Overview

Without a crystal ball it is impossible to say what kind of impact the Internet and wireless communications will have on the environment. Its effects are unlikely to be limited to the ways in which we communicate. More likely, it will bring about a profound change in our society and culture and therefore the way in which we interact with our environment.
But for those who want to understand sustainable development in the Information Age it is studying e-commerce-the act of making money using the Internet-that may well provide the best case study for studying the problem. "E-commerce is the killer application," said Nevin Cohen, of the Tellus Institute, a Boston-based non-profit organization dedicated to sustainable development. "In the developing world, it is going to be advertising-based e-commerce that diffuses the technology to poorer people. And it is transforming industry, which is the sector of the world which has the greatest amount of impact on the environment."

In an attempt to probe this relationship, the New York Academy of Sciences and the Tellus Institute convened over 100 experts on e-commerce and sustainable development for the first symposium of its kind to address the potential impacts that e-commerce may have on the environment. The roster of international participants from industry, government, non-profit organizations, and academia discussed how e-commerce is affecting, and will affect, energy consumption, resource management and land use.

The two-day symposium highlighted some promising environmental trends that appear to stem from an information-based economy, especially in terms of overall energy consumption and reduction in the waste of raw materials by the manufacturing industry. It also identified a number of areas for concern: the possibility that e-commerce may eventually lead to increased power consumption, have a detrimental effect on land use, and promote rampant consumption both in the U.S. and overseas--leading to an unprecedented drain on threatened natural resources.

Because the participants were breaking new ground, the symposium highlighted many of the difficulties that will be faced in forecasting the environmental impacts of a new, pervasive, information technology like the Internet. Several speakers made predictions based on empirical energy data; others tried to model impacts based on potential changes in business practices driven by e-commerce; and some hypothesized impacts that must be studied experimentally. The consensus of most participants was that there was a greater need for research into the interactions between a complex, networked economy and the environment. Only then will it be possible to make predictions about the future health of the environment. Some participants warned however, that while it is necessary to take whatever action seems appropriate now, it will be impossible to predict what the information age will bring. It stands to so radically change our future that we can't predict what measures need to be taken in the present. Skip Laitner, senior economist with the US Environmental Protection Agency's Office of Atmospheric Programs used the words of British economist John Maynard Keynes to describe the paradox: "The difficulty lies not so much with the new ideas, but with escaping the old ones."

One fact acknowledged by all the participants was that the e-commerce revolution is upon us. In the last five years, as more and more businesses have opened shop in cyberspace, the way in which buyers and suppliers, customers and clients communicate and make deals has changed radically. Online companies are offering a dizzying array of new products and services from downloadable music to online trading. And the e-commerce wave is moving fast. Revenues from business-to-business (B-to-B) e-commerce are expected to reach $500 billion for the year 2000, growing to more than $1.3 trillion by 2003.

"History is moving in fast-forward mode," said Braden Allenby, vice-president of environment, health and safety at AT&T.

According to sustainable development experts and environmentalists, although e-commerce may eventually take the pressure off the environment, it's impossible to say for sure. "There's a growing consensus that the new e-commerce systems are going to have a significant environmental impact," said Cohen. And it's time to start paying attention before e-commerce becomes the way of doing business the world over. "E-commerce is barely beyond its toddler years," said Allenby. "Now it's time to pause and ask the question: 'What about the environment?'".

The ways in which e-commerce can impact the environment are as complex and interconnected as the Internet itself, but they can be broken down into a number of broad categories. The debate on the importance of these e-commerce areas on the environment is outlined below. In addition, discussions at the symposium produced a number of research objectives and institutional initiatives for each of the topics.

E-commerce and Energy

Jonathan Koomey, a staff scientist with the End-Use Forecasting Group at the E.O. Lawrence Berkeley National Laboratory, had similarly good things to say about the energy impacts, of e-commerce. Koomey's group studied the power consumption of the Internet itself by looking at data centers, or server hotels, that make up the backbone of the web. Data centers have been criticized for their massive power consumption, which could represent a "hidden" environmental cost of the Internet. The study found that data centers--usually erected in a hurry to meet constantly rising demand--are in fact overestimating their power requirements.

"One facility estimated that it needed 90 watts per square foot [of power] but it's actual consumption was 40 watts per square foot," said Koomey.

While such studies may be encouraging, their results should be treated with caution, according to Braden Allenby. While the correlation between a decrease in energy use and an increase in economic productivity is undeniable, to attribute this to e-commerce is not accurate.

"There's an implicit confusion of correlation and causality," Allenby said. "While it's fair to say that e-commerce doesn't appear to have a negative impact on the environment, you cannot show the opposite."

Moreover, while such a correlation exists today, that correlation will not necessarily be a long-term one. "In the short term you may see certain kinds of effects, but there's no guarantee that that's what you'll see in the long term as the system adjusts over time." Allenby warned.

E-Commerce and Product-Process Design

"The environment is not just about energy, just as information technology is not just about the Internet," said Valerie Thomas, a research scientist at the Center for Energy and Environmental Studies at Princeton University. "E-commerce should make use, re-use, and recycling more efficient because it is in this area that the use of information is currently zero," she said. According to Thomas, only two or three percent of recycling companies currently have web pages, but that "information technology can solve those market problems."

Thomas's research focuses on the use of electronically labeled products that can instruct recyclers exactly how to re-use components in the complex products of the information age, like cell phones. This "trash that thinks" could have huge benefits for the environment. Once a product has reached the end of its useful life it is currently far too expensive to disassemble it and sort out the recyclable, or toxic components from the disposable parts. But electronic tagging of components, linked to a web based database for recyclers could make the process simple and efficient enough to become economically worthwhile. "Products, in principle, could manage themselves," said Thomas.

E-commerce also has the potential to create enormous efficiencies in the manufacturing process, meaning that fewer raw materials, and even unwanted products, end up getting wasted. Mark Greenleaf, e-commerce strategy manager in material planning and logistics at the Ford Motor Company, predicts that Ford can improve the management of its raw materials by 30-percent using e-commerce practices.

"There's a lot of waste in the supply chain," said Greenleaf. His studies have shown that it can take anywhere from 14 to 28 days for word of a change in demand for raw materials at the factory to get back to the producer. What's more, because raw materials are bought in pre-agreed amounts and depend on bulk production runs there is a tendency for purchasers to do a lot of "rounding-up" by the purchasing department.

"A simple change in demand can cause a huge overestimate in the demand for raw material," said Greenleaf. He predicts that as e-commerce infiltrates companies like Ford, the clunky method of ordering raw materials will improve. "We need to move toward a network model where information is flown in both directions in real-time, without rounding."

E-Commerce and Logistics

"People make the right decisions if you give them the right information," said Ford's Greenleaf. As well as re-vamping Ford's supply chain using e-commerce Greenleaf also has plans for their logistical system. Right now supply routes between suppliers and big companies like Ford are dedicated to that particular supplier and operate "blind to one and other," said Greenleaf. Trucks make multiple trips from the same manufacturing plant spending, on average, half of their time empty.

WWe need to get into a holistic supply chain view," said Greenleaf. Greenleaf envisions a digitally scheduled and networked "e-supply chain hub," to remove inefficiency from the logistical system. What's more, carmakers are discussing sharing logistical networks because their raw materials needs are the similar, just as cereal manufacturers Post, General Mills and Kellogg's currently share their supply chain. "We don't compete on logistics," Greenleaf said.

However, logistical changes due to e-commerce also act at the other end of the spectrum. With more and more people buying goods over the Internet the use of supply and transportation networks could change, and not necessarily for the better. Catherine O'Dea, director of the sustainable commerce program for Business for Social Responsibility (www.bsr.org/), a non-profit organization based in San Francisco, warns that as more and more people shop online, they may not necessarily be cutting down on trips they make in their car. Many consumers rely on stores to "experience" products they may end up ordering online. This behavior, while completely natural, places an increased burden on supply systems and therefore the environment, first for the trip to the store, then for the delivery of the product.

Reggie Caudill, executive director of the Multi-Life Cycle Engineering Research Center at the New Jersey Institute of Technology has analyzed the efficiency of B-to-B e-commerce and business-to-consumer (B-to-C) e-commerce. His research showed that if consumers use the Internet simply as a digital catalogue, there would be a detrimental impact on the environment.

"We're going to lose if we just buy and sell using the Internet," said Caudill. This effect is exacerbated if the product being purchased is sent via airfreight on "next-day" delivery, which,for a single package, is thirty times less energy-efficient that using regular mail, he added. "We need to tie it all together," he said. His research predicted measurable energy savings when B-to-B and B-to-C e-commerce are incorporated throughout the entire system.

E-Commerce and Land Use

The cities of Las Vegas and Orlando were non-existent before the interstates were built, said Levitt. Yet at the planning meetings for the interstates there was no mention of their environmental impact. "If you could go back to the senate hearings on the interstate in 1954 you'd have a lot to say about the environment," said Levitt. "I encourage you to be bold and do that for the Internet."

Despite the impact of land use on the environment, this is an area where the future is hardest to predict as e-commerce-driven changes in land use will happen more slowly an are harder to define. But Tom Horan, executive director of the Claremont Information and Technology Institute at Claremont Graduate University has a number of ideas. Horan studies how the mix of building and business types and commuting, shopping, and shipping patterns are altered by e-commerce and, thus, how they will impact land use.

"The e-commerce sphere is contributing to the reinvention of physical space for economic, social and cultural use," said Horan, with the changes occuring on a number of different scales. "On the micro scale, buildings will change in form as their function changes."

He gave as an example a large downtown bank changing into a more streamlined multi-service bank of today. On a larger scale, as high growth tech areas set up shop out of town, they contribute to urban sprawl; others are locating in inner city areas and impacting people's daily commute.

© 2007 Green Home, Inc.