The “green” economic miracle
Technologies increase our appetite for energy, but digitalisation also presents us with tremendous opportunities in terms of sustainability and climate protection. Entrepreneur, author and tech blogger Sascha Pallenberg talks about the opportunities that green IT offers us.
In the public perception, technology and sustainability are increasingly seen as belonging together. In EU circles, people speak of a “twin transition” – two issues that need to be transformed together and are mutually dependent. Are you of the same opinion?
There are definitely some overlaps. The basic principle of digital process optimisation is also aimed at enhancing sustainability – by boosting efficiency and optimising the use of energy sources, time, manpower and womanpower. The digital transformation seen over the past five or six years, especially in the corporate world, has been very much in the public eye. The notion of sustainability is basically centuries old and originates from the forestry sector. Nowadays, however, we are witnessing a new, strongly technology-driven context. In Germany, it began about 20 years ago with the so-called 100,000 Roofs Programme to subsidise solar power installations. We are currently seeing this phenomenon in the transformation of the automotive industry to electric mobility and we will also see it in the food industry. We are again developing a greater awareness for regionally produced foods. Circular systems, aquaponics and vertical farming are further trends, i.e. developments that would not have been sustainable without technologies such as LED lighting or renewable sources of energy. Technology is offering us the chance to drive forward a sustainable, digital transformation.
However, more technology or digitalisation does not automatically lead to more sustainability, if we look at the energy consumption of digital infrastructures such as server farms or cryptocurrency mining.
That’s right. The basic principle of digitalisation, however, is to optimise analogue processes to be energy-efficient and conserve resources. On the other hand, a lot of energy is used to manufacture microchips, for example, which also uses a great deal of water. That is how other resource dependencies are created. But in terms of energy input, this can be covered by renewable sources of energy. Here, too, the transformative process is in full swing. On good sunny or windy days, Germany is already capable of covering 30 to 40% of its energy needs with renewables. It is important to rely on several different sources of energy production and to consider technologies as part of the mix. It is far easier to establish a climate-neutral circular economy in the digital sector than with conventional analogue processes.
Taking the automotive industry as an example, is what the industry is doing on its own sufficient to make the switch to electric mobility? Or is more regulation required?
In certain aspects, the automotive industry is more progressive than many legislators. When I look at the roadmap of a manufacturer like Porsche, for example, the brand wants to be carbon-neutral across the entire value chain by 2030, but only on paper, as it will be difficult to make global supply chains climate-neutral down to the last detail. Daimler aims to be climate-neutral across the entire value chain by no later than 2039. However, we are talking about some 2,000 suppliers that are spread across the entire globe – a tremendous challenge. For that reason, the automotive industry is rightly exerting strong pressure on these supply chains. Achieving sustainability and climate neutrality within 10 to 15 years will safeguard the business for the future. The core target group will then consist of the generation that now takes to the streets every Friday to protest for climate protection.
And this target group will probably have a hard time getting enthusiastic about combustion engine-driven cars?
Exactly. Without sustainable, climate-neutral products, automotive manufacturers will no longer be able to compete in the market. The company’s strategists are also aware that driving bans for internal combustion vehicles are being discussed in some countries, and in some cases have even been imposed – for example in urban areas. With this strategy, London has managed to sensationally improve its emission and air pollution figures. One day, cars powered by conventional internal combustion engines will no longer be sold. The greatest challenge is the 1.4 billion vehicles of this type existing worldwide, which could continue to be used if they were powered by climate-neutrally produced e-fuels. At COP26, Mercedes-Benz was unfortunately the only company to sign a declaration of intent to phase out the internal combustion engine; the only German manufacturer to do so to date. Others will simply have to follow suit. Worldwide, the German automotive industry is leading by far in the transformation to e-mobility – in terms of both investments and models. There is a lot to do, but we are definitely on the right track.
Sustainable transformation has the potential to create a new economic miracle for Germany as a business location. We have both the engineers and the entrepreneurial spirit.
Which signals do policymakers need to send in terms of regulation? Take the carbon price for example.
For many years and across all climate protection packages, the automotive industry and its associations have become accustomed to far stricter measures and higher carbon pricing. The new German government is well advised to create incentives. Every year, billions of euros are paid to subsidise climate-damaging industries. It would be fair in future to redistribute the funds so that these companies pay into the subsidy pot in order to support climate-friendly companies. We need incentives to encourage those who take the path of transformation at an early stage and recognise that sustainability is profitable.
Despite all the apocalyptic future scenarios that are sometimes outlined, what would your positive future scenario be if technology and digitalisation were to interact in a sustainable manner?
We are in the middle of a climate crisis; we must not allow it to become a climate catastrophe. Although we should not be constantly conjuring up horror scenarios, we should not sweep anything under the carpet either. Just this summer in Germany we witnessed how the climate crisis can become a temporary catastrophe, what suffering it can bring with it and what immense damage it can cause. But if we imagine a future where we live in green cities with clean air and no loud noise, where our children play in the streets because public spaces have been reclaimed, where e-scooters, electric bikes and buses whizz past us quietly, where e-trucks, autonomous drones and robots deliver our goods, the very idea can change our state of mind. If we convert fallow land into virgin forests and increase biodiversity, if we optimise food cycles instead of throwing away 30–35% of our food, if we can grow more food on a regional basis, we will eat more healthily, be happier, healthier and have longer lives. If, in 10 years’ time, families in a village with 5,000 inhabitants 100 kilometres from Berlin can afford an energy-independent home with a garden without feeling cut off because they have a direct connection to the big city, then these are holistic approaches.
It is far easier to establish a climate-neutral circular economy in the digital sector than with conventional analogue processes.
Which steps do we need to take next?
We need to drive forward the energy transition, support the solar and wind power industries and produce hydrogen for our heavy industries using climate-neutral methods. We need to make the food industry climate-neutral as well as our own mobility needs. We also need to modernise our railway network in order to do so. Asian countries are way ahead of us in that respect. Germany’s new “traffic light” coalition has the opportunity to look at sustainability from various perspectives and reconcile interests. Sustainable transformation has the potential to create a new economic miracle for Germany as a business location. We have both the engineers and the entrepreneurial spirit. For the past 15 years, I have seen the good reputation that “Made in Germany” enjoys abroad. If the export nation Germany leads the way and drives change, it will inspire other countries to tread the same path.
The global lockdowns during the pandemic also had a positive impact on the climate. Greenhouse gas emissions decreased temporarily, partly because people were less mobile. As a digital nomad, you operate globally and travel a great deal. Has the pandemic changed your travel behaviour?
I have not been on a plane since the end of February 2020. I was able to manage everything digitally and remotely. I have known for a long time that it is possible, but I overestimated the value of physical events and underestimated remote collaborative formats. I think many people underestimate the digital options. I am now reducing my travel by 90%. In my view, living sustainably also means not consuming resources and energy in the first place and thinking in advance about whether I really have to do a certain thing or whether I can organise it digitally. My life has fundamentally changed in that respect.
Thank you for your time, Sascha.
Digitisation as the key to sustainability