In this latest contemplation from our emerging risks analysis I've asked my colleague Rolands Sadauskis to share his thoughts on the 'twin transition' - the simultaneous push towards green and digital futures. Here are his fascinating reflections:
Whilst these transformations are portrayed as complementary solutions to our environmental crisis, they conceal a profound paradox. Consider this: we're attempting to solve a crisis born out of resource exploitation by... intensifying resource extraction. The green transition demands considerable quantities of critical minerals - lithium, cobalt, rare earth elements - for renewable technologies. Even the much-discussed hydrogen economy, whilst promising clean energy, would bring resource challenges - notably the vast quantities of water for hydrogen production, competing with agricultural and domestic needs. The digital transformation requires many of these same materials for semiconductors, batteries, and computing infrastructure.
We're attempting to mine our way to sustainability, creating new environmental challenges to address existing ones. Take electric vehicles - whilst promising cleaner mobility, they are triggering a surge in mining activities. The International Energy Agency estimates we'll need to increase critical mineral production by up to six times by 2040 to meet green technology demands alone (https://lnkd.in/ena32mWF). Add the exponential growth in digital infrastructure, with its intensive water requirements for cooling data centres and semiconductor manufacturing, and these figures become even more daunting.
This challenge is inherently systemic. Every 'solution' seems to create new problems. Renewable energy reduces carbon emissions but intensifies land use and mineral extraction. Digital technologies promise efficiency gains but require energy-intensive data centres and constant hardware updates, each requiring resources and generating waste.
This is challenging traditional business adaptation models. The accelerating pace of change, coupled with growing resource competition and geopolitical tensions around critical minerals, water and land, creates a perfect storm of uncertainty. How can businesses navigate this complexity whilst genuinely contributing to sustainability?
While the twin transition offers us some pathways towards sustainability, can we complement these with deeper transformations in our consumption patterns and value creation models? Can we optimise resource use and create truly regenerative systems?
These are complex questions without easy answers. But as we rush into these transitions, we must pause to consider whether we're solving our problems or simply shifting them from one domain to another. What's clear is that foresight and systems thinking have never been more crucial for navigating this challenging terrain.
