Benefits and challenges of the digital circular economy

Many companies are looking to technology to address the growing challenges of the global climate crisis.

Some potential options have emerged from the Fourth Industrial Revolution, such as IoT, robotics and AI. But company leaders must understand both the pros and cons of using tech in the name of sustainability before moving forward with implementation.

For example, some companies are increasingly looking to AI for ways to minimize greenhouse gas emissions, such as transportation planning. However, AI is a resource hog, producing large amounts of carbon dioxide, and AI model training creates large amounts of heat, requiring more water to cool the data center.

The circular economy model is also an increasingly popular topic in sustainability discussions. Companies following the circular economy model focus on using resources efficiently as well as minimizing emissions and waste throughout their supply chain.

In Gaia's Web: How Digital Environmentalism Can Combat Climate Change, Restore Biodiversity, Cultivate Empathy and Regenerate the Earth, Professor Karen Bakker, an environmental scientist and tech entrepreneur, explores how using digital technology could potentially support a circular economy model.

Using digital technology for sustainability has its supporters and detractors. Supporters see the potential to eliminate waste and enhance resource efficiency. Detractors raise concerns about the expanded use of hardware and infrastructure like servers and the continuing demand for metals and plastics because of this technology use.

In this excerpt from Chapter 5 of Gaia's Web, Bakker shares insights into the pros and cons of a digital circular economy.

In circular economies, technologists strive to avoid both pollution and extraction of nonrenewable resources from Earth. Technological systems can thus conserve and reuse, but not consume. The only consumption is of renewable resources, between living things; for example, food and biologically based materials (like wool or wood) can be used, but then feed back into ecosystems through processes like excretion and composting -- regenerating living systems like soil, thereby providing renewable resources for the economy. Biological systems can consume and regenerate and are the primary source of growth in a circular economy. In making these arguments, advocates draw on long-standing theories of cyclicality, systems-thinking and metabolism in both living organisms and machines. Contemporary variants of the circular economy argument include ecologist Janine Benyus's concept of biomimicry, architect Walter Stahel's "functional service economy," the "cradle to cradle" design philosophy of architect William McDonough and chemist Michael Braungart, Gunter Pauli's "blue economy" and theories of industrial ecology and natural capitalism.

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This collective set of developments is sometimes termed a Fourth Industrial Revolution: a convergent set of biological and digital innovations that will generate a complete makeover of industrial production (and industrial metabolism) through automation, cognitive computing, the Internet of Things and cloud computing-enabled data exchange in manufacturing technologies. Ecomodernists argue that these cyber-physical systems will enable decoupling, supporting continued economic growth as total environmental impacts shrink. Degrowth advocates argue that this is unlikely: even if feasible in principle, decoupling will not happen in the time frame necessary to avoid ecological tipping points, so alternative policy trajectories based on technological deceleration, redistribution, and material-energetic degrowth will be required.

Where do digital technologies fit within circular economies? Some proponents argue that digital technology is vital to a transition to a circular economy by enabling production that is highly resource- efficient, low-emission, low-waste and embedded in eco-industrial networks that are automated, decentralized, flexible, networked and intelligent. Long-lived products with entirely recyclable components would reduce both resource use and waste. This would enhance resource efficiency not only in production but also in supply chains, by radically enhancing transparency through tracking and control of entire value chains. Some proponents also argue that virtualization enabled by digital technologies will also dramatically shift fossil fuel and resource use.

In part, this depends on how these value chains shift geographically in the future; some argue that value chains will shorten and localize, thanks to the emergence of open-source business models in design and manufacturing, linked to networked micro-factories -- "fab labs" and makerspaces equipped with machines (like 3D printers and computer numerical control [CNC] machines) that can generate prototypes and devices from digital software files. This could enable a "design global, manufacture local" trend, reducing the need for global transportation of manufactured goods; easy-to-transmit commodities (knowledge, design ideas) are transmitted globally, while heavy, expensive-to-transport commodities (machinery, building materials) are local and, ideally, shared, reused and recycled. In opposition to the large-scale digital agricultural model discussed above, farmware cooperatives like Farm Hack or L'Atelier Paysan (in France) support small-scale farming by sharing designs for open-source agricultural machines. The WikiHouse project shares designs of dwellings with minimal environmental impacts. RepRap shares open-source designs for 3D printers that self-replicate. Open Bionics produces open-source, low-cost designs for bionic and robotic devices.

Critics point out that the materials requirements of the digital economy have led to increasing volumes of hardware and infrastructure. Computing centers, servers and transmission networks offer one obvious example of where this has been the case. As computing devices proliferate and become ubiquitous (e.g., wearables or smart textiles woven into clothing) these demands will continue to increase. The rapid rate of innovation makes it difficult to predict whether and when this will shift to reusable products and/or renewable inputs, but short-term trends do not seem positive for the environment. Most forecasts suggest increased use of metals, rare earth minerals, plastics and glass; amounts of e-waste are also expected to rise substantially in the next few decades, largely due to growing digitalization of industrial production and consumer goods. Will Digital Earth monitoring add to the tsunami of e-waste already being generated? Whether the digital optimization of industrial value chains can offset these increases remains to be seen.

Within this debate, issues of social justice often tend to be overlooked. The egregious human rights impacts of mining rare earth metals necessary for digital devices to function are, by now, well known. The energy transition from fossil fuels to renewables will create increased demands for minerals, which might create new economic opportunities but will also intensify risks of human and environmental rights, particularly in low-income countries. An estimated 40 million people worldwide are de facto modern slaves by force or by fraud, working in gold mines in Ghana, graphite mines in China, granite quarries in India and logging in the Amazon. As Benjamin Sovacool puts it, the use of forced labor and sometimes child labor in artisanal mines, notably in Africa, amounts to "subterranean slavery" supporting the sustainability transition. This forced labor, mostly in the world's poorest countries, provides a hidden subsidy to users of digital devices. Protests by local communities over the expropriation of land, inadequate compensation, and the health and ecological effects of mining are often met with violence, which in some regions -- particularly in sub-Saharan Africa -- is sometimes state-sponsored. The Digital Earth agenda rests on an often hidden foundation of environmental degradation, human rights abuse and socioeconomic injustice. Western science and industrialized moderns often choose to forget where raw materials come from, a collective amnesia about the dirty side of the cleantech revolution.

Guilliean Pacheco is an associate site editor for TechTarget Editorial's CIO, ERP and Sustainability and ESG sites. Guilliean graduated from the University of San Francisco with an MFA in Writing.

About the author

Karen Bakker was a Guggenheim Fellow, a professor at the University of British Columbia and the Matina S. Horner Distinguished Visiting Professor at the Radcliffe Institute for Advanced Study at Harvard University.