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Digital emissions: The costs of a data-obsessed world

Online activities and transactions have led to surging energy consumption levels as companies continue to migrate to cloud-based processes.

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Quantumrun Foresight
November 7, 2022

Insight summary

The data center has become an essential component of corporate infrastructure as many businesses now strive to establish themselves as market leaders in an increasingly data-driven economy. However, these facilities often consume a lot of electricity, leading to many companies looking for ways to reduce energy consumption. These measures include relocating data centers to cooler places and using the Internet of Things (IoT) to track emissions.

Digital emissions context

The increasing popularity of cloud-based applications and services (e.g., Software-as-a-Service and Infrastructure-as-a-Service) has led to the establishment of massive data centers running supercomputers. These data facilities must operate 24/7 and include emergency resiliency plans to fulfill their respective companies’ high demands.

Data centers are a component of a broader sociotechnical system becoming more ecologically damaging. About 10 percent of global energy demand comes from the Internet and online services. By 2030, it is predicted that online services and devices will account for 20 percent of worldwide electricity use. This growth rate is unsustainable and threatens energy security and carbon emission reduction efforts.

Some experts believe there are insufficient regulatory policies to oversee digital emissions. And although tech titans Google, Amazon, Apple, Microsoft, and Facebook have pledged to use 100 percent renewable energy, they are not mandated to follow through with their promises. For example, Greenpeace criticized Amazon in 2019 for not meeting its target to reduce business from the fossil fuel industry.

Disruptive impact

As a result of the increasing financial and environmental costs of data centers, universities and technology firms are developing more efficient digital processes. Stanford University is looking at making machine learning “green” with less energy-intensive methods and training sessions. Meanwhile, Google and Facebook are building data centers in areas with harsh winters, where the environment provides free cooling for IT equipment. These firms are also considering more energy-efficient computer chips. For example, researchers discovered that neural network-specific designs could be five times more energy-efficient when teaching an algorithm than using chips optimized for graphics processing.

Meanwhile, several startups have cropped up to help companies manage digital emissions through various tools and solutions. One such solution is IoT emissions tracking. IoT technologies that can detect GHG emissions are receiving increased attention from investors as they recognize the potential for these technologies to provide accurate and granular data. For example, Project Canary, a Denver-based data analytics firm offering an IoT-based continuous emissions monitoring system, raised USD $111 million in funding in February 2022.

Another digital emission management tool is renewable energy source tracking. The system tracks green energy data collection and validation, such as that obtained from energy attribute certificates and renewable energy certificates. Companies like Google and Microsoft are also becoming more interested in time-based energy attribute certificates that allow for “24/7 carbon-free energy.”

Implications of digital emissions

Wider implications of digital emissions may include:

More companies building localized data centers instead of massive centralized facilities to conserve energy and support edge computing.

More countries in cold locations taking advantage of data centers’ migration to cooler areas to boost their local economies.

Increased research and competition to construct energy-efficient or low-energy computer chips.

Governments implementing digital emissions legislation and incentivizing domestic companies to reduce their digital footprints.

More startups offering digital emissions management solutions as companies are increasingly required to report their digital emission governance to sustainability investors.