Clean Connection:

Introduction

Digitization and expanded connectivity, coupled with the right policies, have the potential to support Canada’s climate objectives for carbon emission reductions. Canada, among over 120 countries worldwide, has committed to a net-zero emissions target by 2050 and a 40 percent reduction by 2030.6Net-Zero Emissions by 2050, Government of Canada, January 2023, https://www.canada.ca/en/services/environment/weather/climatechange/climate-plan/net-zero-emissions-2050.html. In 2021, Canada strengthened its climate plan and released A Healthy Environment and a Healthy Economy, which builds on the 2017 Pan-Canadian Framework on Clean Growth and Climate Change, outlining its plan to set and enforce emissions reduction targets through four main pillars: pricing carbon pollution, measures to further reduce emissions across the economy, measures to adapt to the impacts of climate change and build resilience, and actions to accelerate innovation, support clean technology, and create jobs.7Pan-Canadian Framework on Clean Growth and Climate Change, Government of Canada/Environment and Natural Resources, June 2022, https://www.canada.ca/en/services/environment/weather/climatechange/pan-canadian-framework.html. Since then, Canada also enacted the Net-Zero Emissions Accountability Act, which enshrines into law the federal target to achieve net-zero by 2050 and sets enforcement mechanisms through legislative oversight to expand accountability and transparency in delivering on climate targets.8Canadian Net-Zero Emissions Accountability Act. Government of Canada, https://laws-lois.justice.gc.ca/eng/acts/c-19.3/fulltext.html.

Despite these efforts, Canada continues to lag in achieving its emission reduction goals. Canada has had nine climate plans since 1990 and has failed to achieve the targets set out in those plans.9Thurton, David. “After Years of Missed Targets, Liberals Table their Climate Plan This Week.” CBC News, March 28, 2022, https://www.cbc.ca/news/politics/climate-change-canada-emissions-1.6397776. A Canadian Centre for Policy Alternatives report finds that, from 2016 to 2019, Canada’s emissions increased by 3.3 percent, far faster than the United States’ 0.6 percent growth over that period.10Woodside, John. “Canada’s Embarrassing Climate Record is Worst of G7 Nations.” National Observer June 1, 2021, https://www.nationalobserver.com/2021/06/01/news/canadas-climate-record-worst-g7-countries. 11Hughes, J. David. Canada’s Energy Sector: Status, Evolution, Revenue, Employment, Production Forecasts, Emissions and Implications for Emissions Reduction (Corporate Mapping Project), June 2021, https://policyalternatives.ca/sites/default/files/uploads/publications/BC%20Office/2021/06/REPORT_ ccpa-bc-cmp_canadas-energy-sector.pdf. From 2020 to 2021, Canada’s greenhouse gas (GHG) emissions increased by 1.8 percent,12Greenhouse Gas Emissions, Government of Canada, https://www.canada.ca/en/environment-climate-change/services/environmental-indicators/greenhouse-gas-emissions.html. well out of step with other G7 peer countries that successfully reduced GHG emissions by 4.4 percent to 10.8 percent during the same period.13Ibid. Canada’s failure to meet its reduction targets has led observers to become increasingly skeptical of Canada’s ability to achieve its net-zero target by 2050.

Although Canada lags behind in achieving emissions reduction, there is significant potential for increased digitization and connectivity to support Canada’s transition to net-zero. The Global Enabling Sustainability Initiative (GeSI) estimates that internet-enabled solutions could reduce greenhouse gas emissions by 16.5 percent.14GESI Mobile Carbon Impact, GeSI, https://www.gesi.org/research/gesi-mobile-carbon-impact#:~:text=Additional%20analysis%20completed%20for%20the,emissions%20from%20Ireland%20or%20Switzerland. Some estimates suggest that, by 2030, ”smarter” systems could save 10 times the emissions that they generate, pointing to the potentially transformative effect of ICT on the energy-intensity of the economy.15#SMARTer2030, GeSI, https://smarter2030.gesi.org/downloads/Full_report.pdf.

This future is possible as businesses and the economy continue to evolve, incorporating new innovations and pushing increased adoption of sustainable solutions to effectively reduce emissions in the long run. For example, 44 percent of CEOs in the United Nations Global Compact-Accenture CEO Sustainability Study see a net-zero future for their company in the next 10 years and 59 percent said they are developing low-carbon and renewable energy across their operations today.16Daugherty, Paul, Kishore Durg, Peter Lacey, and Pavel Ponomarev. The Green Behind the Cloud. Accenture, 2020, https://www.accenture.com/content/dam/accenture/final/a-com-migration/manual/r3/pdf/pdf-135/Accenture-Strategy-Green-Behind-Cloud-POV.pdf. Companies are also finding that their commitment to the climate aligns with their business model, making it financially attractive to invest in solutions to effectively reduce their emissions. Between 2013 and 2019, companies with consistently high environmental, social, and governance (ESG) performance achieved 4.7 times higher operating margins and lower volatility than low ESG performers over the same period.17Ibid.

Objectives, Scope and Methodology

This White Paper explores the intersection of climate and connectivity, offering a preliminary analysis of how digital transformation and the adoption of new technologies could also support GHG reductions and a net-zero future. It also seeks to uncover perspectives from Canadian industries and companies that are thinking about how they might engage digital technology to achieve their net-zero goals. To date, much of the work in this space has been focused on specific industries with high levels of emissions (e.g., agriculture, mining, transportation). However, this has missed the big-picture conditions that will be required to underpin advancements in energy efficient innovations, including 5G+ connectivity and digitization. In the emergent space of digital climate policy, this seeks to spur an important cross-sector discussion among Canadian policy, business, and civil society decision-makers, in a moment when Canada’s pursuit of a net-zero future is occurring amidst the rapid and transformative digitization of the country’s economy and society.

This paper relies on secondary research and collates data from a review of existing publications on electronic databases. This includes searching for and identifying relevant literature from sources such as legal and policy frameworks from peer jurisdictions and international organizations, and media reports, federal and provincial government reports, briefs, memoranda, and websites. The paper is also informed by views and perspectives gathered from a diverse range of stakeholders in Canada. Through an open-ended questionnaire (see Appendix I for details) and a one-day policy workshop held on May 24, 2023, cross-sectoral representatives from participating organizations were surveyed for their impressions and insights.

This paper seeks to spur an important cross-sectoral discussion among Canadian policy, business and civil society decision-makers, in a moment when Canada’s pursuit of a netzero future is occurring amidst the rapid and transformative digitization of the country’s economy and society.

Context-setting and Key Terms

An important starting point in considering the intersection of climate and connectivity is applying a general methodological frame to how the telecommunications and ICTs can impact the environment, The scholars Lorenz M. Hilty and Bernard Aebischer, in their book chapter ICT for Sustainability: An Emerging Research Field, offer a useful three-level analytical model:

1. First-order effects are “the direct environmental effects of the production and use of ICTs”;18Hilty, Lorenz M. and Bernard Aebischer. “ICT for Sustainability: An Emerging Research Field.” In ICT Innovations for Sustainability: Advances in Intelligent Systems and Computing 310 (2015). https://doi.org/10.1007/978-3-319-09228-7_1.
2. Second-order effects are “the indirect environmental impacts through [the ICT impact on] the change of production, processes, products, and distribution systems”;19Ibid. and
3. Third-order effects are “the indirect environmental impacts through [the ICT] impacts on lifestyles and value systems.”20Ibid.

Researchers have added to this categorization of order effects another dimension that distinguishes between the positive and negative effects of ICT — what they call, “ICT as part of the problem or ICT as part of the solution.”21Ibid.

Studies have found that the digital and ICT sector directly contributes only two to four percent of emissions.22Baliga, Jayant and Robert Ayre. “Energy Consumption in Wired and Wireless Access Networks,” IEEE Communications Magazine, June 2011, https://people.eng.unimelb.edu.au/rtucker/publications/files/energy-wired-wireless.pdf. In terms of energy consumption, estimates show that powering digital devices (computers and smartphones) and the supporting infrastructures (communications networks and data centres) consumed about five percent of global electricity use in 2012,”23Morley, Janine, Mike Hazas and Kelly Widdicks. “Digitalisation, Energy and Data Demand: The Impact of Internet Traffic on Overall and Peak Electricity Consumption.” Energy Research and Social Science 8 (2018): 128-137. https://www.sciencedirect. com/science/article/pii/S2214629618301051?via%3Dihub and recent estimates range from four to six percent as of 2020.24Ross, Aimee and Lorna Christie. Energy Consumption of ICT. UK Parliament, September 2022, https://post.parliament.uk/research-briefings/post-pn-0677. Direct contribution to emissions from the digital sector outlines the emissions generated and energy used to produce and operate ICT technology and would be categorized as “ICT as part of the problem”. While direct contribution to emissions from ICT is low relative to other industries, estimates show that the ICT sector and the incorporation of digital solutions can create up to a 20 percent reduction of total global GHG emissions, mainly through indirect upstream and downstream effects.25Digital for Climate Scenarios, World Economic Forum, https://initiatives.weforum.org/digital-transformation/climate-scenarios. 26Malmodin, Jens and Permilla Bergmark. ICT’s Potential to Reduce Greenhouse Gas Emissions in 2030, Ericsson, 2015, https://www.ericsson.com/en/reports-and-papers/research-papers/exploring-the-effects-of-ict-solutions-on-ghg-emissions-in-2030.

This indirect impact consists of both second- and third-order effects where efficiency gains from technology solutions could make manufacturing/ supply chain cleaner (second-order) and enable changes in lifestyle such as remote work (third-order). These positive impacts could be categorized as ”ICT as part of the solution”.

The concept of “order effects” offers a lens for categorizing the pathways of influence that telecommunication and ICT solutions are having or could have on climate goals and emissions reductions. Internet of Things (IoT) solutions — which refers to how connected devices and software, with sensory and processing abilities, can connect and share data with other devices and systems over the internet or a communication network to increase operational efficiency — offers wide-reaching impacts on processes that connect various aspects of our increasingly digitized economy. Understanding the complexity of emission sources and how digital solutions can transform the ICT industry, including transforming the general ecosystem of industries that support it as well as the industries that it supports, is key to instituting the right policies to maximize emissions reduction.27Friedrich, Roman, Stefan Hoffmann, Tobias Lampe, and Sebastian Ullrich. Putting Sustainability at the Top of the Telco Agenda, Boston Consulting Group, June 2021, https://web-assets.bcg.com/d1/bb/09fa1876412d8725e80c83d1cf5b/bcg-putting-sustainability-at-the-top-of-the-telco-agenda-jun-2021.pdf.

Incorporating digital solutions to support a net-zero transition is not a linear solution: instead, it requires prioritizing the reciprocal and intertwined nature of the relationship between the ICT industry and all other industries and our lifestyles. The digital decade has presented the world with dual challenges: the green transition and the digital transition. These interconnected hurdles highlight the opportunity to build a cutting-edge, sustainable economy in Canada. Termed the twin pillars, these challenges are co-dependent: constructing a sustainable future demands increased automation and digitization, and at the same time increased efficiency and the elimination of excess waste.28Green Digital Sector, European Commission, February 2023. https://digital-strategy.ec.europa.eu/en/policies/green-digital.

Uncertainties in the Potential Impact of Connectivity on Climate Goals

The previous examples of what a smart, net-zero future could be in Canada require individuals, businesses, governments and households to be connected to the internet and communication networks to use the digital technology solutions required to bring about a net-zero reality. Representatives in the roundtable highlighted that Canada currently does not have the sufficient network capacity and infrastructure to accommodate the level of digitization that is imaged or needed for a net-zero future. Expanding connectivity and creating resilient networks is one common thread, underlying the infrastructure from which these advancements in energy efficiency can be realized.

However, expanding connectivity and digitization, while at the same time ensuring absolute or total energy demand and consumption is reduced, is not an easy feat: many complex, and often conflicting, forces could impact overall levels of energy consumption in our quest to transition to a smart, clean future.

The Energy Intensiveness of the Choices We Make

The transition to a net-zero future that relies on better connectivity is fraught with challenges. This move will require industry, community, government, and individuals to make choices and trade-offs that effectively weigh technologies’ efficiency potential against their up-front cost and energy intensiveness. For example, when thinking about the infrastructural design of our technological future, policymakers and industry must consider how new mobile communication networks, which promote greater reach, faster speeds and allow individuals to stay connected through greater distances, could actually be more energy intensive than other connectivity choices. For example, mobile networks use greater energy to transmit data than fixed networks.78Ayre, R., Baliga, J. (June, 2011). IEEE Communications Magazine. Energy Consumption in Wired and Wireless Access Networks. https://people.eng.unimelb.edu.au/rtucker/publications/files/energy-wired-wireless.pdf. Bento asserts that the energy required by mobile phone infrastructures “is ten times higher than the direct consumption of the handsets,” creating a “sizable impact on energy demand.”79Hazas, M., Morley, J & Widdicks, K. (2018). Energy Research & Social Science. Digitalisation, energy and data demand: The impact of Internet traffic on overall and peak electricity consumption. https://www.sciencedirect.com/science/article/pii/S2214629618301051#bib0145.

The majority of the energy used by the internet is consumed in “the transmission and access networks delivering the internet” and “has been estimated to be approximately 0.5 percent of typical national consumption,” with rates likely to rise as traffic levels continue to increase with digitization and more people getting connected.80Balinga and Ayre. “Energy Consumption in Wired and Wireless Access Networks,” https://people.eng.unimelb.edu.au/rtucker/publications/files/energy-wired-wireless.pdf. In one study, researchers find that optical-access networks — a type of fibre-to-the-premise installation in which a single fibre from the backbone access network feeds one or more clusters of customers — is the most energy-efficient option of available access technologies, including wireless networks.81Ibid. The researchers conclude that “wireless technologies will continue to consume at least 10 times more power than wired technologies when providing comparable access rates and traffic volumes.”82Ibid.

Despite these challenges, our technological infrastructure will likely continue to prioritize a mobile-first future as the industry projects continued growth. A study by Ericsson found 70 percent growth in total global mobile data traffic between 2016 and 2017, and forecast a compound annual growth rate of 42 percent through to 2022—an eight-fold increase compared to 2016.83Ericsson Mobility Report, Ericsson, November 2022. https://www.ericsson.com/en/reports-and-papers/mobility-report. In addition, data traffic to smartphones, including that sent over Wi-fi networks, is forecast to exceed the overall traffic from personal computers by 2021, accounting for 39 percent of overall internet traffic, compared to PCs at 28 percent, TVs at 19 percent, and tablets at eight percent, further fueling a mobile-first future.84The Zettabyte Era: Trends and Analysis, Cisco, July 2016, https://webobjects.cdw.com/webobjects/media/pdf/Solutions/Networking/White-Paper-Cisco-The-Zettabyte-Era-Trends-and-Analysis.pdf. Analysts also predicted that the number of connected devices will grow from 2.3 per person in 2016 to 3.5 in 2021, further escalating energy consumption from mobile access.85Morley, Hazas et al. “Digitalisation, Energy and Data Demand,” https://www.sciencedirect.com/science/article/pii/S2214629618301051#bib0145. With greater growth of internet traffic, total internet energy consumption is estimated to grow by 60 percent from 2020 to 2030, and access network energy consumption is estimated to triple.86Nuutinen, Joonas. “A Comparison of the Energy Consumption of Broadband Data Transfer Technologies.” Aalto University, November 2021, https://joonasnuutinen.fi/wp-content/uploads/2022/01/Nuutinen2021_A-Comparison-of-the-Energy-Consumption-of-Broadband-Data-Transfer- Technologies.pdf.

While reliance on smartphones and mobile access is critical in a connected smart society, policymakers and industry need to monitor the energy intensity trade-offs and marginal efficiencies lost or gained when considering infrastructure development options to better understand technology’s overall impact on total energy consumption and emissions. A key uncertainty underpinning this consideration is the GHG-intensity of the electricity used by digital technologies, and the ability of Canada’s energy systems to deliver sufficient renewable and net-zero electricity into the future as demand grows.

With greater growth of internet traffic, total internet energy consumption is estimated to grow by 60 percent from 2020 to 2030, and access network energy consumption is estimated to triple.

Reduction Estimates Are Not Easily Determined

Projections around reductions in emissions from increased connectivity and digitization are based on predictions that attempt to model human behavior, which could be vulnerable to error. It is difficult to achieve accuracy in GHG reductions estimates because prediction models must take into consideration a range of human factors that could have opposing effects on the total level of emissions.87“Emissions from computing and ICT could be worse than previously thought.” Lancaster University, ScienceDaily, September 2021, https://www.sciencedaily.com/releases/2021/09/210910121715.htm. Researchers have highlighted that forecasting uncertainty may still be evident in research that links lifestyle changes and indirect impacts on the environment resulting from greater connectivity and digitization based on assumptions about behavior.88Morley, Hazas et al. “Digitalisation, Energy and Data Demand.” https://www.sciencedirect.com/science/article/pii/S221462 9618301051#bib0145. 89Freitag, Charlotte, Mike Berners-Lee, Kelly Widdicks, Bran Knowles, Gordon S. Blair, and Arian Friday. “The Real Climate and Transformative Impact of ICT: A Critique of Estimates, Trends, and Regulations.” Patterns 2, no. 9 (September 2021): 100340. https://www.sciencedirect.com/science/article/pii/S2666389921001884. 90Horner, Nathaniel C., Arman Shehabi and Ines L. Azevedo. “Known Unknowns: Indirect Energy Effects of Information and Communication Technology.” Environment Research Letters 11, no. 10 (October 2016): 103001. https://iopscience.iop.org/article/10.1088/1748-9326/11/10/103001. Predictions that assume increased connectivity and digitization tools will result in more individuals choosing to work remotely, or installing smart home monitoring devices to encourage energy efficient choices, will require the general infrastructure of society to transition to green-first delivery models and a level of climate consciousness that can all together enable these lifestyle changes. Moreover, business practices and operations will need to transition in parallel to enable a green future. These behaviours are difficult to guarantee without a change in society’s underlying value systems, including climate-threatening lifestyles such as overconsumption and materialism. 

For example, some research into whether digitization will impact travel patterns finds “little evidence of anticipated, direct substitutions between travel and online accessibility” and instead “more complex and debated effects emerging over time.”91Mokhtarian, Patricia. “If Telecommunication is such a Good substitute for Travel, Why Does Congestion Continue to get Worse?” Transportation Letters 1 no. 1 (2013): 1-17. https://doi.org/10.3328/TL.2009.01.01.1-17. Researchers have debated the “net balance of additions and savings to carbon emissions and energy consumption”92Morley, Hazas et al. “Digitalisation, Energy and Data Demand,” https://www.sciencedirect.com/science/article/pii/S221462 9618301051#bib0145. 93Horner, Shehabi and Azevedo. “Known Unknowns,” https://iopscience.iop.org/article/10.1088/1748-9326/11/10/103001. from digital technologies, and debates in estimations continue to loom large. A better understanding of how lifestyle and daily habits change, parallelled with the proliferation of devices, technologies, and online services that continuously impact these patterns of behavior, is the foundation upon which policies and initiatives linking digital and climate goals should depend.

Takeaways for Industry Leaders and Policymakers

Emerging from the research scan and cross-sector stakeholder input, this section briefly surveys the current state of “digital climate” public policy in Canada, and outlines a set of recommendations and mobilization opportunities for advancing digital climate action in Canada. 

Current “Digital Climate” Public Policies in Canada 

There are currently no policies in Canada that explicitly outline or acknowledge the role digital and connectivity policies can play in shaping our climate objectives and meeting emission goals. Although the federal government and other governments have introduced some important programs at the intersection of climate and connectivity, the approach lacks a concerted effort to maximize the potential for digitization to support a faster transition to a net-zero economy in Canada. For example, Canada does not currently have the network capacity and infrastructure to accommodate all of the digital solutions and applications that may be necessary in the net-zero transition. 

An example is the federal government’s Smart Cities Challenge, launched in 2017 as a pan-Canadian competition adopting a smart cities approach to expand innovation and quality of life through data and connected technology initiatives.103Smart Cities Challenge. Government of Canada/Infrastructure Canada, August 2021, https://www.infrastructure.gc.ca/cities-villes/index-eng.html. In the latest federal budget, the government launched a new round of the Smart Cities challenge, focused on using connected technologies and data to improve climate resiliency.104Budget 2023. Government of Canada /Department of Finance Canada, March 2023, https://www.budget.canada.ca/2023/report-rapport/chap3-en.html. Moreover, the 2023 federal budget outlines over $60 billion over the next 10 years for Clean Electricity Investment Tax Credits, which provide businesses from 15 percent to 40 percent refundable credit for eligible investments in technologies that support the development of clean electricity and manufacturing products or materials, as well as equipment for carbon capture and geothermal energy systems.105Government of Canada/Environment and Climate Change Canada. “Minister Guilbeault Highlights the Big Five New Clean Investment Tax Credits in Budget 2023 to Support Sustainable Made-in-Canada Clean Economy,” news release April 2023, https://www.canada.ca/en/environment-climate-change/news/2023/04/minister-guilbeault-highlights-the-big-five-new-clean-investment-tax-credits-in-budget-2023-to-support-sustainable-made-in-canada-clean-economy.html.

There are currently no policies in Canada that explicitly outline or acknowledge the role digital and connectivity policies can play in shaping our climate objectives and meeting emission goals.

Significant public policy and investment is also focused on digitizing energy systems. An example is the Smart Grid Program, facilitated by Natural Resources Canada, to accelerate the development of smart grids that modernize the delivery of electricity and increase hosting capacity of renewable generation. The program allocated $100 million over five years for the demonstration and deployment of projects across Canada, fostering an environment conducive to driving the country towards a more sustainable and resilient energy future.106Smart-Grids. Government of Canada/Natural Resources Canada, July 4, 2017, https://natural-resources.canada.ca/ climate-change/green-infrastructure-programs/smart-grids/19793. Canada has achieved significant progress in introducing smart grids, with 82 percent adoption nationally, attributed to a synergy of industry and governmental backing.107Turovets, Julia, Liliana Proskuryakova, Anna Starodubtseva, and Vincenzo Bianco. However, reaching 100 percent adoption remains challenging, primarily due to Canada’s decentralized electricity regulation, led at the provincial level, which has made national coordination challenging.108Build It: The State of the Canadian Electricity Industry 2023, Electricity Canada, 2023, https://www.electricity.ca/net-zero/build-it-the-state-of-the-canadian-electricity-industry-2023.

Other programs focus on adoption of digital technology across the economy. To further incentivize digital adoption in industry, the federal government launched the Canada Digital Adoption Program (CDAP) in 2022 to help Canadian small- and medium-sized business to incorporate digital tools by accessing two forms of funding: micro-grants of up to $2,400 to help pay for costs related to adopting digital technologies, and grants to help pay for the services of a digital advisor, who can support with the development of a digital adoption plan, with the opportunity to secure zero-interest loans of up to $100,000 from the Business Development Bank of Canada to help implement those plans. Yet, uptake of CDAP has been very low to date.

Policy and Mobilization Opportunities

A) Reduce first-order effects of ICT’s contribution to GHGs:

1. Meet industry standards for the ICT sector to achieve net-zero in its operations.
2. Support the transition to an emission-free electricity grid as a key enabler for greater digitization.

Reducing the Greenhouse Gas Impact of ICT

The telecommunications industry has a pivotal role to play in catalyzing society’s transition to a net-zero future. The development of evidence-based, implementable industry standards will underscore the urgency of addressing this issue and set a benchmark that encourages environment-conscious decision making at executive and operation levels. It will also signal to other industries a clearer path towards reducing emissions, by providing digital infrastructure that can be easily integrated within a variety of businesses across multiple sectors of the economy.

The Global System for Mobile Communications Association (GSMA) took the first steps in achieving an industry standard and collective agreement on reducing emissions, establishing energy consumption targets and achieving a net-zero future. In 2019, these companies established a goal to transform the mobile industry and achieve net-zero carbon emissions by 2050.109Ibid. A key component of this strategy involves climate disclosures. In 2020, comprehensive guidelines were issued detailing how operators could align with GSMA’s carbon emissions objectives.110Ibid. By April 2021, operators representing at least 50 percent of global mobile connections and 65 percent of industry revenues had pledged to adhere to science-based emissions reduction targets.111Ibid. The GSMA has also established a task force to aid operators in enhancing energy efficiency across networks and buildings, increasing access to and use of renewable energy, collaborating with suppliers on climate action, improving mobile device sustainability, and employing mobile connectivity to decrease carbon emissions through intelligent technologies.112Ibid.

A key enabler of this goal will be a clean electricity grid, as energy demand grows to power mobile networks, data storage, connected services, and other facets of Canada’s digitization. Canada has set a goal for Clean Electricity Regulations that achieve a net-zero grid by 2035. While Canada starts from a strong position of 82 percent of electricity coming from renewable sources, closing the remaining gap while maintaining affordability as demand increases will be critical. ICT can also play a significant role in supporting the development of a clean electricity grid through the incorporation of smart grids and more efficient energy-extracting technologies.

The telecommunications industry has a pivotal role to play in catalyzing society’s transition to a net-zero future.

These ICT-enabled solutions to the grid can generate more efficient renewable power and also better integrate the grid with smart monitoring devices that can, for example, manage demand by smoothing out demand peaks from electric vehicle charging. 

B) Enable second-order effects of ICT effecting changes in production, processes, products and distribution systems: 

3. Government to assess opportunities to align digital with climate policies, including a climate impact lens for digital policies and performance measures, to maximize the potential for emissions reduction. 
4. Government and industry to work together to support public and private investment in developing and deploying resilient telecommunication networks to ensure all Canadians maintain connectivity in the face of climate disruptions and expand equitable adoption of emission-reducing technologies across Canada by closing the digital divide through affordable 5G and fixed wireline in rural Canada, including through the effective release and use of spectrum.
5. Government to create incentives for digital adoption for small to medium sized businesses where the incorporation of technology is proven to enable emissions reductions, such as smart monitoring and sustainable agriculture practices. 
6. Government to establish new and strengthen existing funding mechanisms to provide sustainable support for development, commercialization and deployment of open-source technology and software solutions aimed at climate change mitigation. 
7. Government to clarify procurement policies to ensure they consider climate impacts and prioritize innovative Canadian companies as a means to expand adoption of digital technology solutions that enable emissions reduction within public sector organizations and operations, while also de-risking the purchasing of proven solutions for other actors in the economy. 

Enabling the Digital Infrastructure for Net-Zero and Increasing Digital Adoption 

While challenges and costs arise when building out networks and infrastructure to support greater connectivity, a net-zero future still requires continuous innovation and expansion of energy efficient communication networks to enable transitions to clean production and transportation within energy intensive sectors of our economy. This will require driving network and 5G deployment and investment to expand rural connectivity by maximizing the deployment of affordable 5G spectrum and fixed wireline in rural Canada and supporting climate and “smart” initiatives across the economy that require high-quality, reliable connectivity, particularly within GHG-intensive industries. As network and connectivity innovations expand, a transition to net-zero will also require encouraging digital adoption and buy-in among consumers, businesses and governments to enable more efficient operational processes.

Powering a fully connected smart city that can achieve net-zero emissions requires the expansion of resilient communication networks and infrastructure. A resilient network refers to the physical infrastructure that powers digital technologies, provides high-quality services with minimal disruption and the ability to safeguard against unpredictable impacts, system failures, or challenges to normal operation. Particularly in the context of climate change, the impacts of climate-related natural disasters add a further impetus to establish resilient networks that can continue to operate under harsher conditions. Resilient network infrastructure should also be universally available to allow all individuals to equally participate in society and access services, responsive to requests and user demands in an efficient manner, and scalable to adapt to a growing amount of traffic and a constantly changing digital environment.113Bondi, Andre B. “Characteristics of Scalability and Their Impact on Performance.” WOSP ‘00: Proceedings of the 2nd International Workshop on Software and Performance, September 1, 2000, https://dl.acm.org/doi/10.1145/350391.350432. This requires government and industry to work together to ensure affordable 5G and fixed wireline access across Canada, including through the effective release and use of spectrum, further investment in rural and Northern connectivity, increased competition, and subsidized services for lower-income communities.

The potential for digital solutions to positively impact climate goals also depends on industries’ ability to adopt technologies that can reduce emissions. A survey of Canadian firms conducted by the Bank of Canada in 2018 found that Canadian businesses show a higher level of adoption of cloud computing and e-commerce and low rates for 3-D printing and artificial intelligence (AI).114Fudurich, James, Lena Suchanek,and Lisa Pichette. Adoption of Digital Technologies: Insights from a Global Survey Initiative, Bank of Canada, April 12, 2021, https://www.bankofcanada.ca/wp-content/uploads/2021/04/sdp2021-7.pdf. Moreover, large firms show higher rates of adoption than small firms.115Ibid.

Despite some progress in digitization within larger firms, barriers to digital adoption remain for many businesses in Canada. A report by the Ontario Chamber of Commerce further illuminates the main challenges to incorporating technology for small to medium enterprises (SMEs) in Ontario. Firstly, small employers with smaller margins and limited access to external capital, particularly within the current high-inflation environment, do not have the capital resources to sufficiently invest in digitization.116Dessanti, Claudia. “Broken Links: Driving Technology Adoption within Ontario’s Small Businesses,“ Ontario Chamber of Commerce, 2022, https://occ.ca/wp-content/uploads/Broken-Links-Driving-Technology-Adoption-within-Ontarios- Small-Businesses.pdf#:~:text=The%20OCC%27s%202021%20 Business%20Confidence,skilled%20workers%2C%20and%20 broadband%20connectivity. In addition to resource limitations, the report also outlines gaps in digital skills for employees, highlighting that “attracting and retaining workers with digital literacy can be particularly challenging for small businesses in a tight labour market.”117Ibid. Lastly, the report outlines that “fast, affordable and reliable broadband connectivity” is the “fundamental prerequisite for businesses of any size to access digital resources and talent.”118Ibid.

These challenges are compounded when small businesses cannot incorporate the data analytics and AI solutions that can enable better monitoring of emissions and a deeper understanding of process inefficiencies that, if addressed, could help reduce energy use and carbon emissions. A survey of business and technology leaders conducted by KPMG in 2022 found that “overall adoption of AI among Canadian organizations is less than half of that in the US, with only 35 percent of Canadian businesses saying they currently use AI in their operations versus 72 percent in the US.”119More than one third of Canadian businesses experimenting with ChatGPT, KPMG Canada survey: Use of the popular generative artificial intelligence tool among Canadian organizations still lags the U.S. 2022. KPMG. https://kpmg.com/ca/en/home/media/press-releases/2023/04/us-outpacing-canada-in-business-adoption-of-ai.html. Canadian SMEs find it especially difficult to quickly adopt new AI solutions as they require precise data collection and management strategies for algorithms to produce accurate results.

Open-source software solutions are one way to provide organizations access to data analytics capabilities to provide better insight into emissions and energy use. Yet, open-source software often provides incomplete or fragmented solutions that small organizations, without the knowledge, expertise, or time, may find it difficult to piece together different data projects and code to address their unique business challenges. One example is the Open Radio Access Network (Open RAN), a critical network technology that connects users—including communications service providers—to mobile networks over radio waves. Open RAN provides open-source solutions that allow for interoperability and flexibility in the operation of mobile networks, a concept that can also be applied to other sectors of the economy that could benefit from greater efficiencies through better technology integration.

To further fuel advancements toward a net-zero future, the government can directly invest or create incentives, such as tax credits, when emissions reductions are enabled through digital adoption, such as smart monitoring and sustainable agriculture practices. For example, the federal government provides a number of tax credits for businesses looking to adopt clean technology. The Clean Electricity Investment Tax Credit provides a 15 percent refundable credit for “investments in technologies that are required in the generation and storage of clean electricity and its transmission between provinces and territories.” The Clean Technology Manufacturing Investment Tax Credit covers 30 percent of costs in “new machinery and equipment used to manufacture or process clean technologies and extract, process or recycle critical minerals.”120Government of Canada, “Minister Guilbeault Highlights the Big Five New Clean Investment Tax Credits in Budget 2023,” news release https://www.canada.ca/en/environment-climate-change/news/2023/04/minister-guilbeault-highlights-the-big-five-new-clean-investment-tax-credits-in-budget-2023-to-support-sustainable-made-in-canada-clean-economy.html. Incentives generated by the government could make it more affordable for SMEs to adopt cleaner technologies by offsetting some of the upfront costs of purchasing devices, software or other supporting digital systems.

The government can also further take the lead in expanding digital adoption through procurement to stimulate demand for clean technology. A report by the Smart Prosperity Institute highlights the bottlenecks challenging government procurement of clean technology, namely that early-stage companies working on clean innovations may be perceived as riskier than other technologies, thereby disincentivizing risk-averse procurement approaches from adopting innovative solutions from cleantech startups, which in Canada continue to struggle to transition from pilot stage to commercialization.121Buying Better: Leveraging Federal Procurement to Drive Demand for Canadian Cleantech. Smart Prosperity Institute, January 2022, https://institute.smartprosperity.ca/sites/default/files/Report%20-%20Cleantech%20Procurement.pdf. According to the report, in 2016, federal spending on cleantech procurement was about 3.7 percent of total government spending in Canada–a number deemed insufficient by Canada’s Economic Strategy Table, which recommended increasing cleantech procurement spending to five percent of total government spending by 2025.122Ibid.

C) Monitor third-order effects of ICT’s changes in lifestyles and value systems:

8. Government and industry to observe for “rebound effects,” whereby improved connectivity can induce new, more energy-intensive demands that counterbalance energy savings, and include these effects in the government’s monitoring and reporting of emissions levels within the economy.
9. Industry and government to commission empirical research from academia and/or institutes to assess the emission-related impacts of hybrid and remote work arrangements to better inform employers and policy.
10. Industry and government to jointly launch a federal-provincial-territorial process on digital and climate policy. Include ongoing engagement with municipal governments, Indigenous organizations, and stakeholders, to build common understanding, create momentum and establish shared commitments across government, industry and civil society stakeholder groups and find alignment on how digital policies can help Canada achieve its net-zero target.

Monitoring for Rebound Effects to produce Effective Emission Reduction Policies and Convening over this Shared Agenda

“Rebound effects” refers to the notion that improved digital and internet connectivity have the potential to induce “new, more energy-intensive forms of digital demand that could counterbalance energy savings.”123Røpke, Inge. “The Unsustainable Directionality of Innovation– The Example of the Broadband Transition.” Research Policy 41, no. 9 (2012): 1631-1642. https://doi.org/10.1016/j.respol.2012.04.002. For example, bandwidth demands for telecommunication networks “have increased at unprecedented levels…growing annually at an average rate of 50 to 60 percent and exceeding 100 percent growth during some years.”124Matthews, H. Scott, Thomas B. Morawski, Amy L. Nagengast, Gerard P. O’Reilly, David D. Picklesimer, Raymond A. Sackett, and Paul P. Wu. Planning Energy-efficient and Eco-sustainable Telecommunications Networks. Nokia Bell Labs, June 2010, https://ieeexplore.ieee.org/document/6781096/authors#authors. Particularly during and coming out of the pandemic, the transition to online delivery of most services, and the proliferation of web-based applications have accelerated the digitization of many aspects of everyday life. As the number of connected devices and level of data traffic continues to increase, the processing and storage power needed to keep these systems running will also need to grow significantly.

Some researchers argue that growth in some ICT uses is currently unsustainable.125Røpke, “The Unsustainable Directionality of Innovation.” https://doi.org/10.1016/j.respol.2012.04.002. For example, studies suggest that smart home technologies may actually be associated with increases in energy consumption, both directly (to run the new technologies and incorporate their use to existing consumption patterns) and indirectly, such as through increases in lighting and heating.126Hargreaves, Tom, Charlie Wilson, and Richard Hauxwell- Baldwin. “Learning to Live in a Smart Home.” Building Research & Information 46, no. 1 (2018): 1-13. https://doi.org/10.1080/09613 218.2017.1286882. 127Morley, Hazas et al. “Digitalisation, Energy and Data Demand,” https://www.sciencedirect.com/science/article/pii/S221462 9618301051#bib0145. Data centres for cloud storage pose another challenge. According to an Accenture study, “the number of large-scale data centres is increasing by 14 percent each year.”128The Green Behind the Cloud. Accenture. https://www. accenture.com/content/dam/accenture/final/a-com-migration/manual/r3/pdf/pdf-135/Accenture-Strategy-Green-Behind-Cloud-POV.pdf. As a result of this continuous growth, global data centre electricity use is now nearly equivalent to the annual consumption of the country of Spain (one percent of global consumption).129Ibid. This has increased the level of GHG emissions: global emissions from cloud computing were found to “range from 2.5 percent to 3.7 percent of all GHG emissions [as of 2019], thereby exceeding emissions from commercial flights (about 2.4 percent) and other existential activities that fuel the global economy” such as shipping, rice cultivation, and food processing.130Lavi, Hessam. “Measuring Greenhouse Gas Emissions in Data Centres: The Environmental Impact of Cloud Computing.” Climatiq, April 2022, https://www.climatiq.io/blog/measure-greenhouse-gas-emissions-carbon-data-centres-cloud-computing. 131Lean ICT: Towards Digital Sobriety. The Shift Project, March 2019, https://theshiftproject.org/en/article/lean-ict-our-new-report.

Emerging technologies, such as generative AI and cryptocurrency, also consume increasing amount of energy, contributing to GHG emissions. Analysis by the Cambridge Bitcoin Electricity Consumption Index finds that Bitcoin alone represents 0.65 percent of global electricity consumption, making it the twenty-seventh largest consumer of electricity on the planet as of 2021.132McCarthy, Niall. “Bitcoin Devours More Electricity Than Many Countries,” Forbes, May 5, 2021. https://www.forbes.com/sites/niallmccarthy/2021/05/05/bitcoin-devours-more-electricity-than-many-countries-infographic/?sh=388ef34e41a6. The advancement of generative AI technology inherently requires the development of larger models with greater amounts of training data to increase performance, thereby requiring increasing levels of computational power and, in turn, potential for emissions. A study by the University of Massachusetts Amherst conducted in 2019 found that the carbon footprint of training several common large AI language models “produced more than 626,000 pounds of carbon dioxide equivalent—nearly five times the lifetime emissions of the average American car (and that includes manufacture of the car itself).”133Hao, Karen. “Training a Single AI Model Can Emit as much Carbon as Five Cars in their Lifetimes.” MIT Technology Review, June 6, 2019. https://www.technologyreview.com/2019/06/06/239031/training-a-single-ai-model-can-emit-as-much-carbon-as-five-cars-in-their-lifetimes.

As Canada grapples with a net-zero society, a deeper understanding of the impacts of the technologies and lifestyle of the future is critical to understanding the overall impact of digital adoption on climate outcomes. For example, remote work that replaces a carbon-emitting transportation commute is undeniably a net benefit to a net-zero future. At the same time, employers will have to take into account a variety of considerations beyond GHG impacts in deciding their approaches to hybrid or remote work. And still, the availability of zero-emitting transit or electric vehicles could make such a trade-off less compelling over time.

Consequently, policies and initiatives to reduce emissions through ICT and expanded connectivity should become more holistic: a focus on the energy efficiency of digital infrastructures is not enough and should include the lifecycle GHG impacts of the change. For example, in one study, ICT applications that make freight transport more efficient were found to increase overall demand for transport (because transportation became faster and cheaper), whereas “utilizing the potential of ICT to dematerialize goods reduced the total demand for materials” and transport.134Hilty, Lorenz, P. Wäger, M. Lehmann, R. Hischier, T. Ruddy, M. Binswanger. 2004. “The Future Impact of ICT on Environmental Sustainability. Fourth Interim Report—Refinement and Quantification.” Institute for Prospective Technological Studies. https://www.ucc.co.ug/wp-content/uploads/2017/10/The-Future-impact-of-ICTs-and-Environmental-Sustainability.pdf. Understanding how marginal-efficiency gains impact total emission levels is a critical part of achieving a net-zero future in Canada.

Convening government, industry, and civil society in open and continuous dialogue is an important part of ensuring policies are well designed to effectively reduce overall emissions in the long term. This could take the form of a Federal-Provincial-Territorial Ministerial meeting with participation from relevant corporate and civil society groups. Developing a comprehensive policy framework is one way that government can take proactive measures in ensuring that society (individuals, private industry, and community) can maximize the positive effects of digitization, including increasing prosperity, fostering social justice, and improving efficiency, while minimizing its negative shortcomings, such as increases in absolute energy consumption due to rebound effects, or the exhaustion of valuable raw materials and energy during the design, development, manufacturing, and the use of these new technologies. The policy framework, and supporting ongoing consultations and dialogue between stakeholders, would also develop a shared, credible, and authoritative understanding of the potential of digital adoption in reducing emissions, detrimental costs of inaction and the urgency of meeting climate goals, which can further encourage clean technology uptake and climate conscious choices within all sectors of the economy.

While addressing the importance of digital policy in achieving net-zero on a national level is imperative, it is still critical to note the significant role of local initiatives and innovations in providing tailored solutions to specific community needs. Through greater open dialogue, local stakeholders could access greater resources to support their unique solutions and find a direct avenue through which to share their communities’ unique digital and climate needs.

Emerging technologies, such as generative AI and cryptocurrency, also consume increasing amount of energy, contributing to GHG emissions.