The digitalisation, dematerialisation and decarbonisation of the global economy in historical perspective: the relationship between energy and information since 1850

Fouquet, Roger (2024) The digitalisation, dematerialisation and decarbonisation of the global economy in historical perspective: the relationship between energy and information since 1850. Environmental Research Letters, 19 (1). ISSN 1748-9326

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Abstract

To better understand the processes of digitalisation, dematerialisation and decarbonisation, this paper examines the relationship between energy and information for the global economy since 1850. It presents the long run trends in energy intensity and communication intensity, as a proxy for total information intensity. The evidence suggests that, relative to GDP, global economic production has been reducing energy and increasing information use since 1913. The analysis indicates that it initially required little information to replace energy in production and that the ability to substitute away from energy and towards information has been declining. The result implies that the global economy is now reducing energy and increasing information at a substitution rate of 0.2 kB per kWh of conserved energy or 0.8 GB per tonne of carbon dioxide mitigated. As the price ratio of energy to information is currently higher than this marginal rate of substitution, there are incentives to further substitute information for energy. However, one conclusion is that (without the long run escalation of carbon prices) substitution away from energy and towards information is likely to cease within the next few decades and, beyond that, digitalisation will play a declining role in the decarbonisation process.

Item Type:	Article
Official URL:	https://iopscience.iop.org/journal/1748-9326
Additional Information:	© 2023 The Author
Divisions:	Grantham Research Institute
Subjects:	H Social Sciences > HB Economic Theory G Geography. Anthropology. Recreation > GE Environmental Sciences
JEL classification:	Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q50 - General Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q4 - Energy > Q40 - General D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D83 - Search; Learning; Information and Knowledge; Communication; Belief
Date Deposited:	15 Dec 2023 10:27
Last Modified:	25 Apr 2024 23:45
URI:	http://eprints.lse.ac.uk/id/eprint/121063

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