Shaping sustainability in business via ICT tools

With climate change posing a global challenge, adopting ICT solutions in various industries would be a win-win way to reduce India’s carbon trail, says a DESC Report.

The new millennium has witnessed a perceptible change in people’s attitude towards climate change issues. Public denial has given way to grudging acceptance that global warming and climate change are not scaremongering by environmentalists and scientists. Erratic weather patterns sparked by climate change have galvanized nations worldwide to seek urgent measures to address the issue. Individuals, institutions and companies have realized that lifestyle patterns and business operations must now adhere to environment-friendly norms, sustainability being the chief criteria.

India has made its resolve clear about improving the energy efficiency of its industry by setting up the BEE (Bureau of Energy Efficiency), releasing the NAPCC (National Action Plan on Climate Change) document in June 2008 and declaring voluntary targets for 2020 in its efforts to create a low-carbon economy. India’s goal: reduce the emissions intensity of GDP by 20-25% by 2020 compared to 2005. While the NAPCC seeks to mitigate climate change there are no clear guidelines on how to achieve this and low carbon pathways are still evolving.

Recognizing that climate change issues are not solely the responsibility of the Government but of private companies and institutions too, select private and public entities have joined hands to form the Digital Energy Solutions Consortium India (DESC India). The Consortium seeks to shape a national strategy to promote the role of ICT (Information and Communications Technology) in reducing India’s energy requirements and encouraging practices that promote a healthier environment without impeding India’s economic growth.

India’s challenge lies in achieving economic goals without sacrificing the environment. This is possible, DESC emphasizes, by embedding ICT in all activities. DESC believes ICT can play a key role in reducing emissions across various Indian industries. Global assessments have shown that while ICT has a 2% carbon footprint globally , its use in other industries can potentially reduce emissions of the remaining 98% – generated by all the other industries – by many times its own weight.

But to fully realize the potential role ICT can play in India’s climate change efforts, a conducive system for ICT adoption first needs to be developed. Three things should be done to achieve this: (1) study the barriers to ICT adoption, (2) review the prevailing policy framework, and (3) recommend ways to increase ICT adoption.

This is precisely what the DESC Report does, including covering gaps in the NAPCC document. The Report explores potential opportunities for greenhouse gas (GHG) reduction via ICT solutions in the target sectors of the three mitigation-related missions of NAPCC – National Mission on Enhanced Energy Efficiency, National Mission on Sustainable Habitat and National Solar Mission. The Report reveals how ICT can act as an enabling technology for sustainable development by increasing energy efficiency in production processes, making road transport and logistics processes more efficient and thereby reducing the carbon footprint of select sectors.

The total cost of ICT implementation in identified sectors – considering moderate penetration of ICT solutions in 2020 and 2030 – is estimated at INR 49,700 crore and INR 156,100 crore, respectively. These investments correspond to cost savings of around INR 7,300 crore per annum and INR29,200 crore p.a. respectively. Identified ICT solutions can potentially lead to GHG emission savings of up to 450 million tonnes CO2 p.a. in 2030 – approximately 10% of estimated GHG emissions in 2030 for the sectors covered in the study, as well as energy cost savings of around INR 137,000 crore p.a. in 2030, which is approximately 2.5% of India’s current GDP.

Moreover, of the 100 million tonnes of carbon dioxide emission reduction target of the Energy Efficiency mission by 2015, ICT adoption in Buildings, Transport and the nine sectors identified under PAT (Perform, Achieve and Trade) scheme could contribute about 31 million tonnes – about 30% of the 2015 target. Commercial Buildings, Road Transport and Power Sector have the maximum saving potential of 42%, 30% and 16% respectively. Regarding reduction of GHG emissions in Transport, the Report says that mobility management systems, telecommuting, virtual meetings and supply chain and logistics optimization systems could significantly enhance the effectiveness and efficiency of surface transport systems.

With the Railways striving hard to meet revenue targets, ICT adoption could be useful. More than 1.1 billion litres of diesel equivalent can be saved annually if ICT measures are implemented in the Railways in 2030. Since diesel is subsidised in India, going by present subsidy rates, reduction in diesel consumption would lower the Government’s subsidy burden by INR 198 crore annually in 2030. The Railways would thereby save INR 3,850 crore annually in 2030.

Despite sizeable savings being possible via adoption of ICT solutions in target sectors, many pervasive barriers impeding large-scale implementation of these technologies have been identified. The key barriers include:
Demand side barriers: High cost of technology; lack of awareness about available technologies; lack of ICT skills; inadequate baseline data on energy use; difficulty in retrofitting existing plants; and, weak regulatory norms for carbon emissions.*

Supply side barriers: Inadequate standardization; intellectual property rights; lack of financing mechanisms; lack of public investments towards capacity building; and inadequate R&D support.*

To overcome these hurdles, the Report recommends key actions while developing strategies for increased ICT adoption in the three mitigation-related missions of NAPCC, including: creating a platform for green jobs, implementing measures to develop ICT skills, rationalising direct and indirect taxes, encouraging R&D via institutional and financial support, and facilitating standardization.

To elucidate its point, the DESC Report cites case studies of how ICT adoption in traditionally non-IT sectors has led to energy and GHG emission savings. For instance, a street lighting energy conservation project by the Bangalore Development Authority has reduced energy consumption of the town towards street lighting by up to 45%. Such projects can be replicated in other cities across India. Going by conservative estimates, such upgrades could lower energy consumption in street lighting by up to 30%.

Or take mobility management. Implementation of ICT-enabled mobility management systems alone in 2030 can offset emissions created by 12 million cars, travelling an average of 18,000 km every year. This is equivalent to 16,500 million litres of diesel or 17,200 million litres of petrol saved.

Backed by specific recommendations, the DESC Report could be an excellent guide for various industries to adopt ICT-based solutions as well as policymakers to chart pathways to a low carbon economy. The one-time implementation costs of adopting ICT-based solutions can be amortized over a period of time, ensuring a win-win solution for users as well as the nation. Users benefit via lower costs in the long run, while India benefits by moving closer to its carbon emission targets.

The author Rahul Bedi is Director, Corporate Affairs at Intel South Asia. He is responsible for Intel’s government relations, education initiatives, industry body relations as well as corporate social responsibility programs for India, Pakistan, Bangladesh and Sri Lanka.

Image(s) Courtesy:
Jeff Attaway
Franco Folini