Digital Economy Causing Environmental Damage: UN

The United Nations has warned that the rapid digitalisation of the global economy is costing the environment significantly. This is the result of extensive usage of water and energy bu the data centres that are used to power AI.

The rapid digitalisation of the global economy is costing the environment significantly, the United Nations has warned.

This is largely due to the extensive usage of water and energy by the vast data centres that are used to power artificial intelligence (AI).

While digitalisation is essential to fuel global economic growth, its environmental repercussions are becoming “increasingly severe”, the UN trade and Development Agency (UNCTAD) stated in a report on Monday.

The agency has called for adopting sustainable strategies in order to counter the growing environmental toll, especially in developing countries.

“Digitalisation continues to move at warp speed, transforming lives and livelihoods. At the same time, unregulated digitalisation risks leaving people behind and exacerbating environmental and climate challenges,” said UN chief Antonio Guterres in the report.

He highlighted that as the reliance on digital tools increases, so does the impact on the environment, in form of depleting raw materials, consumption of water and energy, spewing air pollution and generating waste.

“These impacts are worsened by emerging technologies such as artificial intelligence,” he added.

Limited Data Available

There is limited data available on how rapidly-evolving AI is affecting the environment. Therefore, UNCTAD chief Rebeca Grynspan has urged the world’s biggest tech companies to lead the way by producing standardised data.

In response, Google has recently reported that there has been a 48 per cent increase in its greenhouse gas emissions over the five years to 2023. This is largely due to powering data centres that support AI operations.

Similarly, Microsoft’s latest sustainability report has showed that there is a 29 per cent increase in greenhouse gas emissions in the last year as compared to 2020. Both Google and Microsoft have made a commitment to become carbon neutral by 2030.

In the Digital Economy Report 2024 published by UNCTAD, there are several examples of the digital economy’s impact on the environment.

The report has stated that the information and communications technology (ICT) sector has cause 0.69 to 1.6 gigaton of carbon dioxide emissions in 2020. This represents 1.5 to 3.2 per cent of global greenhouse gas emissions, comparable to the emissions from air transport or shipping.

The report has noted that in order to produce a two-kilogram computer there is a requirement of approximately 800 kilograms of raw materials.

According to UNCTAD, the demand for critical minerals like graphite, lithium, and cobalt could increase by 500 per cent by the year 2050.

It was also found that data centres had consumed 460 terawatt hours of electricity in 2022. This consumption is expected to double by 2026.

The report has highlighted that in Ireland, data centre electricity use has more than quadrupled between 2015 and 2022. It now accounts for 18 per cent of the country’s total electricity consumption, and could rise to 28 per cent by 2031.

Bitcoin uses more energy than Belgium

The global energy consumption of mining bitcoin, the most prominent cryptocurrency, has increased about 34 times between 2015 and 2023 to reach an approximately 121 TWh.

This puts the energy usage for bitcoin mining ahead of energy consumption of entire countries like Belgium and Finland.

Digitalisation is key to driving economic growth across the globe. This makes its progress essential. However, there is a need for a more sustainable approach considering the environmental impact it has.