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The information technology sector, as well as the use of IT in other sectors, is growing dramatically, at an annual rate of up to 30%. At the same time, its annual carbon dioxide emissions have already grown higher than those of air traffic.

Video content already accounts for almost 80% of total data traffic and is continuing to grow. The increasing screen time of consumers and the shift to higher image quality is one important factor in the global growth of the sector’s electricity consumption.

Within the next ten years, the ICT sector's share of the world's annual electricity consumption is expected to reach at least 6 and up to 14 per cent.

"Although the electricity consumption of Finland's ICT sector accounts for about 1-2% of the country’s total consumption, this figure does not adequately describe the climate and environmental impacts resulting from the use of digital services.  A significant share - if not the majority - of the digital services used on a daily by Finnish organisations and consumers on are produced in data-centres located abroad, which means that the resulting energy consumption and corresponding climate and environmental impacts will be taking place elsewhere than Finland,” explains Professor of Practice Timo Seppälä from Aalto University.

Achieving climate targets requires transparent information on the sector’s electricity consumption

Finland's target of carbon neutrality by 2035 will require cuts in the emissions of all sectors. The importance of the ICT sector in achieving emission cuts has been estimated to be extensive. However, the available information on the estimated and actual emission reductions is incomplete and as of yet there is no uniform way to measure cuts.

There is no uniform, systematic method for reporting the sector’s electricity consumption or climate and environmental impacts internationally. This is even more challenging due to the fact that production of services is geographically decentralised and an individual operator - a company or a citizen -  cannot know where in reality the digital services are produced and how environmentally friendly the production process is.

"Without comprehensive and transparent information on the sector’s electricity consumption, it will not be possible to reliably assess or regulate the development of the ICT sector and its significance in the achievement of climate and environmental targets," says Research Fellow Kari Hiekkanen from Aalto University. 

Researchers recommend that decision-makers undertake the following measures to improve the situation:

• In order to provide reliable and transparent information on the development of the sector at national level, reporting obligations must be created for the Finnish ICT sector and its electricity use.
• Uniform, cross-border practices for reporting on energy efficiency and climate and environmental impacts in the ICT sector must be promoted at the level of the EU and internationally.

The policy brief created by the research consortium Digital Disruption of Industry is available in Finnish. You can view and download it from below. 

Read also the ETLA report on Energy and Electricity Consumption of the Information Economy Sector in Finland published on 7 January, 2021. This report analyzes the energy and electricity consumption of the Finnish information economy sector from 2011 until 2018.

Contact

Kari Hiekkanen
Research Fellow, Aalto University
Tel. +358 50 5730 389
kari.hiekkanen@aalto.fi

Timo Seppälä
Leading Researcher, Etla
Professor of Practice, Aalto University
Tel. +358 46 851 0500
timo.seppala@etla.fi