While they are at the heart of the cloud revolution currently unleashing the potential of the internet, data centers are also notorious climate polluters. The sector has received immense scrutiny for years due to its resource-gobbling operations and significant concerns over the ecological impact it has on local communities.

However, a recent report by McKinsey suggests that data center operations, at least in on-premises applications, may be a smaller concern relative to the substantial emissions from enterprise technology.

According to the report, corporate devices flood the earth’s climate with about 400 megatons of carbon dioxide equivalent gases. Overall, enterprise tech emissions total roughly 1% of global greenhouse gas emissions – or, to put this in context, the equivalent of the United Kingdom’s total carbon emissions.

I think that with the increasing pressure on companies and large corporations for more substantial action on climate and sustainability issues, the McKinsey report could hardly have come at a worse time. Nevertheless, the data holds an advantage for companies willing to put in the work on climate issues. As McKinsey note, “progress on climate change requires action on many fronts, and enterprise technology offers an important option that CIOs and companies can act on quickly.” I’ll look a bit more closely at this data below and the implications it raises.

Corporate devices are nearly twice as polluting as data centers

End-user devices such as smartphones, laptops, printers, and tablets are the biggest culprit in enterprise tech emissions. Altogether, they emit between 1.5 and 2.0 times more carbon than data centers. There are a few reasons why this is the case.

First, corporate end-user devices are significantly more – and proliferate much quicker – than the servers in on-premises data centers. Employment booms, which have occurred often recently, typically cause device numbers to balloon, often on a one-to-one basis. Meanwhile, companies usually purchase servers and provision data centers based on forecasts of current and near-future use, and therefore need to upscale infrequently.

Second, end-user devices have a shorter refresh cycle than on-premises servers. For instance, smartphones typically get replaced in two years, while laptops and printers have refresh cycles of four and five years respectively. Meanwhile, servers get replaced every five years on average – and one in five companies wait even longer.

Third, and perhaps more importantly, emissions from corporate end-user devices are set to increase over the coming years at a CAGR of 12.8% yearly. This projected rise is driven by growing emissions from manufacturing, transportation, use, and disposal of these devices.

Consequently, taking action on enterprise end-user devices can be an effective way to quickly and sustainably slash corporate emissions. Some levers that companies may adopt include using energy-efficient devices, limiting the proliferation of these devices, exploring refurbished devices, and increasing product life span.

McKinsey also suggests that migrating from on-premises servers to “hyperscale” cloud-hosted computing may present one of the biggest emissions savings opportunities for companies. But can this provide the climate progress that companies need to establish their sustainability credentials?

The “carbonivorous” data center controversy

While the drive towards sustainability through “hyperscale” data centers may yet bear fruit, the data center controversy continues to receive significant attention. According to figures quoted in the MIT Press Reader, the cloud now has a greater climate footprint than the aviation industry. Starkly put, “a single data center can consume the equivalent electricity of 50,000 homes.”

And what is perhaps most frustrating is that the substantial portion of this energy use does not even go to active computational processes – those take up only 6-12% – but instead to redundancies stacked upon redundancies needed to guarantee the now minimum 99% uptime required by cloud users.

Hopefully, moving to hyperscale data centers will markedly reduce the resource requirements of cloud computing. But only time will tell whether that will be the case.

After a minor COVID-induced drop, global energy investments rebounded to pre-pandemic levels in 2021 ($1.9 trillion) – an increase of 10% over 2020 – reports the International Energy Association (IEA). And in what will be music to the ears of policymakers and green energy advocates, much of the investment attention shifted from traditional fuel production to power generation and end-use sectors, with electricity attracting the lion’s share of renewable energy funding.

Amidst the tumult and uncertainty of the global pandemic, a strong theme advocated by governments and international agencies was the opportunity the crisis provided to “build back better.”

Indications from 2021 energy investments suggest that has been the case, at least as it concerns renewables. Here, I briefly discuss the extent of those investments and how they augur for a move towards net-zero and green economy.

Performance of global investments in renewable energy

Following projections that global energy demand would increase by 4.6% in 2021, energy financing experienced a general uptick as interest in infrastructure, and new projects surged during the year. Noting the upward trend in financing mid-2021, the IEA proposed that “the anticipated upswing in investments in 2021 is a mixture of a cyclical response to recovery and a structural shift in capital flows towards cleaner technologies.”

The IEA reports that global power sector investment accounted for a large chunk of 2021 energy spending, increasing by 5% to over $820 billion in 2021. Most of that financing ($530 billion) was directed toward new power generation; renewables accounted for over 70% of this amount. Asides from this, investors also saw more bang for their buck, with a dollar spent on wind and solar photovoltaic installations producing four times more electricity than ten years ago.

“Electrification was also a major driver of investment spending by final consumers,” says the IEA. “Electric vehicle sales continue to surge along with a proliferation of new model offerings by automakers, supported by fuel economy targets and zero-emissions vehicle mandates.”

In the same vein, BloombergNEF reported in January 2022 that the previous year saw a 27% rise in low carbon energy investments, with nearly half emanating from renewables investment in Asia. As a result, total yearly spend on energy transition was $755 billion, a new record in sustainable energy spending.

However, I must say that despite the encouraging short-term news, global energy investment has yet to breach the levels required to forestall climate disaster. The IEA also agrees, noting that “clean energy investment would need to double in the 2020s to maintain temperatures well below a 2°C rise and more than triple in order to keep the door open for a 1.5°C stabilisation.”

The big question, though, is where will that money come from? Blended finance might provide an answer.

Blended finance in green energy projects

Blended finance, a type of public-private partnership, combines public concessional funding with private investment to de-risk certain project types. As the World Bank puts it, “blended finance, which combines concessional public funds with commercial funds, can be a powerful means to direct more commercial finance toward impactful investments that are unable to proceed on strictly commercial terms.”

Renewable energy projects are frequently “constrained by investors’ perception of high risk and low returns,” Consequently, the flow of private capital into these projects is often halting. However, concessional financing in the form of debt, equity, or grants, appropriate risk-mitigation measures, and suitable seniority in terms of loss protection and the security of returns can make these projects attractive to investors.

The World Bank reports that blended finance could be vital in attracting larger investments in clean energy, and sub-Saharan Africa provides a model for how these partnerships can work.

Climate change is an increasingly costly, and deadly, event in countries around the world.

As the World Meteorological Organization (WMO) reports, the past 50 years have seen some of the deadliest and most expensive disasters ever recorded. The period from 1970 to 2019 accounted for 50% of all climate-related disasters, 45% of reported deaths, and contributed 74% of economic loss ever suffered due to climate.

While the broad view of experts and regulatory agencies is that these weather and climate events are most likely to affect the most vulnerable, a term that would typically evoke images of at-risk people in emerging or developing economies, the spectrum of damage has also widened. People everywhere, from Russia to the US, Australia, China, India, and Chile, in urban and rural areas, are increasingly exposed to the debilitating economic and human costs of climate events.

While this reality underlines the global threat that worsening climate events pose, I believe it also indicates the global scale of cooperation needed to ameliorate the humanitarian, economic, and financial impact of these disasters on human populations.

The exorbitant cost of climate-related disasters

In the 1970s, available records pegged the financial cost of climate disaster at a daily average of $49 million. Those costs have exploded recently, and as of the 2010s, the daily economic expense of weather-related damage was a mammoth $383 million per day. Worse, three out of the ten costliest weather events on record occurred recently, all in a single year, and together they account for 35% of total economic disaster loss from 1970 to 2019.

The cost of climate change isn’t only financial though. The top ten deadliest weather hazards between 1970 and 2019 also account for well over a million deaths, according to the WMO. Droughts caused the most damage during the period, causing 650,000 deaths, followed closely by storms which led to 577,232 deaths.

While some part of these events’ deadly aspect can be attributed to their force and wide-ranging impact, they are even deadlier for the multiplier effects they produce on affected populations. For many, climate-related disasters often spell the loss of livelihood, shelter, sustenance, security, and any semblance of normal life. In the event of such disasters, the most affected find their lives suddenly and violently thrown off track, sometimes permanently. Often, only those in countries with established and extensive welfare systems are able to return to a normal life.

In my opinion, one of the harshest outcomes of climate disaster is its effect on the ability to procure a livelihood and sustenance. Climate operates quite visibly and devastatingly on food systems, and these events are significant threat factors for global food security. Addressing this topic in a report on the impact of disasters and crises on agriculture and food security, the Food and Agriculture Organization (FAO) notes that “the growing frequency and intensity of disasters, along with the systemic nature of risk, are jeopardizing our entire food system.”

Global action necessary to stall climate-driven trouble

As Qu Dongyu, Director-General of the FAO, notes, “we are living at a time that demands ambitious collective measures.” The world can only move the needle on climate-related goals and effectively tackle the growing menace of weather disaster with comprehensive and broad-based action from all sides.

Climate is a global problem, and in my opinion, it will take only global action to address this threat. Dongyu frames the task facing the world aptly when he says “the ability of governments, international organizations, civil society and the private sector to operate and cooperate in fragile and disaster-prone contexts is a defining feature for meeting global targets and achieving resilience and sustainability.”

The world must act collectively and decisively in unearthing, fine-tuning, implementing and scaling plans to cushion the effects of climate change. Trade, agriculture, and disaster-readiness are low-hanging fruits that can provide immediate results, as the World Bank asserts.

Ultimately, it is undeniable that climate disaster risk is a growing threat factor for the entire world, and mitigating this threat will require broad global cooperation to secure the lives and livelihood of at-risk populations.

The general view is that energy efficiency is good for the environment. After all, the less energy a device consumes, the better an outcome that provides for the environment.

Therefore, if devices consume less than they would have because of technological advancement, it seems logical to pursue and encourage those advancements that provide efficiency.

However, as I see it, the problem with this position is that while energy efficiency might help individual devices perform better and use less energy, that’s not necessarily good for the environment. If the goal is to eventually create a sustainable future that protects our natural environment, then energy efficiency does nothing for this in real terms.

Instead, energy efficiency only makes power easier to use and access since it is cheaper and more available, thereby increasing energy consumption in real terms. As a result, I argue in this article that while energy efficiency might provide nominal gains in energy usage, the eventual goal should be energy sustainability and sufficiency. And this should not merely be a shift to sustainable energy sources either, but a move towards less energy use overall, and I explain why here.

Why energy efficiency might amplify energy use

Take the example of LED lighting vs. incandescent lightbulbs. A single incandescent lightbulb consumes roughly 60 kilowatt-hours (kWh) of electricity every 1,000 hours. Compared to this, an LED lightbulb uses 70% less energy, meaning a consumption rate of roughly 18 kWh per 1,000 hours.

Millions of devices, appliances, and other energy-consuming products operate on this same premise: comparing the device’s energy usage now versus what it could have been. Considering this, the world should consequently see a net reduction in energy use since millions and millions of everyday devices and industries now prioritize energy efficiency.

However, since energy efficiency became a big deal in the 2000s, the world has not seen a net reduction in usage rates. Instead, energy use has ballooned – global energy consumption has increased by 1% to 2% almost every year for the past half-century (per 2019 figures). The only exceptions are 1980 and 2009.

Putting this information in graphic terms, the World Atlas of Light Pollution reports that 83% of the world’s population (and 99% of Europe and the US) live under a night sky that is 10% brighter than normal. And estimations are that the world’s energy demand will only increase by as much as 37% by 2040, according to the International Energy Agency.

Why is unbridled energy use wrong?

The basic answer is that energy resources are not infinite. On the contrary, they are limited, particularly in the case of fossil fuels, and will eventually run out.

But I’m sure this is no news. A significant part of the green energy drive is founded on the acceptance that the development of renewable energy sources is necessary to prevent (or at least prolong) the depletion of fossil fuels.

However, rampant energy use is still undesirable, even with limitless amounts of renewable sources to call on. I have written in the past about how the exploitation of resources for sustainable energy can be detrimental to the environment, society, and economies of the countries where these resources are sourced.

The experience in countries like Venezuela and the Congo, which are significant producers of cobalt – a primary resource in lithium-ion batteries, is a testament to the dangers of an unbridled pursuit for greater efficiency.

Perhaps rather than look to create more efficient electric vehicles, we should promote bicycles and the use of public buses. Also, maybe buildings should incorporate more natural lighting and ventilation rather than mega installations of HVACS and temperature control systems.

The UAE’s recently launched rail and transport project concretizes the country’s commitment to drastically reducing carbon emissions within its borders.

As scientists warn, global warming poses an existential threat to humanity, and the UAE is doing its part to avert this dire prophecy. As one of the world’s largest oil and gas exporters, the UAE is also amongst the world’s top carbon emitters.

However, the country has set itself a “very ambitious” goal to reach net-zero emissions by 2050, announced in October 2021, thereby becoming the first Gulf state to make a green public commitment of such magnitude. According to Aljazeera, this came on the heels of an earlier $165 billion clean energy investment pledge by Dubai ruler Sheikh Mohammed bin Rashid Al Maktoum.

With the rail and transport project, the UAE is forging ahead on its climate goals, and I believe this might provide the push that helps other Gulf petrostates firm up on their green resolve.

The UAE Railways Program

The rail and transport project christened the “UAE Railways Program,” was announced in December 2021. The program provides an integrated system for the country’s railway sector, blending freight and passenger carriage that is planned to span all eleven UAE emirates.

Crown Prince of Abu Dhabi, Sheik Mohamed bin Zayed Al Nahyan, announced the program at the Dubai EXPO 2020 as part of the “Projects of the 50”, a series of economic and industrial projects aimed to accelerate development in the UAE.

The program’s central theme is national integration and sustainability, as captured by the Crown Prince in his speech. “The National Railways Program reflects the true meaning of integration into our national economic system,” says Sheik Mohamed bin Zayed Al Nahyan, “… it comes to support a national vision to connect the country’s key centers of industry and production, open new trade routes and facilitate population movement….”

Likewise, Sheik Mohammed bin Rashid Al Maktoum noted that “the project comes in line with the environmental policy of the UAE and it will reduce carbon emissions by 70-80%.”

I should note that, while the UAE Railways Program was only recently announced, it forms part of ongoing transport initiatives that the UAE launched earlier in 2016. The program includes three strategic projects:

• The Freight Rail, which includes Etihad Rail Freight Services (completed in 2016);
• The Rail Passenger Service, which is end-user focused and aims to connect eleven UAE emirates running at speeds of 200 km/h; and
• The Integrated Transport Service, which includes an innovation center focused on developing and integrating intelligent transportation solutions

The program also includes developing and deploying software applications to support planning, bookings, and integrated logistics solutions.

Economic and environmental impact of the program

The rail and transport project is expected to contribute immensely to climate progress in the UAE. Current estimates suggest that the country could cut up to 80% of emissions within 50 years. However, it’s not clear how the rail and transport project will achieve such wholesale emissions reductions by itself or if the reductions touted are only expected within the transportation sector.

Nevertheless, I expect that eliminating millions of truck, vehicle, and train trips should make a dent in the country’s total emissions. For example, the UAE projects that roughly 36.5 million passengers should ply the railway by 2030. Similarly, the Etihad Rail service is reported to have already transported over 30 million tons of granulated Sulphur (saving approximately 2.8 million truck trips).

One point that citizens will praise is the internal focus of the investments underlying the program. For example, the railway program will gulp around AED50 billion, 70% of which is targeted at the local economy. Likewise, the program is projected to create approximately AED200 billion in economic opportunities and thousands of jobs.

Rapid industrialization and economic development have made China one of the world’s most influential and prosperous countries. The country’s meteoric rise in just under three decades is nothing short of amazing. However, the same factories and industrial centers that fueled Chinese economic growth also threaten its natural resources and create health problems for its citizens.

To the government’s credit, rather than deny the threat of climate change or double down on ineffective rhetoric, they made a concrete commitment to a green future and set out actionable policies to achieve this.

Today, China has made giant strides in its dedication to reducing pollution and, in my opinion, is also staking a credible claim as a global climate leader. As the Center for Strategic International Studies (CSIS) reports, while the country is currently the world’s largest emitter of greenhouse gases, it is also a powerhouse in renewable energy and is leading the race towards a sustainable future.

How did things change, and what did China do to reach this point?

China’s green track record

When China started its drive towards economic prosperity in 1978, it was fueled primarily by coal. However, with the country taking over as the world’s largest climate offender in 2006 and spurred by studies establishing pollution as a cause of one million Chinese deaths yearly, the government has made sustainability a core policy goal, and this commitment is paying off.

China currently leads the world in the production of renewable energy sources. The country is the largest producer of wind and solar energy worldwide. Likewise, it is the largest foreign and domestic renewable energy investor and is one of the foremost manufacturers of green tech globally. In 2019, the country held the most world-class patents in water, waste treatment, and recycling. Likewise, Chinese environment-related patents have ballooned by 60x since 1990, compared to just 3x in the OECD area.

With the government’s move away from coal, the World Economic Forum reports that “huge progress has been made on air quality, and there are now fewer smog days in China’s largest cities.”

How did the country get here?

As I see it, China has achieved its current sustainability status due to concrete and measurable planning towards climate goals. The country has made the drive to a green future a part of its government planning since 2001. Since then, each of the country’s five-year plans (FYPs) has included revised and steadily improving objectives for reduced pollution and greater climate action.

Further, as the Mercator Institute for China Studies reports, the country progressed under its 13th FYP (2016-2020), with virtually sixteen out of sixteen green targets met, thereby laying a foundation for more significant action in the 14th FYP.

The government has backed its climate commitments with funding too. In July 2020, the country set up an ecological environment fund that raised 88 billion Chinese yuan (CNY) as of January 2021. The fund is on track to become the second-largest national fund in the country.

Apart from this, China is using various strategies to procure its climate change objectives. This includes designating special green development zones such as Shenzen, Guilin, and Taiyuan. These cities focus on specific sustainability goals such as sewage treatment and waste utilization, desertification, and air and water pollution.

Private companies are also participating vigorously in the green drive. For instance, Alibaba helped create a Green Digital Finance Alliance, pulling other private corporations into the sustainability race, and launched an app (Ant Forest) to gamify carbon tracking. The app is already reported to have helped save 150,000 tons of CO2 as of February 2017.

There’s still work ahead

While the Chinese progress has been impressive, it’s important to clarify that the country can still do more. For instance, the Chinese share of renewable energy in overall power generation is still 12.7% (as of January 2021), compared to 14% in the EU. Also, while the country continued to implement many green targets in 2020, China added nearly 20 gigawatts of coal capacity in the first half of the year and approved another 48 gigawatts of additional power from new coal-fired plants.

However, as I see it, the Chinese progress on climate looks likely to bear positive fruits for the overall transition to clean energy. Western nations will be hard-pressed to emulate the Chinese to compete in green tech and allied advancements and show that the West is just as invested as the East in the move to arrest harmful climate change.

I have closely followed the recent upsurge in energy costs that characterized the end of 2021. According to global reports, coal, gas, and electricity prices rose to decade-high levels in the final months of the year, and projections were that the energy shortfall would continue well into 2022.

The International Energy Association reports that gas prices are at a record, with costs as of 3rd quarter 2021 at ten times the price a year ago.

In addition, coal prices increased 5x compared to 2020 prices, and natural gas prices tripled in October 2021 to their highest levels since 2008.

Many factors have been fingered as culprits for the energy squeeze, but one that seems to be thrown in now and then is the effect of reduced investment in fossil fuels and capital transfer to fledgling green energy projects.

Right off the bat, I would like to emphasize that investment in green energy is not the cause of the energy crisis. Moreover, as both the International Monetary Fund and the IEA clarify, blaming the clean energy transition for the situation is “inaccurate and misleading.”

Instead, there are various factors involved, not least of which are the 2014 and 2020 commodity price collapses and the resurgence of energy demand after a COVID-induced hiatus. I will briefly outline some of these causes and how we can expect things to evolve.

Why are energy prices so high?

While it seems like the energy crisis hit out of nowhere, there are longstanding reasons for the situation, and they mainly stem from the collapse of oil prices in 2014.

At the start of the 2010s, strong growth in the price of commodities created an oil industry boom, with prices sitting around $100 per barrel. The boom encouraged greater investment in the sector, significantly increasing supply. Similarly, developments in energy efficiency reduced worldwide demand, thereby creating an oil glut. However, major oil-selling countries failed to respond by lowering supply, and as a result, oil prices fell by 70% from 2014 to 2016.

One implication of this collapse was that investors lost appetite for new fossil fuel investment. Second, abundant oil also created a natural gas glut, making gas cheaper and a viable alternative for coal. Due to this, gas-fired plants gained ground, and the electricity systems worldwide began to rely more on gas instead of coal.

By the time COVID came around, the pause in fossil fuel investments was already several years old, and as Bloomberg reports, supply was already falling behind demand. COVID-19 tanked energy production globally due to lockdowns, the rampaging pandemic, and health regulations. While demand rebounded faster and stronger than expected, supply quickly fell further behind due to unexpected outages, a sizable maintenance backlog, and supply chain inefficiencies. Households and power plants began to compete for limited gas supply, which helped increase prices even more.

Currently, OPEC and Russia seem unwilling to intervene and help stabilize prices with increased supply. At the same time, the EU and other countries in the Northern Hemisphere have all but depleted their reserves in response to unseasonal weather, thereby leaving them unable to ease the supply hardships within their territories.

That said, I should note that climate policy is not exactly blameless in the overall operation of forces leading to this crisis. For example, increasingly stringent emissions targets in Europe, North America, and China have contributed to policies favoring gas (which is cleaner) over coal. But in the general scheme of things, climate policy has had a negligible effect on the crisis.

What will the new year bring?

The causes behind the current energy crisis are myriad, so it’s uncertain how things will develop within 2022. While major oil producers will likely open up their stores and help provide stability at some point during the year, other factors such as maintenance difficulties and destructive weather events are less certain.

I believe one potential solution could be to increase investment in renewable energy sources to help make the global system less vulnerable to wild swings in commodity prices. With decentralized energy production and renewable sources enjoying more production capacity, the world can recover from these commodity cycles quicker and suffer less damage as a result.