RESEARCH October 14, 2024

R&D Is Strong but Investment is Short-Sighted on Digital Tech for Carbon Reduction

Digital technologies play a greater-than-expected role in reducing carbon emissions and may represent a unique opportunity for further reductions, according to a report by fellows at Engineering for Change supported by the Association of German Engineers VDI.

Digital technologies play a greater-than-expected role in reducing carbon emissions and may represent a unique opportunity for further reductions, according to new research. A report by fellows at Engineering for Change supported by the Association of German Engineers VDI suggests that industry professionals, educators and policy makers can leverage digital technologies to support decarbonization now and in the future.

One study that exemplifies the potential found that for every unit of digital technology used in electricity production, carbon emissions can be reduced by 5.6 units, according to Chenchen Huang at Xianmen University, published in Energy Policy in 2023.

“This increase in digital technologies may include the use of AI and big data, e.g. to support renewable energy forecasting, load forecasting, and balancing demand and supply. By doing so, an efficient use of energy can be promoted and steered. This is especially important for the building sector but also for the transport sector, as current decarbonization efforts in transportation strongly rely on electricity-based technologies,” says Rica Schulz, an industrial engineer in Germany and a former E4C Fellow who co-wrote the report.

Digital technologies can include virtual models such as digital twins that can be used in the transport and habitat sectors to monitor technology and systems over their lifecycles, identifying areas for improved efficiency. Other examples include big data, artificial intelligence and “smart” appliances, each of which can increase efficiency.

Global climate deadlines are approaching in 2030 and 2050 and achieving the goals will require rapid changes to old infrastructure and systems critical for safety. It’s still unclear how digital technologies can improve economic, social, and technical aspects of housing and transportation without compromising the reliability of these important systems.

The good news may be that the research into digital technologies is robust. A key finding in the report is that improvements in computing power and technology are not slowing down. Future advancements in algorithms, hardware, and platforms could lead to rapid, “doubly exponential” growth, which would impact decarbonization efforts. The potential benefits of improved computing power in decarbonization initiatives are huge but have not yet been fully realized.

“We are doing particularly well on research and development. We have a huge portfolio of available technologies and interesting solutions which are waiting to be applied and many people are driving the topic of sustainability with a lot of passion and motivation. Also here the mix of different products and solutions is important and helps to balance potential weaknesses of each technology,” Ms. Schulz says.

The bad news may be a collective short-sighted anxiety about the cost.

“I think decarbonization efforts are not hampered by the availability of technologies, but by the ability to apply them. This may be due to personal objections of consumers, politicians or because it requires high investments and efforts to apply them. As a result, many decisions are not being made with the focus on long-term benefits but on short-term cost,” Ms. Schulz says. “Many technologies and decarbonization efforts might require high investments at first but strongly pay off in the future and therefore have a high return on investment which is just not obvious today. To make effective decisions, I think it would be important to do a long-term calculation as well, including future benefits like prevented catastrophes and related cost to them.”

The report suggests that the current knowledge and skills of policymakers and engineers are not enough to fully take advantage of digital technologies. The skills needed to solve complex decarbonization problems are becoming more interdisciplinary, and building these skills should be a priority. Additionally, one of the challenges in using digital technology for decarbonization is ensuring that new technologies don’t weaken the reliability of important infrastructure. Also, the current way that climate technology is financed is not enough to disrupt the systems that are critical for safety.

The report outlines seven recommendations to stakeholders. Ms. Schulz draws out two recommendations to mention here.

“First, I think it is important to take the full product life-cycle into consideration. In case of electric vehicles this includes the production of raw material, batteries as well as the level of emissions of energy consumed in the product use phase and potential waste,” Ms. Schulz says. Otherwise, she says, a technology’s environmental benefits can be overestimated.

“Secondly, our structures and institutions are designed to take a short-term focus. I recommend to be more bold and do the calculation of future benefits as well. This is relevant for politicians and companies alike,” Ms. Schulz says.

The researchers also suggest five areas for future research in the report, which could help push forward decarbonization efforts using digital technologies.

Click here to view the full report

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