Question

Give a research paper on below topic "Does digital economy leads to sustainable use of our resources ?" [ This is a research paper for master level please provide the detail i need atlease 85 marks out of 100]

Answer 1

1. Introduction:

Digitalization – the increased use of information and communication technologies (ICT) – is affecting all areas of our lives. Rapid progress in the development of hardware and software is steadily moving us towards a fully-digital society. The ways how we learn, communicate, and consume are cases in point. Applications and devices make it “easier” (in inverted comma, because sometimes technology makes things more complicated or confusing) to do routine work or to stay in contact with each other. Many of them have already become so embedded in our daily experiences that it is hard to imagine living without them. Instant e-mail delivery, navigating with online maps, and an internet at our fingertips, available 24/7, has become second nature to us. The increased use of digital technologies to transfer money, to hail a taxi or to control energy consumption provides an illustration. The impact of digitalization on our lives is profound. A typical day in the internet today comprises 2.3 billion GB of web traffic, 152 million Skype calls, 207 billion emails sent, 36 million purchases on Amazon, 8.8 billion videos watched on Youtube, and 4.2 billion Google searches.1 The speed with which digital technologies continue to make inroads into societies is constantly on the rise. And the lines between the old economy and a new digital one are becoming increasingly blurred. Against this background, this report explores the opportunities and risks of the digital economy for a broad sustainability agenda and thus for people, communities and the planet.2 Bringing two vast topics as digitalization and sustainability together into a 20+-page report is a task that can only be covered in a very selective way. In this spirit, I provide an overview on key opportunities and threats of the digital economy for sustainability, and highlight examples of companies and initiatives attempting to seize the former and mitigate the latter. I am also largely focusing on advanced economies – even though I am certainly fully aware of the significant benefits and risks that digitalization may also bring along for developing countries. I hope that this important dimension can be taken up in follow-up work at oikos in the future. The report starts with an overview on the digital economy. How is it defined? How clearly can it be distinguished from the rest of the economy? How did it develop in the past and how is it expected to evolve in the future? What are key technologies that it is based on? And which developments are lying ahead? The subsequent sections focus on the link between the digital economy and sustainability. It starts with an exploration on key sustainability issues relating to the infrastructure that underpins it. What is the resource use of the Internet? What is the environmental impact of end devices, e.g. smartphones? The next section continues with a closer look at the sustainability implications of digital technologies across different markets including energy, food, health, housing, mobility and finance. It also highlights examples of initiatives that are seizing the opportunities and mitigating the risks of digitization for sustainability. The final chapter highlights key conclusions and shares an outlook on possible next steps on the topic within and outside of oikos.

2. Digital Economy – An Overview:

The term “Digital Economy” was popularized by Don Tapscott – a leading global authority on the economic and social impact of technology – in his 1994 book “The Digital Economy: Promise and Peril in the Age of Networked Intelligence.” More than 20 years ago, he highlighted that “in the old economy, information flow was physical: cash, checks, invoices, bills of lading, reports, face-to-face meetings, analog telephone calls or radio and television transmissions, blueprints, maps, photographs, musical scores, and direct mail advertisements. In the new [digital] economy, information in all its forms becomes digital - reduced to bits stored in computers and racing at the speed of light across networks.”3 For the OECD, “the Digital Economy is an umbrella term used to describe markets that focus on digital technologies [and which] typically involve the trade of information goods or services through electronic commerce.”4 According to Wikipedia, “digital economy refers to an economy that is based on digital computing technologies. The digital economy is also sometimes called the Internet Economy, the New Economy, or Web Economy.” What all these references have in common is a central role of digital information. Economic activities are increasingly based on collecting and processing data about customers, suppliers, warehouses, etc. and transforming them into useable knowledge. Data becomes a new key currency. In the digital economy, every key aspect of a business is based on technology. Its boundary to the Old Economy is blurred and moving. Technologies are changing rapidly, and so are companies and markets.

2.1. Development:

While the digital economy cannot be traced back to one single starting 3 point, the creation of the internet and the introduction of personal computers in the early 1980s, the invention of the world-wide web in 1989 and its opening to the public in the early 1990s, as well as the release of the first smartphones in the late 1990s, were key milestones in its development. Since then we have come a long way. Today, 7 billion people – 95% of the global population – live in an area that is covered by mobile cellular networks. Close to one out of two people in the world use the internet. The number of mobile phone subscriptions increased from 2.8 billion in 2006 to 7.4 billion 10 years later. Nearly half of all households worldwide have a personal computer.5 At the same time, the differences in access to digital technologies remain significant. More than 80% of the population in developed countries compared to just over 15% in least developed countries is online. Fixed broadband subscriptions per 100 inhabitants stand at 30 in developed countries, compared to 0.7 in Africa.6 Within the OECD, the number of wireless mobile broadband connections stands at close to 140 per 100 inhabitants in Finland, and at 34 in Hungary. More than 90% of businesses use broadband in Spain compared to just below 70% in Poland.7 Digital divides also exist on a national level. In Switzerland, 97% of the population with a monthly income above 10.000 CHF uses the internet several times a week, compared with 55% of those with an income below 4.000 CHF. 99% of those aged 14-19 are online on multiple occasions every week, compared to just 43% of those older than 70 years.8 Different connection speeds also abound. While more than 50 out of 100 internet subscriptions in Switzerland provide high-speed access, just over 20 offer speeds above 25 Mbs and just over 5 feature speeds above 100 Mbs.9 The concentration of fibe

optic networks in Basel, Bern, Geneva, Lausanne, Winterthur, and Zurich is a further case in point in that context.10 Box 1: Fiber Optic Networks Fiber-optic networks send impulses of light through fiber-optic cables to transmit information such as telephone and cable TV signals as well as internet data. Developed in the 1970s, they have already replaced a significant part of core copper networks in the industrialized world. While their main application so far has been focused on long distance communication and high demand usage, rollout to consumers is gaining momentum. In the OECD, fiber now accounts for 19% of all broadband connections – with a maximum share of 73% in Japan and a low end of close to zero in Belgium, Greece, and Ireland.11 These differences notwithstanding, the digital economy is leaving a growing mark around the world. New companies and business models emerge, where old ones fall. Innovation and disruption are abundant. Digital photography replaced Kodak.12 Bookstores have suffered not only from online retailing of physical books, but also from eBooks and the change in reading habits that go along with them. Uber has successfully and controversially taken away market share from established taxi companies. iTunes, Spotify and Netflix have changed how we consume music and films. Airbnb and TripAdvisor have transformed travelling. Skype, WhatsApp, and Facetime have done the same for communication. And online banking, mobile cash and crowdfunding are reshaping our use of money.

Thus, the digital economy is now estimated to account for more than 20% of GDP worldwide13 The European Commission has called it “the single most important driver of innovation, competitiveness and growth.”14 Many expect this mo-mentum to continue with accelerating speed and with profound implications for people and planet – both in terms of opportunities as well as risks. The impact of the digital economy on employment is a case in point. Selfcheckouts crowd out human cashiers, computers sit in for persons in call centers, and online banking reduces bank staff. In their bestselling 2014 book “The Second Machine Age”, MIT’s Erik Brynjolfsson and Andrew McAfee share an optimistic picture about technological progress, but also caution against the significant risk that it will put many jobs at risk as tasks that were previously thought to be uniquely human are taken over by robots and algorithms.15 At the same time, new jobs emerge. Apple estimates that the applications designed for its smartphones have helped create more than 600,000 new jobs.16 The European Commission forecasts “that if all EU countries mirrored the performance of the USA or the best-performing EU countries, 400,000 to 1.5 million new jobs could be created in the EU internet economy.”17 2.2. Technologies The digital economy is built on a myriad of technologies and products. Key pillars include the internet, smartphones, broadband and mobile networks, Radio Frequency Identification (RFID), sensors (to detect changes in the environment), as well as a rapidly expanding universe of software. Increasingly, these technologies are not only used by users to communicate with other users or devices, but also to enable smart devices to communicate with each other in what has been coined the “Internet of Things” (IoT). A washing machine that starts automatically after the sun provided enough energy for the house photovoltaic system, and sends a message to the homeowner that it has started and when it expects to finish is a case in point. The rapid fall in costs for sensors, processing power and communication are key enablers of this development.

3. Digital Infrastructure and Sustainability:

The digital economy has significant social and environmental repercussions. In that context, IISD (2010) distinguishes between „direct effects” of the ICT sector itself, “enabling effects” through the use of ICT in e.g. smart energy grids, buildings and transportation, and “systemic effects” by “enabling the transformation of economic, social and governance structures, and supporting fundamental changes in the values, attitudes and behavior of individuals, as citizens and consumers.”22 Similarly, SCF Associates (2009) identifies the following first, second, third and fourth order effects: 1. Effects “due to the physical existence and use of ICT plus manufacturing processes involved, e.g. pollution and energy to manufacture and for disposal, etc.” 2. Effects “created by the application of ICT to optimize unsustainable consuming processes, i.e. power saved by use of ICT in applications.” 3. Effects “due to the aggregated effect of large numbers of people using ICT over the medium to long-term as ICTs can have substitution effects, e.g. for physical travel, saving on travel, road congestion, with knockon effects, in road construction, etc.” 4. Effects due to improvements in “society’s overall decision-making capacity to implement sustainability policy, with metrics to measure impacts in real time” A key sustainability aspect of digital infrastructure is its use of resources. Global sales of PCs, tablets, ultra-mobiles and mobile phones amounted to 2.4 billion units in 2015.23 With all these devices comprising dozens of minerals, metals and compounds their material intensity and thus their social and environmental effects are profound. The role of tin in smartphones provides an example. Tin is a key component in phones and other electronic gadgets. Almost one third of global tin supply is pro-duced on the Indonesian islands of Bangka and Belitung. Several reports have highlighted the social and environmental harm caused by tin mining in the region – including injuries and fatal accidents when mines collapse, loss of forest and farmland, as well as damages to marine life.24 Box 3: Fairphone – A Smartphone with Minimal Harm to People and the Planet Fairphone is a Dutch social enterprise that designs, produces and sells smartphones with “minimal harm to people and the planet.” It aims to create positive social and environmental impact – in particular through long-lasting design and reparability, the use of fair materials, as well as the provision of good working conditions. Its modular design makes it easier to replace single parts. The longer use time that results from that reduces CO2 emissions by 30% across its life cycle. The company started in 2010 as an awareness campaign to highlight the use of conflict minerals from the Democratic Republic of Congo in smartphone supply chains. Back then, the sole intention was to engage the Dutch public in designing the prototype of a “fair” smartphone and thus to create awareness for the role of conflict minerals in its supply chain. The launch of a functional commercial product was not on the agenda. Nonetheless, in January 2013 the campaign became a social enterprise and by Christmas 2013 delivered its first batch of Fairphones to consumers. It launched the Fairphone 2 in December 2015 and in May 2016 crossed the mark of 100,000 Fairphones owners – an important milestone, but still a relatively small number compared to other big smartphone producers: Samsung alone shipped 72.5 million devices worldwide in Q3 2016.

Energy consumption of digital infrastructure is another significant sustainability factor. The expanding use of digital technologies increases the need for reliable and secure power supply – and thus the vulnerabilities in case of failure. Electricity has been the backbone of industrialized societies for a long time. With digitalization, our dependency on power is increasing even further. The 2003 blackout in the Midwest and Northeast United States as well as Ontario, Canada, which affected 50 million people and lasted for four days for some of them, is a case in point. It also resulted in an estimated economic loss of 6 billion US$.26 Moreover, rising energy demand for digital technologies has important environmental repercussions. The use of energy to cool data centers as well as to adjust to air temperatures, humidity and pressure is reported to account for 2% of greenhouse gas emissions worldwide, thus putting them on par with global aviation.27 In 2013, the energy consumption of data centers in the US was estimated to amount to 91 billion kilowatt hours of electricity – the equivalent to the yearly output of 34 large coal-fired power plants.28 Apple’s iPhone uses about 2 kWh per year if it is charged daily. An average laptop uses about 72 kWh and an average desktop computer uses 300 kWh per year.29 Thus, the 231 million new iPhones sold in 2015 and the 277 million new laptops and desktop computers that were shipped in the same year, leave a sizable sustainability footprint – not just in terms of resource use, but also through their energy consumption.30 As more and more people get connected to the Internet and use smart devices energy consumption through digital infrastructure will increase. Nonetheless, the net effect in terms of energy savings may still be positive. In fact, GeSI (2015) estimates that expanded use of ICT technologies will lead to an increase in the carbon footprint of ICT infrastructure by 1.25 Gt CO2 until 2030, but during the same period to a footprint reduc-tion of 12 Gt CO2 due to the positive enabling effects of ICT across all sectors. Box 4: The Carbon Footprint of Google Google disclosed its carbon footprint for the first time in 2011 and has since reported its CO2 emissions on an annual basis. In 2015, its total emissions of CO2 equivalent amounted to just under 3m tons – an amount that the company matches with carbon offsets to bring its net emissions down to zero.31 In 2016, the company sourced more than 50% of its energy from renewables. It also announced that it has become the “largest corporate buyer of renewable power, with commitments reaching 2.6 gigawatts of wind and solar energy”, and that it will reach its goal of 100% renewable for its global operations by 2017. In 2015, Greenpeace rated the company with a “B” on “Energy Transparency” as well as “Renewable Energy Commitment and Siting Policy”, and with an “A” on “Renewable Energy Deployment and Advocacy”. Greenpeace also offers the “Click Green Scorecard” as an add-on for the Google Chrome web browser, which shows to what extent websites are powered by clean or dirty energy.32 From a social perspective, access to digital infrastructure remains a key challenge. By end-2016, the number of people not using the internet stood at, 3.9 billion people – more than half of the global population. In Europe, 20% of the population is offline. In Africa that share amounts to 75%. Across the world, highlighting a divide across gender lines, 51% of the men use the internet, whereas only 45% of women are online. Fixed broadband penetration remains below 1% in Least Developed Countries (LDCs) compared to 30% in the developed world. Fixed broadband prices are five times as high in LDCs compared to the costs in developed countries. Bandwidth per inhabitant amounts to 131 kbit/s per inhabit-ant in Europe, in stark contrast to 13 kbit/s in Asia and 6 kbit/s in Africa.33 Divides also persist within countries. The differences in internet usage across age and income within Switzerland mentioned earlier are a case in point. When Google started providing Fiber access in Kansas City, a survey showed just 10% of residents in low-income neighborhoods taking up the service, compared to 42% in middle and high-income areas. 21% of those who did not subscribe in the low-income neighborhoods cited costs as the reason for not subscribing.34 In addition to different levels of access, the digital divide also results from a gap in competencies to exploit digital technologies. In that context, the OECD reports vast differences in ICT skills and calls for more emphasis on “promoting strong levels of foundation skills, digital literacies, higher order thinking competencies as well as social and emotional skills.35 Box 5: Digital Divide Data (DDD) and Impact Sourcing Digital Divide Data (DDD) is a social enterprise that delivers business process outsourcing services to clients worldwide. Established in 2001 in Cambodia, the firm today has staff of over 1200 across Asia, Africa and North America. DDD offers digital content, data and research solutions such as eBook conversion, newspaper and archive digitization, data entry, and web research. Its services are provided by youth from low-income families in developing economies, as well as, since 2014, military spouses and veterans in the United States. Its social model provides its employees with opportunities to generate income and access to higher education as well as skills development. The company has been a key driver of a broader movement coined “Impact Sourcing” to leverage global sourcing for development. In September 2016, a group of leading buyers and providers in the field launched the Global Impact Sourcing Coalition

4. Digitalization and Sustainability across Markets:

While digital infrastructure has significant sustainability implications, digitalization also brings along vast sustainability opportunities and risks through new products, services and business models. Against this background, the following chapter focuses on the key role the digital economy plays in six key markets: Energy, Food, Health, Housing, Mobility, and Finance. It offers a short introduction into digital developments in each of these realms, explores the opportunities and risks of digitalization, and presents solutions to harness digital technologies for sustainable development. 4.1. Energy Our modern society needs sustainable, reliable and secure energy supply, which not only provides and stores green energy (i.e. hydroelectricity, solar, wind, etc.), but is also able to integrate these power forms from various sources, e.g. private solar panels. One of the biggest challenges to integrate renewable energy into the grid is the fact that it does not steadily produce energy. This leads to fluctuation in the grid with peaks and lows in supply. Smart grids play a growing role to balance power generation with demand and increase efficiency. Compared to a traditional grid, which is designed to take power from central generators and carry it to several customers, smart grids are able to use two-way flows of electricity and information. This allows them to create an intelligent and automated energy delivery network.37 It also allows producers to monitor consumer behavior to the effect that the system can adapt quickly to peaks in consumption. Digital technologies are at the heart of smart grids. Smart meters that allow realtime tracking of power consumption by endusers are a case in point. Smart household appliances that communicate with the grid and react to signals from energy providers to reduce energy consumption during times of peak demand are further key components. Data collection, management and analysis are additional key pillars. Box 6: DEPsys – Monitoring the Smart Grid Switzerland-based DEPsys was founded in 2012 to create a real-time management tool for a stable feed-in of renewable energy into the grid. The company’s vision is based on the belief that “the world should be powered entirely by renewable energy”. Against this background, its core product “GridEye” provides a smart grid platform to measure, monitor and control the lowvoltage grid for an efficient integration of renewable energy sources at decentralized injection points. The hardware components of the platform are used to measure and control data and to communicate with each other. The data is then analyzed to optimize grid performance by reducing peak loads, efficient use of all decentralized energy sources and adaptions to customer needs. The server provides visualization, configuration and data management applications and is accessible through a web browser. It can also be used as a database and backup system. In 2014, Bilan selected DEPsys as one of the 50 best Swiss start-ups to invest in. In 2015, the company was ranked among the best 100 start-ups in Switzerland. In 2016, the company received 3 million CHF of financing from Statkraft Ventures, VNT Management and ONE CREATION.38 Smart grids also provide the infrastructure for the growing role of “prosumers” – consumers that produce power themselves for their own use and to feed it into the network. Decentralized electricity generation accounts for an increasing share of global power production. In 2015, Europe had more than 2’800 energy cooper-atives. In Germany, the number of renewable energy cooperatives increased from 67 in 2008 to 772 by 2014. Nearly half of the renewable energy capacity in Germany is owned by private households and farmers. Decreasing costs of distributed power generation and energy storage are key drivers of this development.

4.2. Food :

The agricultural sector must face major challenges in the future. Food demand is projected to increase by at least 60 percent until 2050 compared to a 2006 baseline. Climate change and resource scarcity pose growing obstacles to meet this requirement. Against this background, the most recent annual report of the Food and Agricultural Organization highlights theneed for “a profound transformation of food and agricultural systems worldwide”.42 Digital technologies can play a key role in addressing these challenges. Precision farming is a case in point. Bringing together various components such as sensors, cameras, and GPS it allows farmers to apply precise amounts of water, pesticides and fertilizer at the right time to their crops – and thus to reduce the amount of inputs while at the same time increasing yields. Data collection and analysis on weather, soil and air quality stand at the core of this approach.43 The Global eSustainability Initiative and Accenture estimate that by 2030 the increased use of digital technologies in agriculture can raise average global crop yields by 30%, reduce food waste by 20%, lower annual CO2 emissions by 2 Gigatons, and create 2 billion US Dollars in additional revenues in the sector.44 Box 8: CombaGroup – The Smart Lettuce CombaGroup was started in Switzerland in 2011. The company works together with salad packagers and sets up greenhouses to grow salad right next to the packaging fabrics. Its innovative use of aeroponics – the growing of plants in an air or mist environment without the usage of soil – consumes 90% less water, 90% less space and reduces the carbon footprint by 20% compared to traditional ways of growing. IT controls the temperature and air moisture. It also provides the right mix of water and minerals for an irrigation robot to spray on the salad roots in controlled intervals. The resources, which are not used by the plants, are recovered and recycled. The result is locally-produced salad without the use of pesticides and herbicides all year-round and significantly lower environmental impact.45 Increasing crop yields are an important, but not a sufficient step towards global food security. The eradication of hunger will depend largely on an increase in purchasing power indeveloping countries. In that context, digital technologies can play an equally important role – also regarding agricultural incomes and safety nets. The use of RFID technology in livestock insurance (see below) and the offering of weather insurance through cell phones, as provided for example through ACRE Africa46, are cases in point.

4.3. Health

Digital technologies already play a significant role in healthcare today and are expected to have an even profounder impact on the sector moving forward. ICT adoption in healthcare has followed a similar pathway as in other industries since the 1950s and led to the use of IT in standardized tasks such as accounting and payroll, as well as the processing of vast amounts of data and supply chain management. Fast forward to the 2010s, and the picture becomes much more diverse with a convergence of health technology, genomics and ICT providing an expanded digital healthcare offering.55 Components of digital healthcare range from electronic medical records, mobile health apps, telemedicine to wearables. Digital patient record

such as the “My Health Record” in Australia, the EU-funded “MyHealthAvatar” app, online platforms for medical consultations such as “DrEd”, as well as wearables such as “Fitbit” which track steps, distance and calories burnt, are examples in this context.56 Wearables are smart devices, which are worn on the body of the user, e.g. smart watches or fitness trackers. These devices can monitor body functions and encourage the wearer to be more active. A current project in this field is the development of a smart lens by Verily Life Sciences, a sister company of Google, and Alcon, a subsidiary of Novartis. The prototype, which was introduced in 2014, has sensors and a radio antenna thinner than a human hair and is able to measure glucose levels in tears – thereby allowing diabetes patients to control their blood sugar.57 Box 11: Visolino by obvita As more and more schools use iPads in classrooms, doors are opened for the inclusion of visually handicapped persons with such features as a zoom function or “Voice-Over”. But often this is not enough to follow the lesson. Visolino by obvita was started to address this challenge. obvita is a Swiss non-profit association with the aim to help and improve the life of visually handicapped individuals through different projects, courses, and activities. One of its projects is their app called Visolino for iOS. It is designed to help visually handicapped students to participate in reading, writing and mathematics and to cover further their special needs. It allows user to — change the contrast of the window of each learning content to fit the need of each student — change the size of fields, texts and numbers — use an external keyboard, so that the monitor only contains necessary information — use the app with a braille terminal The project was started in 2015 and devel-oped by the obvita association in cooperation with teachers, students as well as internal and external IT-specialists. The app was funded by obvita and other charitable organizations and released in April 2016.

4.5. Mobility:

I want to start this section with a quote from my father, who worked as a mechanic for almost 30 years, from ten years ago: “The future of our mobility lies not in the fact, what we drive, but who drives it. In 15 to 20 years we will have self-driving cars and relax during our road trips.” It seems as if his prophecy will turn out to be true. Self-driving cars are going to be one of the biggest changes digitalization is going to bring for our society. These cars, also called autonomous vehicles, “are vehicles that are capable of sensing its environment and navigating without human input”.76 They offer the possibility to connect with other cars and reduce accidents. Furthermore, if these cars are electric, they can be integrated into the grid and function as energy storages. Every big car manufacturer then, its self-driven fleet had collected 2 million miles. Audi, BMW and Daimler formed the “5G Automotive Association” together with Ericsson, Huawei, Nokia, Intel, and Qualcomm in September 2016 to use 5G technology to better connect vehicles with each other. Tesla introduced its semiautonomous “Autopilot” feature in late 2015, which enables hands-free control for highway and freeway driving. Apple launched its self-driving cars in December 2016.77 Autonomous cars offer several benefits in terms of sustainability. They could reduce the number of accidents significantly.78 In 2013, according to the WHO, 1.25 million people died in road accidents worldwide.79 Reducing this number would not only decrease personal tragedies, but also lower the costs for hospitals and insurances. To make this possible, technology is required to let cars communicate and warn each other of obstacles on the road. The same technology could be used to find parking spaces quicker and optimize routes, thereby saving time and fuel. Furthermore, autonomous cars could increase the mobility of elderly or disabled people, as they can now use a car without driving it by themselves or with the help of others. There is also an opportunity for autonomous cars to boost car sharing, if automotive and/or IT companies provide cities with autonomous car sharing fleets and a well-organized system to use them. This could provide significant relief to city infrastructure (e.g. through reduced traffic and lower demand for parking spaces) But autonomous cars and their interconnectedness also pose risks. The potential for technology abuse raises particular concerns. In that context, one of the worstcase scenarios is that hackers would take control over autonomous cars and only give it back in return for money. Moreover, possibly wide-ranging effects of technological failures give reason for caution. Sensor systems may not be able to fully capture the surroundings, which could lead to accidents. A deadly example is the crash of a Tesla in autopilot mode in mid-2016, which was not able to “distinguish a large white 18-wheeland IT

truck and trailer [against a bright spring sky].”80 There is also the possibility that people use autonomous vehicles more often as the time during travels can be used for productive work, thereby increasing the use of energy and pollution. Another important point to mention here is, that as autonomous cars are more convenient to drive, more people may buy one, thereby raising resource and energy use, increasing traffic, and thus placing a higher burden on cities’ infrastructure. Moreover, self-driving cars will have significant effects on employment – in particular on the jobs of truck and taxi drivers. Self-driving trucks hit the road in the US state of Nevada in May 2015. A year later, a self-driving convoy crossed Europe to reach the port of Rotterdam. In September 2016, UBER introduced self-driving cars into its fleet in Pittsburgh. Shortly thereafter it expanded this offering to San Francisco. Governments need to prepare for the impact of this development. The fact that the US alone has 3.5 million truck drivers offers an indication for the scale of the challenges disruption in this sector may pose.81companies such as Google and Apple are working on this topic. Google started its autonomous car driving project in 2009 and renamed it into Waymo in 2016.

4.6. Finance:

Digital technologies have played a growing role in finance for a long time. The use of ICT in payments systems, the withdrawal of cash from ATMs, and the integration of vast amounts of data into investment processes has been around for decades. Today, digitalization is making inroads into the sector with accelerating speed. Under the headline of “Fintech” innovative digital technologies are becoming an ever more important and disruptive factor. Paying by smartphone, raising capital through crowdfunding, investment analysis from roboadvisors and new currencies like Bitcoin are cases in point. While the impact of these developments on customers and financial services providers is being analyzed indepth, a solid debate on the broader implications of Fintech for society is yet to start. The disruptive power of Fintech can lead to cut in costs and improve the quality of financial services. Lower interest rates for loans, better algorithms for assessing risk, and smaller fees for money transfers are examples in this context. Efficiency gains through Fintech may also offer opportunities to make finance more inclusive and expand services at a lower scale – in particular also for SMEs that may benefit from more tailored solutions.88 Innovations in payment systems stand at the core of this development. New payment services range from new offerings by banks, established non-bank players (e.g. Facebook and Apple), and start-ups. “Mobile wallets” allow users to make retail payments through their smartphones, and new crossborder platforms allow individuals to transfer money abroad at significantly lower costs.89 In view of the high fees that are currently charged by incumbents (e.g. Western Union), the reduction of transaction costs for the 600 billion US$ in annual international remittances would play an important role in increasing the flows to migrants’ friends and families and thus supporting development.90 Crowdfunding and peer-to-peer lending are further fintech developments to watch – also from a sustainability perspective. Crowdfunding can take different forms. Some projects take grants or offer non-monetary rewards to their funders (donation and reward-based), others provide shares in their ventures (equity-based), and a third category takes out loans (debt-based, peer-to-peer (P2P) lending).91 Total crowdfunding volumes in 2015 were estimated at 34 billion US$ - with P2P lending accounting for 25 billion US$, reward and donation crowdfunding for 5.5 billion US$, and equity crowdfunding for 2.5 billion US$.92 Crowdfunding is increasingly also used to fund sustainability initiatives. In that context, Solar Plaza estimated in 2015 that 165 million Euro hade so far been raised through crowdfunding for renewable energy projects.93 Box 18: bettervest – Crowdfunding for Energy Efficiency Germany-based bettervest was founded in 2013 as a crowdfunding platform for energy efficiency investments. The platform enables individual investors to fund energy efficiency projects by companies, NGOs, and governments across the world. The minimum investment is 50 Euro. Funders receive a fixed interest rate that is paid outof the energy savings.The company reports that it has so far supported 49 projects and thus contributed to a reduction in CO2 emissions of 4,700 tons.

5. Conclusion:

The sustainability effects of an increasingly digitalized economy are significant. And while a 20+-page study can only scratch the surface of the topic; I hope this report provides readers with a starting point to further explore the potential benefits and drawbacks of the digital economy for sustainability. Much remains to be explored. Digitalization affects almost every aspect of our lives. The change is happening right now. And nobody fully knows the direction it will take us to. Digitalization offers great benefits not only for our personal lives, but also to pursue sustainability objectives. It can play an important role in addressing climate change. It allows farmers to be more productive and use fewer resources. It opens new pathways to healthcare. Self-driving cars could significantly decrease the number of accidents and make our whole traffic system more efficient. And fintech provides innovative platforms to bring funding to sustainability initiatives. But digitalization also has a dark side. Many materials required for ICT are either dangerous to the environment, mined under hazardous conditions or both. Intelligence agencies use personal smart devices for mass surveillance. The IoT, with its low security standards, can easily be transformed to a botnet and be used for hacker attacks. Moreover, digital disruption can create social problems: What will happen to people whose jobs are taken by machines or robots? Who is going to take care of them? In addition, digitalization brings along significant risks of “rebound effects”, i.e. reductions in efficiency gains because of a counterbalancing increase in demand. Autonomous cars may make current traffic flows more fuel efficient. But they may also be used more often and for longer distances, thereby undermining the positive effect (e.g. less fuel used) and increasing the negative impact (e.g. more pollution). Smartphones may make life easier and increase efficiency in certain tasks. But they also lead to more products being bought, more resources needed in production as well as more waste and emissions. We may save energy and ime with our new devices and applications, but these savings could be easily offset if we buy too much and use them too often. To draw a conclusion, I think the future can be bright and that the positive effects of digitalization can predominate its negative implications – if we make the right choices and if policy makers, business, customers and NGOs work together and adopt new technologies in a responsible and sustainable way. To make this best-case scenario come true policy makers should pass clear laws, thereby eliminating grey zones, restrict the power of intelligence agencies, create social plans for workers, whose jobs are taken by machines and offer incentives to invest in green and sustainable technologies. Business should commit to green digital technologies and be a role model in adopting them. Customers should use available technologies to inform themselves more about what and from whom they are buying things and use this information to increase the number of sustainable products offered. They should also install smart devices and applications to live more sustainably. Furthermore, private persons should give thorough thought how to protect their data, how many smart devices they really need and how much personal data they want to disclose in the Internet. Universities must play a key role in this process. In that context, I also hope that this report allows oikos to expand its activities on the topic and that the following conclusion box provides a helpful input for future initiatives. I look forward to remaining engaged in that.