ICT impacts on greenhouse gas emissions in energy intensive industries

Interim report - summary
(final report expected for November 2009)

Download the executive summary of interim report (pdf, 99 KB)

About this study

There is much hope that information and communications technology (ICT) has a high potential to increase energy efficiency and reduce greenhouse gas (GHG) emissions of industries. However, empirical research has so far provided only limited evidence to support these expectations. The available literature lacks a comprehensive assessment of the im­pact of ICT on GHG emissions. This study aims to improve the empirical evidence on the role of ICT on GHG emissions in energy-intensive industries. It focuses on the following sectors:

• Transportation
• Pulp, paper, printing and paper products;
• Chemicals, rubber, plastics and coke;
• Glass, ceramics and cement;
• Metals.

A description of the environmental context reveals the magnitude of the problem that GHG emissions impose. In particular, while GHG emissions are not expected to significantly decline anywhere in the world, some econo­mists estimated that without substantial efforts the long-term costs of climate change would be dramatically higher than the economic losses that any strict policy to reduce emission levels by a significant margin might incur. Hence, there is strong indication of market failure, urging policy makers to take action.

To perform the necessary empirical analysis, we describe the available data base and compile a data set which reports the relevant factor inputs and output of five energy-intensive industries, as well as their respective GHG emissions.

Preliminary results

The data demonstrates that GHG emissions in the EU-15 have remained almost stable over the period from 1990 till 2005. Hence, given the rising concerns about the long-term costs of climate change, this again points towards the need for policy intervention. On a sector-by-sector level we find that GHG emissions per output have been decreasing for most but not all industries, again underlying the need to stimu­late stronger measures. Finally, in a first estim­ation of the interaction between GHG emissions and several input factors, we find no consistent evidence that the use of ICT has contributed to lower emission levels. However, since the analysis conducted so far is only preliminary, we acknowledge the need for more sophisti­cated methodologies.

Based on this preliminary analysis, we describe a metho­dology that is robust with respect to data quality and sufficiently flexible to cover all technical specificities of the analysed sectors. We specify how this methodology can be used to quantify the contribution of ICT capital to state-of-the-art technologies that minimise GHG emissions and how this contribution has been changing over time. These results will be specific for each industry, so that sectoral differences can be sufficiently considered.

Finally, we describe the characteristics of several companies that have been approached for case studies and lay out how the findings of these studies could interact with those of the empirical analysis. The interim report closes with a summary and first indications of possible results.