This space has of late necessarily focused on the rapidly changing economic picture – inflation, energy prices, prospects for recession among other topics. This piece takes a little longer-term view and looks at little-discussed aspects of the digital revolution – turning from the all-too-common musings about how it will change the way people live to questions of sustainability, perhaps especially pertinent considering the growing popularity of ESG (environmental, social, and governance) priorities in business and investing.
A long-ago talk by Steve Jobs captures the still-popular image of the digital world and how the billionaires that run it like to characterize things. When in 1985 Jobs spoke at Sweden’s Lund University, he described his Macintosh computer as a source of “free energy.” He emphasized its low cost by pointing out how it used less electricity than “a few of those light bulbs.” Though remarkably prescient in so many ways, he certainly missed the boat on this matter. It is becoming increasingly clear that the Internet, cell phones, the whole digital establishment demands tremendous amounts of energy. And because the only energy source reliable enough to support this establishment is hydrocarbons, the digital world has become a major producer of greenhouse gases, however indirectly.
Cloud computing alone already uses some 3 percent of the world’s electricity. The huge network of immense data centers on which it relies demands 100 times the electricity per square foot as a modern skyscraper. The Department of Energy concluded that as early as 2008 data center power use had surpassed that of the entire U.S. chemical industry. Energy use by cloud computing expanded 90 percent from 2000 to 2005 and 24 percent between 2005 and 2010. Electricity use leveled off between 2010 and 2014, no doubt as a lagged response to the great recession, but by 2017, money spent constructing new data centers doubled from the year before. By 2021, the planned spending on data center expansion had more than tripled the rate of the previous decade. Google announced that in only the last six years its data center electricity use had more than tripled, a 20 percent annual rate of increase that far surpassed any other industry.
To be sure, the great cloud architects – Amazon, Google, Microsoft, Apple, and Facebook – project a green image to the world. Google has at times even claimed that all its power comes from renewable sources. Wind and solar supply some 10 percent of the world’s electricity, but by their nature, they do so only intermittently. The wind does not always blow, and the sun does not always shine. These data centers require a constant, always-on supply, and in the world of today, that can only come from the largely hydrocarbon-powered electric grid. Google can make its claim on renewables by financing alternatives apart from its own operations and crediting those efforts against its huge consumption of more conventionally generated energy. For those who remember their high school history, this is called “buying indulgences.”
Datacenter demand tells only part of the energy use story. The entire infrastructure of the world’s digital venture redoubles the system’s power demands. After all, the energy consumed by a smartphone goes well beyond the device in a person’s hand. It also consists of the network of towers and servers and, to be fully accurate, the energy used to construct that network. Even not considering the huge energy demands of construction, the power used by the whole system means that a single cell phone consumes on average about as much energy per day as a household refrigerator. There are more than over 7 billion smartphones and about 4 million cell towers in the world today. Estimates put electricity consumption for cell phones, laptops, and tablets at about 10 percent of total global energy consumption, more than Italy uses for all purposes. The freight traffic involved in the household delivery of Internet shopping adds still more to the energy use, far exceeding bulk delivery to brick-and-mortar retail establishments, both in road miles and in packaging. Wireless networks require on average ten times the power consumed by wired networks. When 5G fully rolls out, it will need many more base stations, by a factor of 10 in fact.
And the needs clearly are growing fast, not the least because of the coming demands of artificial intelligence (AI) and robots. Just to give a feel for how vast these potential needs could become, consider that driverless cars will, engineers estimate, degrade vehicle mileage at least 10 percent. Replace the nation’s auto fleet with self-driving vehicles and the robo driver part alone will use as much fuel as all the cars on California roads today. Robots for street delivery of Internet purchases, already heavily used in warehouses, will likely appear long before driverless cars. They, too, will consume huge amounts of energy.
Nor does it seem likely that efficiency gains will cut back on present and prospective power use. There can be little doubt that engineers will make great strides increasing the efficiency of data centers, servers, AI, and networks. The problem is that such gains tend only to increase usage so that as each piece of this puzzle gets more efficient, the demands for service grow so that the system as a whole uses more not less energy. The phenomenon is far from exclusively a problem for high tech. It was first promulgated in the 1860s by the British economist William Jevons who noticed that each efficiency gain in coal use so reduced costs that it increased the nation’s demand for energy and accordingly coal. This so-called Jevons Paradox has made itself evident ever since. In the later part of the 20th century, for instance, greater efficiencies in jet engines made air travel cheaper despite the rising price of oil and so increased demands for jet fuel. There can be little doubt that the same will befall the digital world as it becomes more efficient.
Considering these staggering comparisons, it is a wonder at one level that Washington and many other national governments focus almost exclusively on transportation and shipping when they talk about things green and the need to cut back on the use of energy generally and fossil fuels in particular. Even the Green New Deal focuses largely on home heating and cooling and transportation as the culprits. On two other levels, however, this obsession is hardly surprising. Tech energy consumers give a lot more to politicians than do others and accordingly deflect a lot of criticism. There is also a strong tendency among legislators – in the United States and elsewhere – to think in terms of yesterday’s technologies. Perhaps instead of the elaborate regulatory superstructure put in place by this country’s government agencies, and structured entirely around yesterday’s technologies, a better way to protect the environment may well be through market incentives, with a carbon tax, for instance.