Decarbonizing ICT: balancing growth with green solutions and blockchain innovation
The global information and communications technologies (ICT) sector drives economic growth, digital transformation, innovation, and global connectivity. However, this growth comes with a price tag. According to a newly published from Allianz Research, the global ICT sector also emits a significant amount of greenhouse gases, comparable to the aviation industry. In 2020, the ICT sector accounted for 1.8 to 2.8% of global greenhouse gas emissions, which are projected to reach 830 million metric tons of CO2 by 2030. However, the sector's carbon footprint can be reduced through the adoption of renewable energy sources and energy-efficient practices. Reducing the remaining emissions is achievable through the optimization of the product life cycle, involving evaluations of material selection, design decisions, manufacturing, and transportation.
Decarbonizing cryptocurrency is crucial, but blockchain technology—which forms the basis of cryptocurrencies—can also be utilized to support climate action, by enabling transparent tracking of emissions and facilitating a trustworthy Voluntary Carbon Market.
The majority of emissions in the ICT sector come from user devices, and it is unlikely that consumer behavior will significantly shift toward using fewer devices in the future. Policymakers will likely need to implement regulations or incentives to drive changes in consumer behavior toward reducing emissions from user devices. Therefore, top-down mandates might be necessary to enforce emission reduction measures.
Overall, tackling the carbon footprint of the ICT sector requires a multi-faceted approach, involving renewable energy adoption, energy efficiency improvements, decarbonization of cryptocurrencies, and policy interventions to influence consumer behavior. Allianz takes the topic of reducing the carbon footprint of the ICT sector seriously and is actively involved in various efforts to address this challenge. Stay tuned, more to come soon regarding our measures and actions to drive positive change and contribute to a more sustainable future.
** As of September 30, 2023.
*** As reported – not adjusted to reflect the application of IFRS 9 and IFRS 17.