Climate change: Green growth is possible

Katrina, Sandy, Irene, Andrew, Lothar. Climate change has many names. Climate change is real. It is human-caused, to a large extent. And it is having massive impacts: thousands of deaths, depopulated areas, damage in the billions. This is why in these days the world is looking to Bonn, full of hope. At the United Nations world climate conference, delegates from 197 countries are working to limit CO2 emissions – and, thus, limit global warming.

It is all too obvious that we need to do this. We are living off of our capital, our essential assets. In 2017, more resources have been consumed by today than can be replenished in the course of a year. Most of this consumption is caused not by private households but by companies. All climate policy, therefore, needs to consider companies and their role. At the same time, all critics of growth must realize that people will never accept any economic concept that does not provide for prosperity and welfare and, most importantly, that does not assure broad participation in prosperity.

The concept that people will accept on these terms is called the "social market economy." It is the only concept that provides for prosperity and participation. The dilemma behind it is that it, too, follows a (conventional) growth concept. And growth simply involves resources consumption – and, usually – CO2 emissions.

So how can we sever the link between economic growth and resources consumption? In my view, the answer is "extensive digitization." This is because digitization has three characteristics that can help us tackle our challenges.

1.  First, digital products develop exponentially. As a result, their usefulness rapidly increases, while the resources they use per product hardly increase at all – and thus tends "toward zero." Jeremy Rifkin termed this phenomenon the "zero marginal cost society." Resources costs and consumption are still closely tied to one another in that concept, however.

2. Digitization also means dematerialization. It thus also means resources conservation. For example, a key can become an app. Now, you no longer need any metal to make it. You no longer need any machines to manufacture it. And you no longer need any energy for such machines. Back in the day, we had the "Encyclopedia Britannica." Publishing it took tons of paper. Today, the world's knowledge is online.

3. Digitization is making a "sharing economy" possible, an economy that considerably enhances the use and value we get from existing goods. The primary purpose of automobiles, for example, is to get people from A to B. But automobiles stay parked for 92 percent of their lifetimes. Does it make sense to invest in an automobile, and in the maintenance it requires, when you can simply share one with your friends or neighbors? And wouldn't that be more sustainable?

The quiet, green growth

Already, digitization and its strengths are bringing about that which I call "quiet, green growth." Because car sharing, and use of online encyclopedias such as Wikipedia, can be very cheap or even free, the resulting increases in our prosperity and in our standard of living no longer show up in our gross domestic product. (Digital) growth is here, but it is not appearing in the economic ratios we use. In other words, completely new dimensions of efficiency are emerging.

The energy sector provides a vivid example. By 2020, 30 percent of the electricity used by EU countries is to come from solar power, wind power or hydropower. But it is not enough to simply build more wind and solar generating capacity. We also need efficient electricity distribution. Electricity suppliers need to know where and when energy is being produced, and needed, and in exactly what amounts. Smart grids can be used in all links of the electricity delivery chain. They evaluate energy, consumer and environmental data and thus can effectively predict and control supply and demand.

The transformation of our energy sector thus clearly depends on digital technologies, but "digital" can do much more. Accenture, the consulting and professional services company, recently published a study entitled "A digital vision for Europe." It emphasizes that digitization can do much more than contribute to the solution of environmental problems. It also can provide answers to urgent challenges in areas such as education, health and nutrition. Extensive, systematic use of digital technologies could cut CO2 emissions by 34 percent. Car sharing could reduce the numbers of vehicles by 35 percent. And intelligent traffic management systems can reduce traffic jams in our cities. Deutsche Telekom, for example, is already cooperating with 50 cities on a smart parking system. Drivers use an app that guides them directly to available parking, and they no longer need to spend hours driving around looking.

Smart farming is another example. It can increase yields by 30 percent on existing areas under cultivation. And finally, by the year 2030, 57 million people will likely have earned a degree from an online university. And have learned from the best teachers worldwide.

On the other hand, it would be wrong to greenwash digitization and thus give all digital companies per se a blanket seal of approval. Digitization can solve problems, but it also creates new ones. Such as the electronic scrap caused by the short lifetimes of our technical devices such as smartphones. Germans still have some 100 million old cell phones tucked away in drawers in their homes. Those phones hold resources that could be recycled.

Digitization saves energy

Or think of energy consumption. If the Internet were a country, it would rank sixth on the list of countries with the highest electricity consumption, according to Greenpeace. The digital economy must thus focus on building data centers that are more and more efficient. Like that being operated by Deutsche Telekom in Biere, near Magdeburg, which uses 30 percent less energy than conventional data centers do. All of the energy it uses, by the way, is "green energy." That data center is in keeping with the company climate protection aims Deutsche Telekom has set itself. We want to cut our CO2 emissions by 20 percent, in comparison to their level in 2008, by the year 2020. We have already cut our travel-related emissions by 34 percent. We have significantly reduced our flying by increasing our videoconferencing.

Overall, digitization can save up to 10 times more energy than it uses. It is thus an important element in any efforts not only to agree on climate objectives but also to achieve them. And to do so without forcing people to give up any of their prosperity. On the contrary, digitization can make many things easier, better and more accessible.

For all of this to be possible, we need networks such as the ones being built by Deutsche Telekom. This year, we are investing 5 billion euros in Germany alone – more than other companies are investing – and we are very consciously investing with the aim of nationwide coverage. We want 80 percent of all households to have bandwidth of at least 50 Mbps by 2019, with many having up to 250 Mbps. That is also a "climate objective" that Deutsche Telekom has set itself. In short, Bonn is sending out strong signals for the environment, and it is doing so not only during the climate conference. Day in and day out, we are providing the basis for applications that can help reduce CO2 emissions. And from here, we are providing the basis for digital participation by people in both cities and rural areas.

Friedman was wrong

The economist Milton Friedman has turned out to be wrong in famously saying "the business of business is business." The business of business has long been about much more than that. Companies today have to move within a "sustainability triangle." They have to combine economic, ecological and social criteria. And policymakers have to provide the necessary framework. Only then will companies have a good future. And only then will planet Earth also have a good future. With these things in mind, I, both as CEO of Deutsche Telekom and as a father, wish all of you and the climate conference in Bonn every success!