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Drivers and Effects of Digitalisation on Energy Demand in Low Carbon Scenarios

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Bergman, Noam, and Timothy J. Foxon. 2021. “Drivers and Effects of Digitalisation on Energy Demand in Low Carbon Scenarios.” SSRN Scholarly Paper. Rochester, NY: Social Science Research Network (SSRN).

The world is currently facing two socio-technical transitions: shifting to a low-carbon society, and a digital revolution. Despite some claims to the contrary, evidence suggests that spread and adoption of ICT does not automatically lead to reduction in energy demand, if this stimulates new energy-using practices or wider economic growth. Despite this policy challenge, the two transitions are often considered separately. This study examines potential drivers of reductions or increases in energy demand due to digitalisation identified in recent leading global and UK net zero transitions scenarios. These include direct effects, indirect and rebound effects relating to home energy use and transport, and effects on economic growth. The scenarios are first analysed in relation to how they are situated in relation to different framing assumptions: (1) the relative focus on decarbonising energy supply or managing energy demand; (2) a focus on green growth or shifting to a focus on wellbeing (or even degrowth); (3) the extent to which they assume dominant business models led by large ICT firms, or alternative business models which empower communities and users; and (4) the extent to which they envisage key roles for ICT in relation to automation for optimising energy supply and demand or for empowering agency of users. Specific direct, indirect and economic growth effects of digitalisation on energy demand are then identified, which reflect these and other projections in the scenarios. These imply that the future pathways adopted for digitalisation will have a significant impact on future energy demand and hence on the feasibility and acceptability of achieving net zero goals. This suggests opportunities for further research and improving policy interactions between these two transitions, and stimulating greater public debate on the different framings for an ICT-driven low carbon transition.

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