedback loops and added that creating digital twins of each sector can better explain what is happening across the board. McCarthy also reminded that data trusts and data commons can facilitate insight when commercially or personally sensitive data is in question.

Shifting focus to the energy sector perspective, Mr Georgia Kamiya (Digital/Energy Analyst, International Energy Agency) highlighted several promising trends when it comes to decarbonisation. Despite the rise in the global Internet traffic, energy efficiency is ensuring that the ICT sector’s emissions remain flat. According to Kamiya, it is largely a story of energy efficiency and increasing supply of low-carbon electricity to power the devices. Also, the unique ability of the ICT sector to decarbonise faster and make a rapid turnover towards new, emerging, greener technology should be considered. Research and development is opening up solutions for a more sustainable life cycle from materials extraction, manufacturing, transportation, and the end of life. In terms of trade policy, because ICT is so electrified, trade agreements can help keep data centres local and powered in a low carbon manner by including aspects on carbon electricity trade. Besides the direct impacts, indirect effects that can reduce emissions from transportation and physical building, such as e-commerce or teleworking, should be addressed.  

Going back to the digital product passports, Ms Veera Johnson (Co-Founder, Circulor) talked about the needs of climate tech companies. The biggest challenge is in the policy trade conversations that do not yet enable traceability across the supply chain. Johnson pointed out second use or recycling as key to the future circular economy. Digital product passports would enable traceability. The second step in scaling up should be to focus on common standards for carbon offset, as noted by Jensen, and the help in tracing the source of origin, as well as the rules for extended use and responsibility.

Lastly, innovation was mentioned. Jensen pointed out that bridging the digital divide will have a massive energy footprint and that right innovation can facilitate the transition. Innovation will drive more efficient technologies in the energy-heavy sectors like aviation Kamiya said, and Jensen added that innovation in business models can ensure digital public goods in line with the value of sustainability.

The session covered the environmental impacts of digital technologies and the potential of digital trade provisions to support effective climate action. Several proposals were made for future negotiations on digital trade and the environment. Ms Sabina Ciofu (Head of EU and Trade Policy, techUK) opened the discussion by saying that the digital trade agenda and digitalisation can be a powerful tool but that uncertainties remain on what the best steps are for trade to support climate action.

According to Mr David Jensen (Coordinator of the Digital Transformation Task Force, United Nations Environment Programme) a fundamental structural shift in the global economy is happening. More than 4 billion people are connected, digital sectors like gaming and e-commerce are growing, digital value chains are shifting and with it the consumer behaviour and incentives. This shift offers a chance for novel climate action, Jensen said. The supply chains can be more transparent as they digitalise, and data insights can show how economic incentives drive specific behaviour towards either carbon-intensive or net-zero behaviour. Jensen stressed the importance of digital feedback loops (e.g. guide us towards a circular economy through the supply chain, by reducing natural resource consumption) and digital nudging (e.g. reducing algorithmic persuasion towards more consumption). Additionally, guidelines for digital data disclosures, standardisation, enabling frameworks for calculating carbon footprint across the supply chain, and digital product passports are all needed.

However, the root requirement is to have a better understanding, reliability, and trustworthiness of climate data. Ms Natasha McCarthy (Head of Data Policy, The Royal Society) talked about bringing together climate scientists, technologists, policymakers, and consumers. ‘Climate science efficacy can guide policy – we need better, granular data on emissions to understand specific impacts of climate interventions’, McCarthy said. Data can be a tool for better policymaking but also for reliable advice to consumers. Essentially, it should be treated like essential public infrastructure. Revealing carbon footprint, embedded carbon into devices, and even carbon resulting from services such as online streaming can jointly make an impact. She echoed Jensen’s point on creating digital feedback loops and added that creating digital twins of each sector can better explain what is happening across the board. McCarthy also reminded that data trusts and data commons can facilitate insight when commercially or personally sensitive data is in question.

Shifting focus to the energy sector perspective, Mr Georgia Kamiya (Digital/Energy Analyst, International Energy Agency) highlighted several promising trends when it comes to decarbonisation. Despite the rise in the global Internet traffic, energy efficiency is ensuring that the ICT sector’s emissions remain flat. According to Kamiya, it is largely a story of energy efficiency and increasing supply of low-carbon electricity to power the devices. Also, the unique ability of the ICT sector to decarbonise faster and make a rapid turnover towards new, emerging, greener technology should be considered. Research and development is opening up solutions for a more sustainable life cycle from materials extraction, manufacturing, transportation, and the end of life. In terms of trade policy, because ICT is so electrified, trade agreements can help keep data centres local and powered in a low carbon manner by including aspects on carbon electricity trade. Besides the direct impacts, indirect effects that can reduce emissions from transportation and physical building, such as e-commerce or teleworking, should be addressed.  

Going back to the digital product passports, Ms Veera Johnson (Co-Founder, Circulor) talked about the needs of climate tech companies. The biggest challenge is in the policy trade conversations that do not yet enable traceability across the supply chain. Johnson pointed out second use or recycling as key to the future circular economy. Digital product passports would enable traceability. The second step in scaling up should be to focus on common standards for carbon offset, as noted by Jensen, and the help in tracing the source of origin, as well as the rules for extended use and responsibility.

Lastly, innovation was mentioned. Jensen pointed out that bridging the digital divide will have a massive energy footprint and that right innovation can facilitate the transition. Innovation will drive more efficient technologies in the energy-heavy sectors like aviation Kamiya said, and Jensen added that innovation in business models can ensure digital public goods in line with the value of sustainability.