simon zadek

On 17th December 2011, at a specially convened Forum in Beijing to consider the role of ICT in enabling China’s low carbon transition, Wu Jichuan, Director-General of Chinese Institute of Electronics and former Minister of Ministry of Information Industry set out the Chinese game plan in straightforward terms:

“The Chinese government has declared that carbon intensity will be reduced by 40-45% between 2005 and 2020, and the 12th 5-year plan aims to speed up energy efficiency and low carbon development models”. Zhou Zixue, the Chief Economist of the Ministry of Industry and Information Technology (MIIT), then highlighted that, “ICT is very important to promote the transformation of high carbon industries into low carbon industries, which is a means towards sustainable development”.

But how much can ICT help, what are the barriers to progressing an ICT-enabled green economy, and how can they best be overcome? The Digital Energy Solutions Campaign, a coalition of ICT companies (e.g. Intel, Lenovo, HP and Nokia), working with the MIIT, commissioned me and a technical team to answer exactly these questions, drawing on prior work of the European Commission, The Climate Group, the Global e-Sustainability Initiative and the WWF.

ICT can help to decouple economic growth from energy consumption and emissions by contributing to economic productivity, and by reducing emissions. High-level estimates, tentative and provisional, due to many uncertainties, indicate the significant contribution that ICT could make to China’s low carbon development through both of these dimensions.

ICT use improves competitiveness and productivity. Breakthroughs in information technology provide the basis for leaps in labor, capital, and firm productivity. In developed countries each US$1 invested in the ICT asset base delivers around US$1.4 of added value. We estimated that by 2020 China’s ICT sector will contribute RMB 5.9 trillion (£556 billion) of added growth to the economy, accounting for 7.2 % of the economy, and contributing 8.6% of overall economic growth over the decade.

The ICT sector can reduce its own carbon intensity. The ICT sector itself, has relatively low energy and carbon intensity, although its absolute emissions are growing. By 2020 the ICT industry will produce 415 MT of emissions, or 3.0-3.3 % of the country’s total emissions at the same time the sector will provide 7% of economic output. This means the carbon intensity associated with the ICT sector could reduce by over 60%.

The largest potential is for ICT enabled emission reductions is in other industries, where ‘smart’ technologies could abate 1.4 -.1.8 GT CO2e by 2020. This would amount to between 13% and 18 % of the national GHG intensity reduction target for 2020. ICTs enable energy and emission savings through monitoring and optimizing energy use (such as in heating, lighting and industrial processes), optimizing product and service provision (such as through smart logistics and transport and traffic controls), and by enabling substitution of virtual services such as virtual meetings, and music downloads for real world office space, travel, products and shipping. The emissions savings enabled by ICT use could be up to 4 times greater than the direct emissions related to ICT over that period.

Achieving these opportunities for low carbon growth requires action by technology providers and users, as well as enabling frameworks provided by public policy and procurement. As Zhang Jiutian, Director, Ministry of Science and Technology argued, “calculation of emission reduction may not be the most difficult task, but how feasible or realistic is it for the potential to be realized.”
Demonstrating and enabling ICT use in practice is as important as development of technologies. Often when new technologies are developed they cannot be immediately introduced within existing business models. Peng Jun, Director of China Mobile’s Green Action Program highlighted this dilemma, “for many energy efficiency technologies, a large upfront investment is required with long payback times. While China Mobile has implemented technologies with a 10 year payback for energy savings many other companies will not be able to afford such an investment.”

Professor Cuizhong, from the China Institute of Strategy and Management said “ICT is widely connected with all industries and energy sectors, for each industry we need to find good examples and then promote these. There must be standards to specify how energy-efficiency can be achieved through ICT applications”.

There is a need for more detailed policy analysis, alongside the technical and commercial case studies. While China has a set of ambitious strategies both for energy efficiency and for ICT, they are not strongly joined up, and as the World Economic Forum’s ‘Network Readiness’ analysis highlights there is much still to be achieved. Continuing to develop a stronger ICT infrastructure, and expanding broadband access is crucial but further areas that should be explored include:

• The role of public procurement in demonstrating the benefits of smart grid, smart transportation, travel substitution, smart buildings and other smart technologies.

• The potential for adopting or creating protocols for measuring the energy-efficiency and climate impacts of ICT in other economic sectors, and for the interoperability of devices.

• The potential for integrating ICT tools and approaches into training, tools and incentives as part of the overall strategy for industrial energy efficiency.

Collaborative action by ICT industry players, MIIT and other relevant ministries, and international collaborators in both developed and emerging economies could help develop the tools and capacities needed for ICT to make a full contribution to China’s low carbon growth. As Professor Zhang Junhua, Professor from the School of Management at Zhejiang University noted “Information exchange and learning is critical between ICT companies, suppliers, users and government”.

The report ‘ICT and Carbon Emissions in China’ can be freely downloaded in English and Chinese, along with the presentations made at the event.

This article was first published in The Guardian Sustainable Business and through the United Nations Public Administration Network.

The report, ICT and Low Carbon Growth in China, can be freely downloaded in English and Chinese at http://bit.ly/ggH6bA. Simon can be contacted at simon[at]zadek[dot] net and blogs regularly through www.zadek.net