Launch of the Digital Economy Report 2024
10 July 2024
[Check against delivery]
We are presenting here today one of UNCTAD’s key reports, the Digital Economy Report 2024. This year the report explores the link between the global digital economy and the environment, and what this means for development.
Our message is clear: The digital economy is driving global growth. But it is also having an increasing environmental impact. Our key concern is how this affects our environment and developing countries.
Developing countries, as you know, are disproportionately suffering from the impact of climate change.
Yet, they are not at the forefront of reaping the benefits of the global digital economy.
This disparity can and must be reversed.
Let me be clear: Digitalization is a welcome and a necessary driver of global economic growth. However, it must be inclusive and sustainable, as rapid digitalization escalates environmental concerns.
We can offer a positive outlook based on opportunities, because we need the digital economy to catalyze growth and generate opportunities for all.
This is what we put forward in this report, with an in-depth section on the recommendations on how we can manage the impact of digital economy on the environment.
Let’s first consider the impact of the digital economy on climate change.
First: with respect to the electricity consumption:
In 2020, the digital economy emissions accounted for 1.5-3.2% of global greenhouse gas emissions, like air transport or shipping. Let’s analyze this more closely.
In 2022 data centres consumed 460 terawatt-hours of electricity. This could power about 42 million U.S. homes for a year. This figure is expected to double by 2026.
The rise of technologies such as artificial intelligence and cryptocurrency mining has significantly increased energy consumption. For example, Bitcoin mining's energy consumption rose 34-fold between 2015 and 2023, reaching around 121 terawatt-hours. For comparison, countries like Belgium or Finland consume under 90 TWh per year.
Second: digital waste:
Digital-related waste increased by 30% between 2010 and 2022, reaching 10.5 million tons globally. And Digital waste management remains inadequate. This is a huge concern given the pollution this generates and its impact on the environment.
Third: the use of critical minerals:
Today Developing countries are key producers of critical minerals essential for the digital economy, they hold the key to the growth of the digital economy we are witnessing.
A 500% surge in demand for minerals crucial for digitalization is predicted by 2050, driven by consumer electronics, electric vehicle batteries, and renewable energy storage.
This is a development opportunity for resource-rich developing countries.
However, this can only be realized if they can add value to extracted minerals, utilize proceeds effectively, and diversify within the value chain and other sectors.
This ambition requires a strategic shift towards sustainable and inclusive digitalization. This means reducing waste and environmental impacts and improving the efficiency of raw material use.
Fourth: Water consumption
Here let me mention some examples to illustrate the impact of the digital economy on water consumption.
- In the United States, one-fifth of the direct water footprint of datacentre servers reportedly comes from moderately to highly water-stressed watersheds.
- Google, disclosed that in 2022 total water consumption at its data centres and offices amounted to 5.6 billion gallons (about 21.2 million m3). For the same year, Microsoft reported that its water consumption was 6.4 million m3.
- Water consumption by data centres has recently stoked tension within local communities in some countries. For example, Google planned to build a data centre in Uruguay, which led to public debate. In 2023, the country experienced the worst drought in 74 years, and more than half of its 3.5 million citizens were without access to potable tap water.
- Microsoft training of GPT-3 in its data centres in the United States directly consumed an estimated 700,000 litres of clean freshwater.
Policy recommendations:
With regards to the environmental impact of the digital economy, we must integrate environmental and digital policies:
- Embracing a circular economy—prioritizing the recycling, re-use, and recovery of digital materials and implementing resource optimization strategies.
- And we need global commitment to adopt these practices.
Today, UNCTAD calls for stronger environmental regulations and investments in renewable energy to mitigate the ecological footprint of digital technologies.
Closer international cooperation is critical to ensure equitable access to digital technologies and address the global nature of digital waste and resource extraction.
The increased demand for critical minerals presents an opportunity for resource-rich developing countries to add more value to extracted minerals, diversify their economies, and enhance their development.
The digital economy is central to global growth and development opportunities, but its impact on climate change and the environment has to be recognized to properly address the challenges.
Thank you.
