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4.4.4.2 Conceptual underpinnings

Digital technologies have the potential to play two distinct positive roles in the context of the climate and sustainability transitions: they can act as enablers and multipliers of change. Digital technologies are enablers of change because they underpin the development of the next generation of large-scale, distributed, coordinated, renewable and smart systems by providing sophisticated techniques for controlling, monitoring, managing, optimising and balancing electricity supply and demand (see for instance IEA, 2017; Kangas et al., 2021; Giotitsas et al., 2022). They also contribute to energy efficiency, support energy demand management, promote platform-based sharing economies, and, in a more general sense, enable virtualisation and servitisation, with associated reductions in material inputs (Grubler et al.,2018; Royal Society, 2020, GESI, 2022).

In addition, digital technologies act as multipliers of change because they can unlock and promote broader economic and social benefits alongside-energy efficiency gains (Xu et al., 2022). These are often referred to as co-benefits of the energy transition. For instance, digital technologies increase the ability to access products and services, they increase competitiveness and go hand in hand with the up-skilling of the labour force, and the improvement of the quality of jobs. Xu et al., (2022), for instance, find human capital accumulation (measured in terms of educational attainment) as one of the mechanisms by which digitalisation helps reduce energy demand. Digital technologies also enable transformative agency through increased and improved coordination and the creation of digital spaces for action and interaction (Heimans and Timms, 2019). Given their pervasive and disruptive nature, digital technologies have the potential to be used as strategic interventions or leverage points to enable positive tipping in all sectors as well as super-leverage points capable of catalysing tipping cascades across multiple sectors and promote the creation of inclusive economies and societies characterised by high wellbeing.

In this context, ensuring democratic access to knowledge systems and digital technologies, distributing rents from these knowledge systems fairly, and establishing a governance framework within which digital technologies can contribute to the public good, are strategic interventions to ensure that digitalisation can play its roles of enabler and multiplier of change and that its potential as a leverage point promoting domain-specific PTPs can unfold (Box 4.4.2).

Box
4.4.2

Potential risks of digital technologies for sustainable change

While digitalisation can enable positive sustainable change, an increasingly rich literature illustrates how digital technologies can also create significant risks for it (Creutzig et al., 2022, Verdolini, 2023). First, they themselves are energy-intensive and may contribute to increasing energy demand (Freitag et al., 2022). Indeed, the evidence on the energy efficiency (and low demand) potential resulting from digitalisation presents mixed results. Some studies, e.g. Li et al., 2023, show an inverse linear relationship as a function of income (GDP): lower-income countries benefit more in terms of improved energy intensity or reduced energy demand because digitalisation helps avoid or leapfrog existing inefficiencies.

Conversely, other studies (e.g. Xu et al., 2022) show a U-shape relationship describing how lower and higher-income countries benefit more in terms of efficiency gains, while middle-income countries benefit less. In the latter, scale effects appear to outweigh efficiency gains. Second, they require an increasingly diverse set of material resources (such as rare earth elements) which are sometimes/often sourced from developing countries through unfair labour practices and which later turn into large piles of digital waste. Third, they can be used to increase social and behavioural control and to promote new consumption practices which put further strain on the Earth’s resources. Fourth, their wider societal co-benefits do not necessarily accrue equally across countries, regions and sectors: they often are concentrated within the wealthiest individuals in the wealthiest economies.

The costs associated with digital technologies in terms of materials and digital waste weigh more on poorer countries (Creutzig et al., 2022). Digitalisation, and in particular AI, is accelerating the spread of misinformation and leads to further concentration of (economic) power by monopolising information and knowledge systems (Galaz et al., 2023). Misinformation and the concentration of power create conditions in which mistrust of dominant actors spreads to governance institutions more broadly. This set of factors, in turn, may erode support for stringent climate policies whose effective. Inequality, too, hinders action for sustainability (2.3).

Figure: 4.4.8 — **Figure 4.4.8:** Illustrative representation of digitalisation impacts on resource use (left panel) and on governance institutions (right panel).

We present next illustrative examples of the transformative potential of digital technologies as enablers of PTPs on the basis of the avoid, shift, improve framework (Creutzig et al., 2022) in relation to teleworking, MaaS and smart homes.

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4.4.4.2 Conceptual underpinnings

Potential risks of digital technologies for sustainable change

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