The Role of ICT in Sustainable Development Concepts and Empirical Evidences Dr. Eman Gamal El-Din Mohamed Economics Department Faculty of Commerce Damanhour

The Role of ICT in Sustainable Development

Concepts and Empirical Evidences

Dr. Eman Gamal El-Din MohamedEconomics Department

Faculty of CommerceDamanhour University

[email protected]@damanhour.edu.eg

mailto:[email protected]

mailto:[email protected]

The Role of ICT in Sustainable DevelopmentConcepts and Empirical Evidences

A. Sustainable Development B. Sustainable Development and ICT

B.1. The Environmental Effects of ICTB. 2. The Role of ICT in Dematerialization

C. Sustainability and the transition to an information society C. 1. Sustainability and the transition to an information society (Environmental Informatics)C.2. Interaction between ICT and the environmental dimension of sustainabilityC.3. Impacts of ICT on the material aspects of sustainability

D. The Rebound EffectE. ICT and Sustainability the Cause and the Effects

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A. Sustainable Development

•In order to be considered sustainable, a pattern of development has to ensure “that it meets the needs of the present without compromising the ability of future generations to meet their own needs” (WCED, 1987).

•There are some important concepts1. Sustainable Development Vs. Economic Development2. Sustainable Development Vs. Sustainability3. Sustainable Development Vs. Sustainable Welfare3

1. Sustainable Development Vs. Economic Development

• SD is a relationship between economic growth and the environment.

• Physical and Natural capital• The value of the existing stock of natural

resources such as forests, fisheries, water, mineral deposits, and the environment in general.

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Environmental

Sustainability

Economic

Sustainability

Sociopolitical Sustainability

2. Sustainable Development Vs. Sustainability

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3. Sustainable Development Vs. Sustainable Welfare

• SD definition implies maintaining welfare for the indefinite future.

• Welfare implies availability of resources and presence of conditions required for reasonably comfortable, healthy, and secure living

• The goal of sustaining welfare can be met, in principle, by arrangements that allow great scope for substitution in production and consumption and rely, on continuing technological progress and accumulation of capital to compensate for population growth and depletion of natural resources 6






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B. Sustainable Development and ICT• The ICT industry is responsible for around 2-3%

of the global Green House Gases (GHG) emissions.

• ICT solutions have a large potential to enhance performance across the economy and society to reduce the remaining 97-98% of emissions and enhance performance across all sectors of the economy

• Green ICT refers to more generic types, products and applications of ICT which are eco-friendly.

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B. 1. The Environmental Effects of ICTThere are three levels of ICT material effects • ‘First-order’ or ‘primary’ effects created by the physical

existence of ICTs and the processes involved (i.e. environmental impacts of the production, use, recycling and disposal of ICT hardware).

• ‘Second-order’ or ‘secondary’ effects indirect environmental effects of ICT due to its power to change processes (i.e. production, transport or consumption processes), resulting in a decrease or increase of the environmental impacts of these processes.

• ‘Third-order’ or ‘tertiary’ effects environmental effects of the medium- or long-term adaptation of behavior (e.g. consumption patterns) and economic structures to the availability of ICT and the services it provides. 9

Environmental Effects of ICT

‘Second-order’

‘secondary’ effects

‘Third-order’

‘tertiary’ effects

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B. 2. The Role of ICT in Dematerialization• Dematerialization is a reduction of the input of natural

resources into industrial production and consumption by a factor of 4-10 as a necessary condition for Sustainable Development (Hilty 2011).

• Globally , 58 billion metric tons of resources were extracted from nature in 2005 (e.g. including fossil fuels, metals, industrial and construction materials and biomass) (OECD, 2008).

• Current rate of resource extraction seriously affects the global ecosystem with an expected continuous increase, unless it is limited by climate policies.

• Global resource extraction will exceed 80 billion tons in 2020. (doubled within only 40 years 1980-2020) OECD estimates. 11

B.2. 1. Conditions of ICT’s Contribution to Dematerialization

• The material throughput per capita is highest in rich societies in which ‘light’ and ‘virtual’ are attributes with positive connotations.

• The richest economies, with the highest penetration of ICT, are not the most dematerialized ones (OECD, 2008 data).

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B.2. 2. Is there a chance to make a use of dematerialization using ICT?

• First Argument ‘IT productivity paradox’ • The common belief that computers increase labor

productivity was surprisingly not supported by macro-economic data (just as it is the case for resource productivity today)

• “We see the computer age everywhere except in the productivity statistics” (Solow 1987)

• The data showed substantial variation across firms, leading to the conclusion that the effect of introducing the new technology was depending on the organizational conditions under which it was applied (Brynjolfsson and Hitt, 1998)

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Is there a chance to make a use of dematerialization using ICT?

• The Second Argumen ‘positive effects of ICT are already there’

• Creating a ‘selective environment’ for ICT applications, one which clearly prefers the ‘truly dematerializing’ ones, would then be the silver bullet to dematerialize the economy.

• Under conditions generally conducive to environmental protection, ICT reduced the over all environmental impact by around 20% (from 2000-2020). 14


• Under the least favorable conditions ICT was responsible for 30% of the additional environmental impact. (A study of the European Commission).

• Under business as usual conditions, no clear effect at the macro level.

• The positive and negative effects of ICT on the environment had the tendency to cancel each other out. (Erdmann et al., 2004; Hilty et al., 2006a).

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• The dematerializing effect of ICT would dominate when a selective environment encouraging the “dematerializing” applications and to inhibit the others.

• Rising prices for materials and energy can be expected to create dematerializing changes in production and consumption patterns, using ICT as an enabling technology.

• Consumption patterns will have to change from purchasing material goods, which are then used and destroyed, to purchasing services instead.

• Optimal use of the material goods needed to produce the service and to maximize service life (which slows down material flows). 16

B.3. 3. The idea of a largely dematerialized closed-loop economy

•The transformations of material resources at nodes denoted ‘S/H’ add value by creating structure without devaluating the material.

•Each value-creating node is driven by renewable energy (solar panel) and consists of a hardware part H (capital goods for transforming material and energy) and a software part S (the knowledge of controlling these transformations in a manner that adds value).

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C. Sustainability and the transition to an information society

• Information society term indicates the result of the societal change processes caused by the rapid spread of ever-cheaper ICT, leading us gradually forward into a post-industrial society

1. Environmental information processing (Environmental Informatics )

2. Impacts of Information Society Technologies

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C. 1. Sustainability and the transition to an information society (Environmental Informatics)

• Environmental Information Processing combines computer science topics (e.g. database systems, geographic information systems and neural networks), with respect to their application to environmental problems (Avouris and Page, 1995)

• Information Society Technologies (IST) are the technologies that enable and bring about the changes that will serve as a basis for the transition to an information society.

• IST can be viewed as a subset of ICT having a specific potential for deep societal change. 20

C. 2. Interaction between ICT and theenvironmental dimension of sustainability

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C.3. Impacts of ICT on the material aspects of sustainability

• The spread of information society technologies affects the material intensity of an economy directly and indirectly:

Directly through the production, use and disposal of the IST hardware itself.

Indirectly through substitution, optimization and induction effects.

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C.3. 1. Direct Impacts of ICT on the material aspects of sustainability

• The “virtual” alternatives are less material- intensive than the conventional ones

• Most of the material and energy throughput of a PC’s life cycle occurs during production. Less than 2% (Hilty et al., 2000b)– one study says 0.1% – of the material used in PC production ever becomes part of the product, the rest being manufacturing waste.

• The energy spent in producing a PC (5-12 GJ) is about a factor of 10 higher than the energy consumed during the average use phase

• Producing a color TV sets requires 1/4 of the energy for producing a PC.

• Compared to PC production, networks seem to contribute a relatively small part to the ecological burden attributable to IST.

• Figures must be taken with caution, as they only represent a snapshot, whereas in principle, the development of technology and associated manufacturing processes is not predictable 23

C. 3. 2. Indirect Impacts of Information Society Technologies

• The effects of IST on the realm of physical processes can be classified under the following three types

1. Optimization effects occur in all phases of the life cycle, as well as in the design phase

2. Substitution effects occur when an ICT service replaces the use of a physical product

3. Induction effects occur when an ICT service stimulates the use of the other product

While the substitution effect can reduce physical traffic, the induction effect clearly leads away from the path to sustainability. 24

Lorenz M. Hilty (2008) , Information Technology and Sustainability 25






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D. The Rebound Effect• The third-order effects include the widely

discussed rebound effect• Technical progress in the direction of eco-efficiency

or dematerialization is a necessary, but not a sufficient condition for approaching the goal of sustainability

• The rebound effect refers to a potential created by efficiency gains that is balanced off or even overcompensated for by quantitative growth (the counter-intuitive trends such as increasing paper consumption and increasing traffic )

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• According to Moore’s Law (the performance of ICT doubles every 18-24 months), digital electronics dematerializes by a factor of 4 every 3-4 years.

• Why this has not caused a corresponding reduction of the total energy and material flows caused by ISTs?

• Electronics’ share of energy is increasing, and the amount of electronics waste indicates that material throughput is growing just as fast.

• It is predicted under current economic framework conditions that a continuing exponential growth of the IST market until 2015 will result in linear growth of the total physical mass contained in the IST devices that are in use (Hilty et al., 2000b).

The Rebound Effect (Contd.)

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• The efficiency improvements (time, fuel, energy) made possible through technological improvements are counteracted by increasing demand (growing consumption volumes) for energy, products, services, passenger and freight transport.

• Rebound effects need to be acknowledged and addressed by all policies which aim at increased efficiency, especially ICT policies.


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• In a model (Casal et al. 2004) this is managed by determining elasticities, quantified by assigned numbers, for example by determining what proportion of savings are counteracted by increased consumption, or vice versa.

• For instance, a price elasticity value of -0.5 means that demand will decrease by 10% if prices increase by 20%, or that the demand will increase by 10% if prices are 20% lower. (see next two tables)

• Another rebound effect is the re-materialization effect, which could be exemplified by virtual information products such as information accessed via the Internet being printed out or burned on a CD


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Elasticity and Re-materialization Values Assigned for Some Commodities

An elasticity value of -0.5 means that demand will decrease by 10% if prices increase by 20% (or that the demand will increase by 10% if prices are 20% lower) . (Casal 2004) 31

Elasticity and Re-materialization Values Assigned for Some Commodities

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A study (Erdmann et al. 2004) was conducted on the impact of telecommunications (equipment and services) and information technologies on the following environmental indicators:

1. Volume of transport relative to gross domestic product (GDP),

2. Modal split of transport,3. Energy consumption and share of renewable,4. Greenhouse gas emissions,5. Municipal waste collected but not recycled

E. ICT and Sustainability the Cause and the Effects

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If we have a look at the different ICT applications we can conclude that:

1. The direct impact of ICT use is negative by definition as a first order effect of ICTs. (electricity consumption, greenhouse gas emissions and non-recycled solid waste).

2. Supply chain management is estimated to have a neutral or limiting impact on future freight transport performance, on non-recycled solid waste, and on energy consumption and greenhouse gas emissions. The rebound effects have to be considered.

3. Production process management and virtual goods show similar impacts. The high data uncertainty of the product-to-service shift has to be taken into account.

The Study Conclusion

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4. Small positive impact of teleshopping by 1%, in reducing growth of passenger transport performance, and in increasing freight transport performance and the quantity of non-recycled solid waste.

5. The virtual mobility characteristic of tele-work and virtual meetings, have a potential to limit the growth of future passenger transport performance and hence also energy consumption and greenhouse gas emissions.

6. ICT-based waste management limits the growth of future non-recycled solid waste, without conflict with other goals significantly, as the impact of longer end-of life distances is considered to be negligible.

7. Intelligent transport systems is reducing the performance of freight and passenger transport in 2020, but stimulating the share of transport accounted for by the private car.

The GHG emissions are still increasing , as the negative impacts of ITS (integrated transport systems) have strong rebound effects 36


8. Energy supply efficiency improvements supported by ICT, (e.g. an increase in the share of electricity production from renewable sources) lead to a limitation of total future energy consumption and greenhouse gas emissions. This effect might offset the benefits of ICTs if infrastructure has been included (the rebound effect)

9. Facility management supported by ICTs has considerable potential to reduce future energy consumption (avoid greenhouse gas emissions). The rebound effects have to be considered .

10.The time utilization effect addresses the possibility for multi-tasking in passenger transport, especially to work with ICTs. (It supports a positive shift to public transport, but it provides incentives to expand passenger transport performance).


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References• Asefa, Sisay, Editor (2005), The Economics of Sustainable Development, Institute for

Employment Research Kalamazoo, Michigan.• Casal, Carlos Rodríguez, Christine Van Wunnik, Luis Delgado Sancho, Jean Claude

Burgelman and Paul Desruelle ,editors (2004), The Future Impact of ICTs on Environmental Sustainability, European Communities.

• Fernando, Preminda and Atsuko Okuda (2009), Green ICT: A “Cool” Factor in the Wake of Multiple Meltdown, ESCAP Technical Paper.

• Hilty, Lorenz M., Eberhard K. Seifert, René Treibert, editors (2005) , Information Systems for Sustainable Development, Idea Group Inc.

• http://www.sciencedev.net/Docs/ICT_for_Development.pdf• Moffatt, Ian (2007), Environmental Space, Material Flow Analysis and Ecological Foot

printing, in Handbook of Sustainable Development, Edward Elgar Publishing Limited.• http://www.businessdictionary.com/definition/welfare-economics.html • Cairo Road Map. “ICTs and Environmental Sustainability” (2010) The 5th ITU symposium

“ICT, the environment and Climate Change” 2-3 November, Smart Village- Egypt • http://www.itu.int/dms_pub/itu-t/oth/06/0F/T060F0060160001PDFE.pdf • http://www.unescap.org/idd/working%20papers/IDD_TP_09_10_of_WP_7_2_907.pdf• http://www.mcit.gov.eg/ICT_Strategy/Innovation_and_ICT_Industry_Development#

Promoting ICT Investment and FDI 38

http://www.sciencedev.net/Docs/ICT_for_Development.pdf

http://www.businessdictionary.com/definition/welfare-economics.html

http://www.itu.int/dms_pub/itu-t/oth/06/0F/T060F0060160001PDFE.pdf

http://www.itu.int/dms_pub/itu-t/oth/06/0F/T060F0060160001PDFE.pdf

http://www.unescap.org/idd/working%20papers/IDD_TP_09_10_of_WP_7_2_907.pdf
















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The Role of ICT in Sustainable Development Concepts and Empirical Evidences Dr. Eman Gamal El-Din Mohamed Economics Department Faculty of Commerce Damanhour