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Internet of Things: Good or Bad for Carbon Emissions?

August 9, 2016 by Kai Goerlich 38

The presence of sensors and the Internet of Things (IoT) in our lives is extraordinary. Today, 15 billion interactive devices are exchanging information about many aspects of our lives, and the IoT is bound to become even more ingrained in our world as 200 billion devices are expected to be actively used by 2020, according to Intel.

Very soon, we will be surrounded by more than 1 trillion interactive devices, moving fast into what is know as ambient intelligence.

However, we cannot discount the cost of this exponential growth. Even though the promise of the IoT is restricted only by our imaginations, the consumption of resources – mostly energy and minerals – will no doubt contribute to already troubling global shortages.

IoT: Carbon Emission Consumer or Great Eliminator?

By the end of 2015, digital technologies might help save 7.6 Gt carbon emissions by 2030, a finding that is based on the #SMARTer2030 study by the Global e-Sustainability Initiative (GeSI) and Accenture Strategy. The research uncovered that we can maintain worldwide carbon emissions to 2015 levels – but only through the intelligent use of technology. Based on GeSI’s findings, we concluded that six major industries – utilities, transportation and logistics, manufacturing, retail and consumer products, agriculture and food production, and construction – could cut 63% of 12.1 Gt in carbon emissions.

We know from many reports, including the IDC white paper “The Internet of Things and Digital Transformation: A Tale of Four Industries,” that the IoT will influence most business processes in a variety industries. Estimated cost savings are anywhere between 15% and 30%, if we generalize the findings of the first IoT projects. Since these six industries are highly resource-intensive businesses, it is safe to assume that the IoT will likely help reduce carbon emissions significantly.

Promising areas of IoT application include:

  • Strategic asset management, since fixed assets take up as much as one-third of all operating costs
  • Remote maintenance
  • Product maintenance and service ideas
  • Environmental scanning for precise navigation, logistics, weather prediction, and agricultural planning

While the opportunities are tempting, there’s still one question looming: Will the savings outweigh the cost of building up the infrastructure and devices to support the IoT?

Connecting the Dots Between the IoT and Carbon Emissions

If the growth of sensors and IoT-enabling technology continues at today’s pace, 30% of the IT market will be made up of IoT, data, and devices in 2030, according to market figures from IDC and Woodside Capital Partners. This assumption roughly translates to 30% (or 2.3) of the proposed 7.6 Gt savings in carbon emissions would be impacted by the IoT.

IoT impact of carbon emissions

The #SMARTer2030 report stated that 20% of the global carbon emissions could be influenced by IT. We applied that calculation as a kind of efficiency factor and deviated three scenarios from it. In the baseline scenario, the IoT will have the same efficiency as the overall IT landscape – saving 2.3 Gt carbon by emitting 0.2 Gt carbon. Whether the IoT becomes less efficient (our assumption = 10%) or more enabling technology is created for activities that do not cut carbon emissions, we could still save 1 Gt carbon by emitting 0.2 Gt carbon, which is a net win of 0.8 Gt carbon. If the efficiency of IoT-related processes increases to 30%, we may even save 3.5 Gt carbon by emitting 0.2 Gt carbon.

It’s tough to predict how much additional infrastructure will be needed in the future, but our analysis shows the IoT’s potential in significantly saving carbon emissions. And if current conditions persist, it may even save more carbon than it’s using.

For more on the environmental impact of IoT, see Is The Internet Of Things A Panacea For Sustainable Development?

Kai Goerlich is the Idea Director of Thought Leadership at SAP

This story originally appeared on The Digitalist Magazine as part of the 10 Weeks of Live Business series.

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