The potential of ICTs to combat climate change and improve environmental performance


Welcome and opening address by Angel Gurría, OECD Secretary-General, at the
High-Level Conference on ICTs


27-28 May 2009, Denmark
Ladies and Gentlemen,

Imagine a cell phone that could tap the ambient heat radiating from a human hand to charge itself -- or a web page that tells you how much energy your home is using in real time and suggests ways to reduce this energy use and save money. 


Researchers already are tinkering with such concepts in labs from Silicon Valley to Tokyo.  Green technologies will transform our society but we are just at the beginning. 


Our Internet economy holds promising solutions to even the biggest environmental challenges.
When the Danish government set about planning this conference, they were eager to catapult information and communications technologies -- ICTs for short -- into the mainstream global debate on climate change. Information technologies can help deliver innovative environmental solutions.  But until now, it has been a struggle to turn the concept into bold policies.


Then came the crisis.  As the global economy suffers its most severe contraction in 70 years, energy gluttons are among the hardest hit.  Automakers cannot power us out of this recession with fuel-inefficient cars designed for yesterday’s markets.   Many traditional sectors face wrenching change as they struggle to adapt to a low-carbon economy.  The lesson is clear:  We must foster cleaner industries to power growth in the 21st century.


In the coming months, OECD’s work will continue to build on the Strategic Response to the global crisis, which we launched in the end of 2008. And critical policy areas will be green recovery and innovation policies. These are actually two important policy issues we will be focussing on at this year’s Council Meeting at Ministerial Level (MCM), scheduled to take place in Paris on the 24-25 June. Our aim is to use the OECD’s unique analytical and policy advice capacities to produce timely and valuable insights for participating countries to address policy challenges.


That’s why this conference is so timely.  As governments strive to repair and rebuild, many are committing billions in stimulus funds to clean technologies.  The bet is that public and private investment in green solutions, will produce a triple win:  Innovative technologies to tackle global warming, new industries to drive long-term economic growth, and jobs to help kickstart recovery.


Thanks to you Minister Sander and the Danish government for hosting this important conference, which can help speed the implementation of solutions.  In the run-up to the United Nations meeting on climate change in December this gathering will spotlight the digital technologies that can help us combat global warming and help build momentum for international action.


What role can ICTs play in delivering green solutions?  A powerful one.  Chips, computers, software and high-speed networks are the tools to help us build a low-carbon economy. They have been driving huge productivity gains for decades.  The crisis is an opportunity to tap them further to lower energy use and reduce greenhouse gases across the entire spectrum of industry. The Internet and the technologies that underpin it are a powerful force for change. 


A recent report by The Climate Group estimates the use of information technologies in smart buildings, smart electricity grids, smart transport and logistics – among other industrial uses -- can help slash annual global greenhouse gas emissions 15 percent by 2020.  That’s a dramatic gain – nearly equal to the annual emissions of either the United States or China.


Yes - digital technologies consume energy.  The International Energy Agency forecasts that the growing use of residential ICTs and consumer electronics goods will triple electricity consumption by 2030 if no action is taken to improve their efficiency.  Importantly, it also concludes that adoption of the most efficient technologies would slash electricity consumption by more than half, holding the increase to 1 percent a year through 2030 – despite the rising use of electronic goods.  This level of energy savings would save 260 gigawatts in additional power demand – more than the current electrical generating capacity of Japan.
Many initiatives to reduce the carbon footprint of the ICT sector already are underway. Japan’s $32 million Green IT Project promotes highly energy efficient ICTs in three areas.  It aims to reduce energy consumption of network components and data centres by more than 30%.  And Japan is experimenting with organic light-emitting diodes to cut the power consumption of displays by 50%.


We can do far more.  Infuse green ICTs across industry and you can save up to ten times more energy than they use.  The biggest gains are in power generation and distribution, buildings and transportation – three areas which contribute to the bulk of greenhouse gases. 


ICTs are also essential building blocks for carbon pricing systems.  Technology can offer cost-effective market-driven solutions, using sensors, software and networks.  The next step is to design systems to reliably measure, track and reduce greenhouse gas emissions. 


You will get an earful over the next two days from many experts about how ICTs can help green our planet. I see two areas where our digital toolkit can be particularly effective battling climate change. 


Transportation and logistics.  Many industries already rely on software systems to optimize transportation systems to reap big energy savings.  Kraft Foods, for example, introduced a “smart transportation” and logistics management system in 2007 to better plan its delivery and supply chain routes.  The program took 1,500 trucks off the road and cut one million miles in unnecessary driving – eliminating 3.3 million pounds of greenhouse gas emissions.


And industries are getting more creative with ICTs every day.  The forestry industry in northern Europe is using information technology to eliminate the 10 percent of timber it wastes each year by better matching customers with the right size logs.  That is the equivalent of a forest the size of Luxembourg.    

Digital technology gives us the ability to monitor the environment and reduce energy use in real time.   How?  High-speed broadband networks -- the backbone of our Internet economy -- enable a continual two-way flow of information between customers and utilities.  


Connect smart energy meters to the network and remote adjustment systems will put energy-hungry buildings on a crash diet. The impact could be huge.  Buildings account for 40 percent of energy use in the EU.  The Commission estimates that effective energy policy and technology could reduce a building’s carbon footprint by 17%. 


A smart electricity grid would allow consumers to store electricity in smart appliances, like the battery of an electric car, when prices are low.  That would conserve energy that today goes wasted as surplus.  The smart grid will also let millions of consumers inject electricity back into the grid.  This intelligent, two-way exchange will help governments get the price right on energy use, allowing smarter choices and driving down waste.  The potential for savings from smart grids is even more dramatic in developing countries, where electricity generation is highly inefficient.


Smart grids have another big advantage:  They allow renewable energies to feed into national power systems.  Both practices help manage peak demand and reduce the need for extra power plants. 
How do we transform this promising potential into reality?  Governments need to take the lead now.   We can’t afford to experiment and hope that these markets develop on their own.  We should start by putting in place policies that provide a clear price signal to trigger innovation in energy efficiency. 


To complement price signals and speed the benefits, we need policies to support the development of the “green” infrastructure.  That means funding research, stimulating demand for new technologies, levelling the playing fields that favour polluting technologies, investing in green government buildings and encouraging consumers and industry to embrace a low-carbon economic model. 


The US and Korea have taken bold initiatives.  Korea is promoting an “intelligent” transport system as part of its $36 billion euro green stimulus package.  The US American Recovery and Reinvestment Act provides $59 billion for green technologies, including $11 billion for a smart electricity grid. 


Supporting demand for green technologies is only one step.  Most policies aimed at wielding ICTs to cut energy consumption lack well defined implementation strategies.  OECD research shows the bulk of government initiatives focus on making information technologies themselves greener.  Only one tenth of the projects surveyed focused solely on using ICTs broadly as an enabler to green the economy.


Governments also need to focus on better measurement and evaluation.  Most programs that tap ICTs to tackle global warming do not yet have clear targets.  Evaluation of these initiatives is even rarer.  One exception is the United Kingdom, which has devised an evaluation program for its Green ICT Strategy, called the “Green ICT Scoreboard.”    


To unlock energy savings and growth, policy makers must put a good regulatory framework in place, ensuring that “smart” grids, smart urban systems and smart transport systems adhere to a framework open to competition. That will help stimulate a level playing field, expand markets and provide a springboard for innovative and entrepreneurial activities. 


OECD work on barriers to the uptake of ICT-powered green technologies can help.  Identifying best practices and OECD recommendations to deploy ICTs for environment gain, for example, can drive the uptake of green technologies.   We also need to boost education and training around the skill sets for green jobs.


Finally, international collaboration on large-scale clean technology projects is important for speeding the global benefits and achieving large-scale impact.

Ladies and Gentleman -- the policy challenge of our era is to forge an economic model for the 21st century that will provide for future generations.  We are now poised to transform years of rhetoric into action.  The hard part lies ahead, because it involves changing the way we work and live. But the Internet and the technologies that underpin it already are transforming our world.  The key is to fully harness our Internet Economy to green our homes, our industries and our governments.  This conference is about accelerating change.  Let’s not spare any energy over the next two days in setting the stage for a highly successful climate change conference in December.


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