UN warns digital economy drive damaging environment

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The drive towards a digital economy comes at an environmental cost, the United Nations warned Wednesday, with big data centers consuming vast amounts of water and energy.

While digitalization fuels global economic growth, its environmental repercussions are becoming “increasingly severe”, the UN trade and development agency UNCTAD said in a report.

The agency called for sustainable strategies to counter the growing environmental toll, particularly in developing countries.

“Digitalization continues to move at warp speed, transforming lives and livelihoods. At the same time, unregulated digitalization risks leaving people behind and exacerbating environmental and climate challenges,” UN chief Antonio Guterres said in the report.

He cautioned that increased reliance on digital tools was directly impacting the environment, from depleting raw materials, consuming water and energy, spewing air pollution, and generating waste.

“These are accentuated by emerging technologies such as artificial intelligence,” he said.

Data remains sketchy on how rapidly-evolving AI is affecting the environment.

UNCTAD chief Rebeca Grynspan called on the world’s biggest tech companies to lead the way by producing standardized data.

Google recently reported a 48-percent-increase in its greenhouse gas emissions over the five years to 2023, attributed to powering data centers that support AI operations.

Similarly, Microsoft’s latest sustainability report showed a 29-percent-increase in greenhouse gas emissions last year compared to 2020.

Google and Microsoft have each pledged to become carbon neutral by the end of this decade.

Rush to AI 
US investment bank Goldman Sachs last month said the promise of generative AI technology was leading tech giants to spend an estimated $1 trillion on capital expenditure in the coming years, including investments in data centers, chips and other infrastructure.

“But this spending has little to show for it so far,” it said, with questions over “whether this large spend will ever pay off in terms of AI benefits and returns”.

Shamika Sirimanne, UNCTAD’s director of technology and logistics, said the question of what AI should be used for — whether for public good or for search engines, marketing or selling t-shirts — “hasn’t happened yet”.

“But before it is too late, we need to embark on this conversation”.

In its Digital Economy Report 2024, UNCTAD gave a few examples of digital economy impacts on the environment.

The report said the information and communications technology sector emitted between 0.69 and 1.6 gigatonnes of carbon dioxide in 2020.

That represents 1.5 to 3.2 percent of global greenhouse gas emissions — about the same as air transport or shipping.

Producing a two-kilogramme computer requires approximately 800 kilos of raw materials, it said.

Demand for critical minerals like graphite, lithium, and cobalt could surge by 500 percent by 2050, said UNCTAD.

Bitcoin using more energy than Belgium
Data centers consumed 460 terawatt hours of electricity in 2022, with consumption expected to double by 2026.

The report said that in Ireland, data center electricity use more than quadrupled between 2015 and 2022, and now accounts for 18 percent of the entire country’s electricity consumption — a figure that could rise to 28 percent by 2031.

The global energy consumption of “mining” bitcoin, the most prominent cryptocurrency, rose about 34 times between 2015 and 2023 to reach an estimated 121 TWh.

That puts bitcoin mining ahead of entire countries like Belgium and Finland, Grynspan told reporters.

This, she said, is “not something that we can consider marginal”.

“Digitalization is a welcome and necessary driver of global economic growth. But we need to do it in an inclusive and sustainable way,” she concluded.

“As rapid digitalization escalates environmental concerns, it’s now more urgent than ever to have the right policies in place so we can properly manage the impact on the environment.”