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Futures 36 (2004) 903–920

www.elsevier.com/locate/futures

De-materialising and re-materialising: digital


technologies and the environment
Frans Berkhout , Julia Hertin
SPRU-Science and Technology Policy Research, University of Sussex, Falmer, Brighton, East Sussex
BN1 9RF, UK

Abstract

Drawing on recent literature on the environmental impact of information and com-


munication technologies (ICTs) and the Internet, this paper identifies three main types
of effects: direct impacts of the production and use of ICTs on the environment
(resource use and pollution related to the production of infrastructure and devices, elec-
tricity consumption of hardware, electronic waste disposal); indirect impacts related to
the effect of ICTs on production processes, products and distribution systems (de-materi-
alisation, substitution of information goods for material goods, and substitution of com-
munication at a distance for travel); and structural/behavioural impacts, mainly through
the stimulation of structural change and growth in the economy by ICTs, and through
impacts on life styles and value systems. This paper argues that the diffusion and use of
ICTs are leading to both positive and negative environmental impacts. However, because
the effects of ICTs on economic activity are pervasive, their impacts on the environment
are difficult to trace and measure. The paper argues for a need to move beyond the
dichotomy between pessimism and optimism demonstrated in much of the emerging
literature. Instead the relationship must be recognised as complex, interdependent, deeply
uncertain and scale-dependent.
# 2004 Elsevier Ltd. All rights reserved.

Keywords: Information and communication technologies; Environment; De-materialisation; Innovation

1. Introduction

The relationship between the development, diffusion and use of information and
communications technologies (ICTs) and the broader social goal of sustainability is


Corresponding author. Tel.: +44-1273-877130; fax: +44-1273-685865.
E-mail address: f.berkhout@sussex.ac.uk (F. Berkhout).

0016-3287/$ - see front matter # 2004 Elsevier Ltd. All rights reserved.
doi:10.1016/j.futures.2004.01.003
904 F. Berkhout, J. Hertin / Futures 36 (2004) 903–920

not well understood. Large and growing efforts have been made to understand the
emergence of ICTs as a ‘general purpose technology’, and to analyse their impacts
on the economy and on society. Until recently, these studies have been concerned
primarily with a specific range of impacts attributed to the technology: changes in
work organisation and worker productivity; structural change in the economy, and
ultimately, prospects for economic growth. The rise of communication networks
has also produced a flowering of research concerned with the process of ‘globalisa-
tion’ in its many facets; the reshaping of the political authority of the nation state;
questions of identity, group formation and new forms of civil activism; problems
about the governance of the Internet and its impacts on democracy; the ‘digital
divide’ and so on [7].
Impacts on environmental sustainability have only in the last few years become
the subject of systematic research.1 This is partly because compared to more tra-
ditional industries, like energy, transport and manufacturing, the overall environ-
mental burdens linked to the production and use of ICTs have appeared to be
small. But research into the links between ICTs and environmental sustainability is
also limited by a lack of systematic analysis and reliable data. Although statistical
sources about the diffusion and the economic contribution of ICTs exist (e.g. Ref.
[39]), they naturally lag behind a fast changing reality, and medium and long-term
forecasts have proven to be unreliable.
Given that we cannot have a complete picture of the development of ICTs, dis-
cussion of environmental impacts arising from these future activities will also
necessarily be circumscribed. This is particularly relevant because numerous studies
and life cycle assessments have shown that the net environmental effects of specific
technologies, such as video conferencing, online retailing and electronic directories
largely depend on the specific circumstances of deployment and use (see for
example, Refs. [31,43,53]).
Due to these limitations, it is too early to come to a definitive assessment of the
environmental impacts of information technologies. This paper aims to map out
the most important linkages between ICTs and impacts on the environment, pro-
viding a qualitative assessment of the risks and opportunities stemming from the
information revolution. The paper begins by describing three ICT–environment
links: direct; indirect; and structural/behavioural. Each of these effects is discussed
in turn in the following three sections. We conclude with an assessment of the
relationship between ICTs and environmental sustainability and a reflection on
effective and forward-looking policy strategies.

2. De-materialising or re-materialising?

The current debate about digital technologies and the environment is char-
acterised by a stark contrast between optimistic and pessimistic assessments. To

1
See for example recent special issues of the Journal of Greener Management International (winter
2000) and Industrial Ecology (spring 2002).
F. Berkhout, J. Hertin / Futures 36 (2004) 903–920 905

some, environmental effects of ICTs appear to be exclusively positive because


‘information’ is generally considered to be distinct from material and energy, and
to act as a substitute for the use of material resources. One of the Internet’s early
gurus, Kevin Kelly proclaimed ‘‘The net wins. . .displacement in our economy of
materials by information. . .displacement of mass with bits. . .take away the mass of
radiator, axle and drive shaft by substituting networked chips. . .’’ [29]. Coyle
argued that the digital world is about as close to weightless as is possible [10].
According to Nicholas Negroponte ‘‘. . .the information superhighway is about the
global movement of weightless bits at the speed of light’’ [37]. If economic value is
increasingly generated by the intangible and the weightless, then perhaps post-
industrial economies are further liberating themselves from the awkward impera-
tives of extracting, manipulating and drawing value from material goods and
services. In an October 1996 speech, Alan Greenspan, Chairman of the US Federal
Reserve Board said:

. . .Virtually unimaginable a half century ago was the extent to which concepts
and ideas would substitute for physical resources and human brawn in the pro-
duction of goods and services. ... Fiber-optics has replaced huge tonnages of
copper wire, and advances in architectural and engineering design have made
possible the construction of buildings with much greater floor space but signifi-
cantly less physical material than the buildings erected just after World War II.
Accordingly, while the weight of current economic output is probably only
modestly higher than it was a half century ago, value added, adjusted for price
change, has risen well over threefold’ (cited in Ref. [44]).

For others, however, ICTs represent a case of unsustainable production and


consumption. These authors stress the wide-ranging negative environmental
impacts of computers and other hardware, especially the fast-increasing waste
stream of electrical and electronic equipment. Short innovation cycles in hardware
and software have led to a high turnover of devices. New software applications
demand more speed and larger memory, leading to rapid obsolescence of standard
computer platforms. Under current conditions, it is usually less expensive and
more convenient to replace PCs, printers or mobile phones to accommodate new
software than to upgrade old devices. Many critics see the fast spread of ICTs as a
symptom for modern materialism and short-term consumerism, rather than as a
sign of de-materialisation.
This paper seeks to move beyond this dichotomy, arguing that there is a com-
plex and uncertain relationship between information technologies and environmen-
tal sustainability. To bring some clarity to the claims that are made, it is useful to
draw distinctions between direct, indirect and structural/behavioural effects of
ICTs and e-commerce (see Table 1).

(1) Direct effects of ICTs are predominantly negative and stem from the pro-
duction, use and disposal of hardware such as computers, screens, network
906 F. Berkhout, J. Hertin / Futures 36 (2004) 903–920

Table 1
ICT impacts on the environment
Positive impacts Negative impacts
Direct effects of ICT Environmental impacts of pro-
duction, use and disposal of ICTs
(e.g. electronic waste)
Indirect effects of ICT Improved efficiency, de-materialisation Falling prices for resource inputs,
and virtualisation, detection and, moni- proliferation of ‘intelligent’ devices,
toring of environmental change (e.g. partial substitution (e.g. e-shopping
intelligent logistics, electronic directories, as well as private shopping trips)
environmental sensors)
Structural and beha- Structural and life style transitions (e.g. Stimulating growth and re-material-
vioural effects of ICT growth of ‘light’ industries, green con- isation (e.g. growth of long-distance
sumerism) travel)

cables, etc. They are not greatly different from the environmental effects of
many other products, but pose a number of specific problems in terms of both
resource use, emissions and waste management.
(2) Indirect effects of ICTs are expected to be largely positive. Two main causes are
put forward. First, ICTs contribute to increasing the efficiency of production
processes, for example through computer-aided design (CAD), higher pro-
duction speed and scale, and greater control. Second, it is expected that a wide
range of products and services (insurance, access to information, music, etc.)
may become fully de-materialised. On the other hand, many of the digital
goods and services will come ‘in addition to’ existing goods and services, add-
ing environmental pressures.
(3) Structural and behavioural effects of ICTs relate to more fundamental processes
of change and may have both positive and negative outcomes. On the positive
side, the spread of ICTs contributes to a shift from an industrial economy
towards a service economy, which will tend to have lower levels of resource
and energy use (at the point of use). ICTs can also support behavioural chan-
ges in favour of a ‘greening’ of products and services. On the negative side,
efficiency gains could be offset by a so-called ‘rebound effect’, often observed in
the transport and energy sector. This occurs when efficiency gains (directly or
indirectly) stimulate growing demand that balances (or even over-compensates
for) positive environmental effects.

The main drawback of this classification is that it does not do justice to the role
of information in the shaping of knowledge and awareness about environmental
issues, or in enabling responses to recognised problems. ICTs have been central to
major developments in understanding environmental processes, and in providing
the means for investigating and mitigating the impacts of human activities. In this
sense, the ICT–environment link needs to be seen as two-way, including both
impacts that may be traced back to the use of ICTs, while also providing the
means for enabling a better understanding of those impacts.
F. Berkhout, J. Hertin / Futures 36 (2004) 903–920 907

3. Direct environmental effects of ICTs

Although important data gaps and fast changing technology do not allow a
detailed assessment, it is widely recognised that production, use and disposal of
ICTs have become a serious environmental policy issue. Current ICT systems rely
on a variety of different products with heterogeneous environmental characteristics
[30]. These include product groups such as personal computers, network servers,
mobile phones, cables and satellites, and peripheral devices (screens, printers, scan-
ners, etc.). Although these devices have different environmental profiles, ICT hard-
ware tends to have a short life span, uses considerable amounts of electricity, and
incorporates significant quantities of materials that are harmful to the environment.
3.1. Manufacture

Most ICT products consist of a large number of different components, e.g.


micro-chips, semiconductors, printed circuit boards, liquid crystal displays, and
batteries. The manufacture of many of these components has important environ-
mental effects. The production of semiconductors, for example, causes significant
air emissions (acid fumes, volatile organic compounds and doping gases), water
emissions (solvents, cleaning solutions, acids, metals) and wastes (silicon, solvents)
[16]. Overall, the manufacture of ICT equipment causes a variety of detrimental
environmental effects, related to energy consumption, water use and emissions of
acids, metals, volatile organic compounds, chlorinated solvents and other sub-
stances.2 Matthews shows that the ecological damage caused by computer manu-
facture is growing across several environmental domains (waste, energy,
greenhouse gas emissions) [35]. With regard to waste, it has been found that 98%
of the material used in PC production goes into the waste stream and only 2%
becomes part of the product [20].
ICTs are produced through global supply chains. A typical personal computer
contains 1500–2000 components sourced from around the world, and typically
transported by air. The complexity and scale of the global electronics sector means
that the aggregate environmental impacts of these supply chains are large, includ-
ing major transport energy and greenhouse gas emissions. Electronic commerce
may have the effect both of ‘shrinking’ the supply chain (by enabling greater con-
trol and reducing the number of steps) thus bringing environmental gains, but
it may also have the opposite effect, allowing supply chains to become more
‘globalised’, segmented and environmentally inefficient.
3.2. Use
ICT devices consume electricity. A typical medium-sized PC consumes about
1 kW h in an average working day. It has been estimated that an average office
computer is in operation for more than 2000 h a year (20% in active mode and

2
A recent study estimated that the production of a PC generated 130 kg of greenhouse gases and
30 kg of total waste [2].
908 F. Berkhout, J. Hertin / Futures 36 (2004) 903–920

80% in sleep mode) [53]. There has been a major controversy over the total use of
electricity by office equipment, with some estimates suggesting that 8–13% of US
electricity demand would be accounted for by office, telecommunications and net-
work equipment [24]. More recent studies have concluded that office equipment
currently consumes some 2–3% of US power, although this could grow to up to
5% over the next two decades [28,45]. But residential energy use is also growing
through the integration of ICTs into products and even commodities. These
include advanced television equipment, mobile phones, handheld personal digital
assistants and many other information appliances. For instance, a UK study pro-
jected that set-top boxes (integrated receiver decoders) could add some 6000 GW h
of power demand in the UK by 2010.3 Standby losses associated with other elec-
tronic consumer goods in the home are another major source of power use. These
devices account for 5–15% of residential energy use in industrialised societies [25].
3.3. Disposal

Accurate data about wastes from electronic equipment are difficult to find
because national waste statistics are not standardised and because ICT-related
waste is not always accounted for separately. A report by the European Environ-
ment Agency collated statistics for five electrical and electronic product groups
(fridges, PCs, televisions, photo copiers and toasters) and estimated that in these
categories alone the European Union generates almost 1.25 million tonnes of waste
per year [14]. In 1998, electrical and electronic waste was estimated to be 6 million
tonnes and thought to be increasing by at least 3–5% per year [8]. Much of this
growth is accounted for by new classes of products entering the market (mobile
phones, PDAs, DVDs, etc.).
An average PC weighs 29.6 kg and consists of metal (43.7%), plastics (23.3),
electronic components (17.3%), and glass (15%). The main area of concern for the
disposal of ICT hardware is its content of metals and other toxic or harmful mate-
rials. Particularly problematic are brominated flame retardants, solders, batteries,
semiconductors, plastic stabilisers and screens [14,51]. Because current product
design does not usually allow the separation and recycling of these metals without
further treatment, only a very small proportion of ICT hardware is currently recy-
cled. Two recent EU directives aim to address this problem (directive 2002/95/EC
on the restriction of the use of certain hazardous substances in electrical and elec-
tronic equipment and directive 2002/96/EC on waste electrical and electronic
equipment).
In summary, ICTs are now integrated in many ordinary consumer and com-
modity products. Many of these devices and components are energy-consuming
and have short life cycles and are composed of toxic materials. Already the wastes
generated and energy used by ICTs are significant in industrialised countries, and
this seems likely to increase in future.

3
Projection by the UK Market Transformation Programme (www.mtprog.com).
F. Berkhout, J. Hertin / Futures 36 (2004) 903–920 909

4. Indirect effects: understanding of the environment, resource productivity


and de-materialisation

Information and communication technologies now play a fundamental part in


our understanding of the environment, as well as in the development, production
and distribution of products and services. ICTs are essential to the measurement,
modelling and communication of environmental processes, while also having a
major role in improving the productivity of labour, capital and natural resources.
Although driven by the need to reduce costs, the optimisation of processes through
ICTs has often benefited the environment. This is not only because of improve-
ments in resource efficiency enabled through greater process control, but also
because efficient processes tend to be relatively less polluting.
Preliminary evidence to support this argument at the macro-economic scale has
been produced by several US studies [32,44]. Romm argued that in 1997 and 1998,
aggregate energy productivity in the US economy improved by more than 3%,
reversing a trend of slow declines in the previous decade. This he saw as being an
effect of the diffusion of ICTs into the economy. Similarly, Kelly [29] argued that
while US gross domestic product grew by 8% between 1996 and 1998, energy use
grew by less than 1%, again this was put down in part to the impact of ICTs.
4.1. Information effects

Sensors, monitors and other instruments collect information about the distri-
bution of resources (for example, seismic surveys for oil and gas), the environmen-
tal impacts of economic activities (e.g. emissions concentrations at production
sites) and the state of the environment (e.g. stratospheric ozone concentrations) at
all levels from the planetary to the microscopic. There has been a vast increase in
environmental detection efforts by governments and international organisations
over the past 50 years.
Understanding of environmental problems is mediated almost universally by
instruments linked to ICT networks and scientific interpretation. As environmental
problems are recognised at a broader scale (biodiversity, climate change), the
importance of sensing technologies in measuring the state of the environment and
in enabling an assessment of environmental health is likely to increase. Perceptions
of the environment are becoming increasingly separated from direct experience and
more dependent on instruments and computer-based models and analysis. The pro-
cesses by which sensing technologies and data analysis develop are therefore crucial
in shaping public and policy debates about the environment.
4.2. Production processes
ICTs enable the simulation of complex production systems to test and review
costs, material use, and environmental emissions of design options. Once in oper-
ation, sensors linked through communication networks and digital controls ensure
efficient and flexible operation of more integrated facilities. Modern production
systems can have tens of thousands of individual microprocessors embedded in
910 F. Berkhout, J. Hertin / Futures 36 (2004) 903–920

them, controlling valves, measuring temperatures, sensing the colour of fluids, and
performing other tasks [29]. These devices are a critical part of all modern pro-
duction processes, improving reliability, quality, safety and reducing waste. Today
up to 40% of the value of a new manufacturing plant is accounted for by digital
and computer-controlled systems. Precise control is fundamental to environmental
efficiency and management of production. But such improvements are not new.
They have been achieved consistently in industry since computers were first intro-
duced into manufacturing over 30 years ago. Historical trends suggest that the
introduction of devices like electronic sensors and controls lead to incremental pro-
ductivity improvements of between 1 and 2% per year in mature process industries
like paper and plastics [5].

4.3. Design and operation of products and services


Although the specific effects of design software and simulation tools are difficult
to disentangle from other developments (e.g. the use of new materials) they are
recognised as reducing waste in production and operation, and to generate more
efficient products. CAD has been a feature of design for products and processes for
some 20 years, and is now widespread.
Simple products such as packaging have been substantially de-materialised
through better design and through the application of software-based environmental
appraisal such as life cycle assessment. Well-known examples of this design-driven
de-materialisation include reductions in the weight of drinks cans. Aluminium used
in drinks cans fell by some 50% during the 1990s as a result of design improve-
ments, enabled by CAD, testing and quality control [3]. Many complex products
(cars, consumer durables) contain microprocessor controls enabling them to
respond to changing conditions of performance and environmental conditions.
Embedded controls improve the functionality of the product, but also influence
their environmental performance. All consumer goods, and in future also less com-
plex products, will embody microprocessors to control their behaviour under vari-
able conditions. Amongst other functions, they control emissions to the
environment, and the use of heat, water and other inputs. Other positive examples
come from the service industries, many of whose environmental impacts result
from the energy used in buildings. Together, residential and commercial buildings
use more than two-thirds of all electricity in industrialised countries, and infor-
mation systems are key to improving the efficiency of heating, cooling and lighting.
Simple control systems can provide 10–15% savings with current technologies, and
greater gains should be possible in future.
Substitutions of information for materials and energy have also been proposed
as leading to environmental benefits. The argument is made that electronic
devices will increase the ease with which information can be assimilated and
communicated, in the process reducing or eliminating the materiality
of information-intensive goods and services. Substitutions may be partial
(de-materialisation) or complete (virtualisation).
F. Berkhout, J. Hertin / Futures 36 (2004) 903–920 911

4.3.1. Print
Paper-based catalogues, directories, dictionaries, encyclopaedias, newspapers and
magazines are all believed to be under competitive pressure from cheaper and more
easily retrieved and updated sources of information on the Internet. The Boston
Consulting Group (BCG) [4] produced a comprehensive review of impacts of elec-
tronic media on paper use in the US, finding that in most cases there would be
pressures to reduce demand. Online newspaper and magazines are cheaper because
they do not have to support three of the major expenses of the print business:
newsprint, distribution and printing costs. On the other hand, these higher costs
will, to some extent, be counterbalanced by cost-savings introduced through the
increasing digitalisation of production, design and print processes which con-
tributed to a proliferation of print media in the 1980s and 1990s. These factors are
expected to play a major role in the decline in paper-based catalogues, directories
and information-based books. BCG predicted that substitution of on-screen infor-
mation for printed matter will outweigh the contrary trend—the greater use of
office papers as a result of the broader diffusion into office and home of digital
printers.

4.3.2. Audio/photo/video
The consumption of music offers significant potential for virtualisation. Down-
loading music in digital format (for example MP3) is a popular use of the Internet.
Although a fast Internet connection and sufficient memory capacity are required, a
large number of people exchange digital music files via specialised Internet sites.
Digital music can be played with freely available software and a standard home
PC. Once again, a critical unanswered question is how far these new technologies
will substitute for existing media (and therefore generate environmental benefits),
or stimulate new demand for devices such as MP3 players, mini disk players or CD
writers. Digital cameras record and store photographic images in electronic form.
The substitution of chemically processed photographic images by digitally pro-
cessed images for amateur, professional and medical/industrial uses may avoid
some of the environmental impacts of film manufacturing and processing [9].
A recent study suggested that digitisation of radiography would lead to savings in
X-ray film, and reductions in the use of developer and fixer [26].

4.4. Transport and distribution

Markets depend on information and exchange, and ICTs have proven powerful
enabling technologies in extending and deepening markets. The globalisation of
supply chains has contributed to the growth in global trade and so to the growth
in demand for transport and distribution services. On the other hand, information
technologies have also contributed to improving the efficiency of distribution. They
are opening up opportunities for replacing both goods and passenger transport
through technologies such as digital telephony, e-mail, Internet, and videoconferen-
cing. Overall, it appears that the evidence supports the view that there are
both substitution (digital communication replacing physical movement) and
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complementarity (digital communication stimulating new physical movement)


effects.4 Four key linkages between ICTs and transport are discussed below.

4.4.1. Supply chain efficiency


Increased co-ordination enabled by information technology has helped to make
supply chains better organised and more efficient [23]. In the US business, the aver-
age stock turn5 was 8 a year in 1995 but reached 13.2 in 2000. The net effect of this
was reduced and faster-moving inventories of goods, translating into significant
reductions in storage requirements (leading to energy savings) and less obsolete
stock. Market pressures may lead to further integration of supply chains. For
instance, electronic business-to-business procurement exchanges reduce costs,
inventory and wastage and increase utilisation of capacity. This may create
environmental benefits through resource productivity gains. However, some
efficiency gains could be offset by demand for high speed and just-in-time delivery
by road, tending to increase congestion and reduce vehicle utilisation rates.
Furthermore, the increased ordering options which e-business provides to both
business and consumers will result in more geographically-extended supply
patterns, and therefore higher transport intensity of goods.

4.4.2. Changing seller–buyer relationships


Mass customisation—production systems that manufacture products for individ-
ual consumers—was proposed some 10 years ago as an organising principle of
business, just as mass production by assembly line was the organising business
principle under Fordism [41]. In the mass production model, consumer demand is
predicted and a limited number of product lines are developed to meet that
demand. Through branding and advertising, consumers are encouraged to buy
goods that have already been manufactured and stocked. ICTs and the Internet
make mass customisation possible because they enable a rich exchange of infor-
mation between companies and individual customers. This allows goods to be
produced that match customer demands much more specifically. Several environ-
mental benefits have been proposed for mass customisation. First, production can
be matched more tightly to customer demand, reducing the energy associated with
inventories and warehousing. Second, products and services can be designed to fit
the needs of the consumer more precisely, reducing waste and improving environ-
mental efficiency. Third, the producer may be transformed into a provider of ser-
vices to the final consumer ownership of the products delivering services remaining
with the service provider. This may presage the development of ‘closed loop’ pro-
duct and service systems in which producers have incentives to reduce resource
inputs and environmental burden of goods in use, rather than simply in production
[50].

4
See Ref. [36] for a discussion of these concepts.
5
Average stock turn is a measure of the rate at which products are sold through retail outlets. A
higher stock turn denotes a more efficient operation.
F. Berkhout, J. Hertin / Futures 36 (2004) 903–920 913

4.4.3. Retailing
Shopping accounts for a substantial part of personal travel. Complete replace-
ment of car-based shopping trips by Internet ordering and van-based delivery
could reduce the distance travelled—by 70–80% according to one simulation [6].
However, e-commerce only accounts for a very small part of retail turnover [38]
and complete substitution is unlikely. Many forecasters predict that retailing will
come to place greater emphasis on the ‘experience’ of shopping, with low-margin
staples sourced using Internet ordering and home delivery. The limited survey evi-
dence of consumer responses to home shopping has found that they reported less
use of cars [6]. The transport implications of online retailing will depend on the
rates of growth that are experienced, and on the details of logistics and transport
systems. Before there is more empirical evidence about how customers respond to
home shopping, and the delivery patterns used by suppliers, claims made about
likely net impacts are difficult to substantiate.

4.4.4. Work organisation


The major hypothesised environmental benefits of telecommuting and telework-
ing (T&T) are the reduced need for office space and a reduced number of journeys
to work. A British study has estimated that telework has the potential to make up
to 5–15% of car journeys redundant [42]. While savings may be achieved in some
cases, there is also evidence that employees may be becoming more peripatetic in
some service sectors. In general, studies have shown that the potential for environ-
mental savings from T&T are likely to be small, or may be negative [18]. Evidence
from an evaluation of a UK teleworking scheme suggested that 47% of people
participating had reduced their commuting, with only 6% increasing their travel
[21]. However, offsetting changes in terms of equipment, heating and other services
in the home need to be taken into account. Equally controversial is the question of
how far video conferencing technology will reduce the demand for business travel,
especially by air [1]. There is recent evidence that use of teleconferencing is becom-
ing more widespread, but this may be as a complement to business-related travel,
rather than as a substitute.
4.5. Summary: realising efficiency gains
While significant potential for ICT-induced environmental savings has been
identified, real environmental gains may be hard to capture for a number of rea-
sons. First, the scope for de-materialisation and virtualisation may be limited. Sub-
stitution of information for material goods and services (digital music, e-books)
may occur, but the number of goods and services where complete virtualisation can
be achieved is limited. For most goods, IT is integrated in the design and delivery
of a product or a service, and does not substitute for it. The ‘virtual economy’
needs to be seen as intimately linked to the real, material economy, just as it is
embedded in the real, political world [46]. For instance, e-commerce is likely to
depend on the evolution of faster, more flexible transport infrastructures with
greater capacity, while virtualisation in audio sales will depend on IPR problems
being resolved.
914 F. Berkhout, J. Hertin / Futures 36 (2004) 903–920

Second, resource productivity gains tend to be slow in many technological sys-


tems. ICTs have become integrated into production processes and new products
over a long period so there is good evidence on the rates and direction of environ-
mental performance improvements that may be expected in the future. Evidence
suggests a continuation along well-established evolutionary trends, rather than
abrupt or radical changes in the rate of improvement. Third, while ICT and Inter-
net-enabled services may substitute for some ‘material’ goods and services, many
new digital and ‘intelligent’ goods and services will be complementary to existing
ones, especially during periods of transition from one technology to another. Just
as the use of computers did lead not to a ‘paperless office’, incomplete substitution
of old structures by new digital systems could result in additional environmental
burdens. Similarly, the behaviour of e-shoppers is likely to contain surprises, with
many choosing to do a part of their shopping online while still going to the stores
to buy other goods.

5. Structural and behavioural effects of ICTs

5.1. Structural change and resource use

At the macro-economic level, the notion of de-materialisation (or the ‘intensity


of use’ hypothesis) was first discussed in the 1970s, and produced the ‘Environmen-
tal Kuznets Curve’ (EKC) hypothesis [12,15,48]. Broadly, this argues that during
early industrialisation, economies use material resources (steel, cement, energy car-
riers) more intensively, until a threshold is reached after which structural changes
in the economy (the decline of manufacturing and the rise of services) lead to pro-
gressively less-intensive materials use.
Many authors expect ICTs to facilitate a de-coupling of economic growth and
environmental damage. The idea of the ‘knowledge economy’ promotes the notion
that economic value is created primarily through the manipulation of ideas, rather
than the exploitation of energy and materials. More developed economies are seen
as growing as a result of the more intelligent use of resources to produce greater
value, rather than through the addition of new resources. As evidence of this shift,
more than 40% of US investment in new equipment over the past decade has been
in the form of information devices and infra-structures [19]. Information technolo-
gies contribute to a long-standing structural change in the economy away from
materials-intensive activity and towards more service-based and information-inten-
sive activities. This occurs through the growth of IT-related services (e.g. software
development, Internet services, new advertising and marketing services, etc.), as
well as through the growth of traditional services that have been transformed by
the use of ICTs (e.g. financial services). However, service sectors are supported by
material infrastructures and transactions, and are not as ‘clean’ and ‘weightless’ as
is often assumed [33]. There is evidence that the rapid diffusion of ICTs speeds up
structural change in the economy, and therefore contributes to incremental
improvements in relative resource efficiency. But empirical evidence also shows that
F. Berkhout, J. Hertin / Futures 36 (2004) 903–920 915

in absolute terms these economies are still ‘materialising’ (i.e. getting more materi-
als-intensive), especially when the environmental burdens associated with traded
goods are included [34].
5.2. The rebound effect
The rebound effect has two main stimuli: falling prices and increased capacity.
As a result of induced productivity improvements and the growing scope and
specialisation of markets, the prices of raw materials and energy will tend to fall.
Cost pressures, one of the main drivers of eco-efficiency improvements, fall and
rates of improvement in resource efficiency should slow—at least in theory. The
producers of materials and energy for which demand falls will undertake efforts to
innovate new products and occupy new market niches. Because many materials
have a potential for substitution (windows can be made from wood, plastic or
aluminium for example), new markets for environmentally damaging materials
may develop.
The second mechanism is the creation of new demand. Many ICT applications
allow a better management of time, money, labour, transport infrastructure, and so
on, thus providing scope for new demand. Whether this new demand will offset
de-materialisation effects stimulated by the widespread diffusion of ICTs depends
largely on the collective choices of consumers. Will the money and time potentially
freed through the use of ICTs be spent in the consumption of environmentally
damaging goods and services, or through demand for ‘immaterial’ services? Anec-
dotal evidence suggests that the rebound effect is a real threat to incremental
efficiency gains. Although many digital devices (PCs, cellular phones) have been
substantially miniaturised and ‘de-materialised’, they have also increased the
capacity of the final consumer to consume by reducing transaction costs. By
enabling the integration of markets and driving down prices, these devices (and the
production–consumption systems they operate within) provide new opportunities
to access and consume both material and immaterial goods and services. In parti-
cular, the Internet increases the ‘reach’ of consumers, by extending choice of goods
and the range of providers. One concrete example of re-materialisation is docu-
ment access through the web, allowing for a printed paper copy in just a few
mouse clicks. Some US teleworking studies have found that initial reductions in
car travel are partially offset over time by stimulation of new driving [22]. Con-
founding evidence on energy intensities from Schipper and Grubb [47] suggests
that ‘rebounds’ in energy use as a result of energy price falls ‘‘. . .may have taken
back some of the overall savings, but most remain. . .’’.
5.3. Information and behavioural changes

Finally, new information technologies are likely to have wider impact on social
values, life styles and culture. These changes and their impact on the environment
remain speculative and here we highlight a few examples. A number of authors
have suggested that information technologies will enhance ecological transparency
[27] and give a new dimension to the phenomenon of green consumerism [49]. If
916 F. Berkhout, J. Hertin / Futures 36 (2004) 903–920

information about the environmental aspects of products, brands and companies is


more easily generated and more accessible through digital media, consumers can
more easily act on their green preferences, turning them into powerful market sig-
nals.
At the same time, citizen-consumers [49] can also be held to account if new
information systems make the environmental impacts of individual consumer choi-
ces transparent. Already today, there are websites that enable individuals to calcu-
late their personal carbon emissions or to assess energy efficiency potentials of their
household. More sophisticated IT tools for environmental management and
decision-making tools will doubtless be developed for both companies and con-
sumers (see Ref. [52]). In principle, property rights could be allocated more
efficiently (a carbon budget for households, for instance) providing the basis for
informational and economic incentives to induce changes in behaviour of produ-
cers and consumers [17].

6. Conclusions

The difficulty of establishing a direct link between ICTs and environmental or


resource productivity mirrors the ‘productivity paradox’—the longstanding debate
about the apparent absence of evidence of a relationship between investment in
ICTs and labour productivity [11]. At first sight, ICTs appear to have broadly
positive impacts on environmental sustainability, especially through structural
change in the economy and increased efficiency in production and logistics. We
have sought to show that such positive impacts need to be balanced against a
range of countervailing effects, including direct impacts of electronic devices and in
compensating behavioural changes that may be enabled by ICTs. Economic, social,
institutional and cognitive barriers are likely to prevent technical potentials for
resource efficiency from being fully exploited.
Over the long term, the net environmental effect of the information revolution
will depend on the balance between these ‘de-materialising’ effects, and the counter
‘re-materialising’ influences of economic growth and complementarity effects. The
digital economy is embedded in the material and economic world and physical
infrastructures, both its own (cables, computers, networks) and those that it coor-
dinates and motivates. Whether intelligent systems, products and services will
reduce the environmental impact of the economy depends largely on how they are
designed, used and supported by transport, energy and other systems. ICTs do not
necessarily lead to a more environmentally-sound future, but they offer new oppor-
tunities to develop more sustainable solutions. As in many other industrial–
environmental domains, the role of policy and regulation will be crucial if these
opportunities are to be captured. To know where opportunities lie and how they
can be exploited most effectively, we must improve our knowledge of the specific
links between ICT and the environment, both empirically and in terms of under-
standing paths of causation and interaction. The following section sets out some
future research priorities.
F. Berkhout, J. Hertin / Futures 36 (2004) 903–920 917

7. Research outlook

Much of the literature on the link between ICTs and the environment is highly
specific, identifying potential for environmental savings on the basis of isolated
case studies. It often involves simple modelling of potential direct effects of the dif-
fusion of a certain technology or technology-related phenomenon (if X is substi-
tuted with Y, this will lead to Z savings). Although this micro-level research is
valuable, it has a number of inherent limitations and stands in the way of general
findings. We agree with Mokhtarian’s [36] observation that single-application stu-
dies tend to overestimate the potential for environmental savings through ICTs.
Referring specifically to the literature on telecommunications and travel she
observes that:
‘. . .although direct, short-term studies of impact focusing on a single application
(such as telecommuting) have often found substitution effects, such studies are
incomplete and likely to miss the more subtle, indirect, and long-term com-
plementarity effects that are typically observed in more comprehensive studies’
(pp. 53–54).
In particular, micro-level studies are unable to handle feedback effects due to
responses in market demand and consumer behaviour. They are inevitably based
on assumptions, for example about rates of diffusion, willingness-to-pay, consumer
choices and so on. In an area as technologically immature as digital communi-
cation, these kinds of assumptions remain hard to validate and test [40]. For
example, medium- and long-term forecasts about the Internet and e-commerce
have been shown to differ greatly from each other (sometimes by several orders of
magnitude) and they have usually proven to be wrong.
A more systematic analysis of the full complexity of the relationship over the
longer term is now emerging, but it faces a number of methodological challenges.
The empirical evidence on which to draw conclusions is still thin. This is at least in
part because of the difficulty in producing explanatory models of technological
change linked to models of environmental change. The development of a tech-
nology—especially a general purpose technology—is shaped by, and itself shapes, a
wide spectrum of social, technical and environmental systems. As a consequence of
this interdependent relationship, the development of reference scenarios (how
would the sector have developed without the widespread adoption of ICTs?) and
the establishment of simple causal relationships (e.g. between a technical inno-
vation and an environmental impact) is likely to be problematic.
Given these challenges, we propose three main research approaches: macro-level
qualitative studies developing and assessing a range of alternative development
pathways mapping the long-term relationship between environmental sustainability
and ICTs (see Ref. [13]); macro-level quantitative studies of ICT-related and
environmental indices and the relationship between them (e.g. investment in R&D,
ICT-related GDP, energy and resource efficiency) (see Refs. [31,32]); and meso-level
analysis of sectoral trends and ICT effects that look across a range of sustainability
indicators to measure effects.
918 F. Berkhout, J. Hertin / Futures 36 (2004) 903–920

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