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Mobile broadband supports CO2 emission reduction per capita from a macro perspective

New research explores the relationship between mobile broadband and CO2-emissions per capita and finds that CO2-emissions per capita is significantly reduced as mobile broadband penetration increases based on country data.

Master Researcher, Macroeconomics

Research Lead, Financial system benchmarking @ World Benchmarking Alliance

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Mobile broadband reduces CO2 emissions per capita

Master Researcher, Macroeconomics

Research Lead, Financial system benchmarking @ World Benchmarking Alliance

Master Researcher, Macroeconomics

Contributor (+1)

Research Lead, Financial system benchmarking @ World Benchmarking Alliance

During the last century, CO2-emissions in the world have increased substantially, see figure 1. The UN Intergovernmental Panel on Climate Change (IPCC) has concluded that CO2-emissions are responsible for much of the increased greenhouse effect that heats the earth. To avoid the most severe effects of global warming, global CO2-emissions must be radically reduced. In this situation the role of information and communication technology (ICT) in mitigating climate change is increasingly gaining attention.

Figure 1: Annual production-based CO2-emissions in the world 1750–2021 (million tonnes per year) Source: Based on data from Our World in Data

In 2024, it appears almost impossible to imagine a world without smartphones. Thus, mobile broadband arguably is one of the most important innovations of the early 21st century. Mobile broadband has spread rapidly in most countries of the world and has had an important effect on how we lead our lives, see figure 2. As part of a recent research project published in peer-reviewed journal Telecommunications Policy, supported by Ericsson, Pernilla Bergmark and I investigated the impact from mobile broadband on CO2-emissions from a macro perspective.

Figure 2: Total global mobile and mobile broadband capable connections (in millions) 2001–2022 Source: GSMA

Note: Mobile broadband connections are defined as SIM cards that have been registered on the mobile network in a device capable of download speeds of 256 kb/s or greater.

The study is based on 181 countries for the period 2002–2020. The results indicate an initial increase in CO2-emissions per capita for a country at an average emission level once mobile broadband is introduced. Possible explanations might be initial investment in network infrastructure and increased consumption of electricity. However, on average for the period 2002–2020, the continuous relationship between mobile broadband and CO2-emissions per capita is significantly negative in a statistical sense. Meaning that emissions per capita at a country level significantly reduce as mobile broadband penetration increase.

Based on a two-stage model, we conclude that on average a 10 percentage points increase in relative mobile broadband penetration causes a 7 percent reduction of CO2-emissions per capita.. Based on the model described in our reserach, we conclude that investments in mobile infrastructure over longer periods of time can contribute to reducing a country’s CO2-emissions, However, the relationship is only significant for high-income countries (i.e. countries with a GNI of $4096 or above).

How does ICT affect CO2-emissions?

ICT can have both positive and negative climate effects. In the paper we refer to three orders of effects and study the combined effect of all:

  • The first order effects are associated with and defined as the impacts of the lifecycle of ICT hardware and software.
    The first order effect was estimated to be 1.4 percent of total global CO2 equivalents in 2020. This is also the level referred to by the ITU as a starting point of their decarbonization trajectory for the ICT sector.
  • The second order effects are the potential for ICT to induce lower or higher emissions by other sectors when used.
    For example, ICT supports more efficient use of energy, better industrial processes and reduced demand for transportation through teleconferencing, smart transport and better logistics.
    This implies that ICT may drive decarbonization and dematerialization resulting in less resources being used and thus resulting in lower CO2-emissions. Decarbonization denotes a reduction of CO2-emissions through the use of low carbon power sources. Similarly, dematerialization refers to the absolute or relative reduction in the quantity of materials used in an economy, thus it implies doing more with less material inputs. However, digital technologies can also be used for purposes that lead to higher emissions which is why a macro-level study like ours is interesting since it is not limited to only specific use cases.
  • There are also other effects such as behavioral changes and systemic effects at a societal level, including rebound, which could also reduce or increase overall emissions.
    Rebound effects are the changes in demand that is the result of productivity gains. Rebound effects may have both positive and negative impacts on CO2.
    For example, if increased productivity leads to lower prices of consumer electronics, the savings may be used for other consumption and there might be an increase in demand for other goods, such as gasoline cars: leading to higher CO2-emissions. However, rebound effects might also foster increased demand for low-carbon alternatives such as electric cars, which might lead to decreased CO2-emissions as more people shift to an electric car.

Thus, rebound effects may be driving alternatives with lower emissions when they have a smaller footprint or resource consumption than the original activities.

ICT from a macro level perspective

Most studies focus on just one of the above three effects. Therefore, although ICT is believed to have a great potential in reducing CO2-emissions, there is so far not much evidence regarding its aggregated impact at the macro level. Hence, our paper investigates the relationship between mobile broadband and CO2-emissions per capita at the macrolevel to complement studies focusing on specific orders of effect. The approach applied could only be used to study the aggregated effect of using ICT, hence it cannot distinguish between first order effects, second order effects and other effects. First, it estimates the effect from the introduction of mobile broadband based on a difference-in-difference specification. This does not control solely for first order effects, as effects of different orders cannot be distinguished in this study. Second, it estimates a continuous relationship over time which includes both first, second and other effects.

Main results

Our results indicate an initial increase in CO2-emissions per capita for a country at an average emission level once mobile broadband is introduced. The results imply that after a country has introduced mobile broadband (i.e. penetration is higher than 1 percent), CO2 levels per capita are on average approximately 5 percent higher than before its introduction. This increase is most likely driven by first order effects from the technology’s increased use of material and energy. A possible explanation might be that initial investment in network infrastructure and associated consumption of electricity is shared by a limited number of users initially.

As mobile broadband diffuses over time the continuous relationship between mobile broadband and CO2-emissions per capita is significantly negative in a statistical sense. To explain, it means that emissions at a country level significantly decrease as mobile broadband penetration increases. As pointed out above, it is not possible from a top-down perspective to distinguish exactly which ICT related activities that are driving this development. Nevertheless, possible explanations might be more efficient use of energy, better industrial processes, and reduced demand for transportations through teleconferencing, smart transport, and better logistics. One example of better industrial processes is the Ericsson 5G smart factory in Lewisville, Texas. When compared to a similar site without the same level of automation, the 5G automated factory with connected robots has delivered 120 percent improved labor productivity, 65 percent reduction in manual material handling.

We conclude that on average, a 10 percentage points increase in mobile broadband penetration causes a 7 percent reduction of CO2-emissions per capita. The conclusion is based on a two-stage model (assuming that the diffusion of mobile broadband is based on a logistic form of S-shaped diffusion curve, it is possible to model the maximum penetration rate of mobile broadband as a linear function of penetration of mobile phones and fixed Internet subscriptions per 100 inhabitants in 2002 (before mobile broadband was introduced) in a first stage regression. The fitted values from the S-shaped diffusion curve in each country can be used to estimate the causal effect from mobile broadband in a second stage regression) and controlling for a long list of additional independent variables: GDP per capita, population density, share of electricity consumption coming from fossil fuel, industry as a share of GDP, a regulation index, fixed broadband, working age as a share of population, and a human capital index. Moreover, although our study used the quite technical metric of relative broadband penetration in relation to total mobile connections, results are robust when investigating mobile broadband connections per 100 inhabitants.However, the relationship is only significant for high-income countries. One possible explanation could be that the speed in the mobile broadband networks generally is higher in high-income countries. Due to data limitations, we are not able to control for the different quality aspects of mobile broadband in our regression analysis. High-income countries might also have an industrial setup that allows them to benefit more from any CO2-emissions reduction opportunity associated with mobile broadband.

Lessons for the future

The results in our paper clearly support the finding that the initial first effects from mobile broadband is driving increments in CO2-emissions per capita. However, the direction of the second and higher order effects from mobile broadband over time, as well as sharing first order impacts between more users, appear to have a reducing effect on CO2-emissions per capita. Thus, the results imply that investments in mobile infrastructure over longer periods of time are important tools in mitigating climate change. Based on the results, policy makers in high-income countries may use mobile broadband as an integrated part of their decarbonization efforts. When doing so, they need to consider how to best optimize the aggregated impact of first, second and other effects and seek to amplify any positive usages and suppress rebound and usages that maintain or increase emissions.

As the results also indicate a reducing effect from fixed broadband on CO2-emissions, policy makers should, as far as possible, facilitate investments in both mobile and fixed broadband equipment without distorting market competition. In contrast, policy makers in low-income countries need to establish further understanding of how their mobile broadband strategies should be defined to have a similar effect as in high-income countries. Thus, future research should investigate how the use of mobile broadband differs between low-income countries and high-income countries, and how such as digital literacy, affordability and digitalization of industries and administration comes into play.

Finally, an additional area for future research is to understand how the speed of different networks affects CO2-emissions. Mobile broadband connections are defined by the GSMA as SIM cards that have been registered on the mobile network in a device capable of download speeds of 256 kb/s or greater. When mobile broadband was introduced in 2001, this was considered a quite high speed, but as the mobile technology has improved many countries have a considerably higher download speeds than 256 kb/s. Due to data limitations, we are not able to control for the different quality aspects of mobile broadband in our regression analysis. Additional analysis of the effect of speed would be needed in the future because many emerging technology applications, not least in industrial and infrastructure applications, would need the higher speeds associated with more advanced networks.

Climate change affects everything from geopolitics to life expectancy to migration. One of the crucial questions for the decades to come will be how to reduce CO2-emissions and still maintain a high quality of life. In our paper, we have shown that mobile broadband is crucial for this development. It is however important to remember that the result is based on equal weights for all 181 countries included. Thus, for the total reduction in CO2-emissions, large countries like the US and China will have a considerably larger impact compared to smaller countries. Nevertheless, there are many opportunities for ICT to increase efficiencies of processes and thereby reducing CO2-emissions. However, even though CO2-emissions per capita is reduced considerably the total emissions might still increase due to population growth. Thus, it is my belief that a combination of new technologies and a stabilized world population as fast as possible are necessary to bring down the CO2-emissions to a sustainable level.

Read more

Research paper: How is mobile broadband intensity affecting CO2 emissions? – A macro analysis - ScienceDirect

Ericsson Smart 5G factory: WEF names Ericsson US 5G factory an Industry 4.0 pioneer

The potential for ICT to reduce CO2 emissions by 2030

Connectivity and climate change: Connectivity and climate change - Ericsson

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