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The digitalisation, dematerialisation and decarbonisation of the global economy in historical perspective: the relationship between energy and information since 1850

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  • Fouquet, Roger

Abstract

To better understand the processes of digitalisation, dematerialisation and decarbonisation, this paper examines the relationship between energy and information for the global economy since 1850. It presents the long run trends in energy intensity and communication intensity, as a proxy for total information intensity. The evidence suggests that, relative to GDP, global economic production has been reducing energy and increasing information use since 1913. The analysis indicates that it initially required little information to replace energy in production and that the ability to substitute away from energy and towards information has been declining. The result implies that the global economy is now reducing energy and increasing information at a substitution rate of 0.2 kB per kWh of conserved energy or 0.8 GB per tonne of carbon dioxide mitigated. As the price ratio of energy to information is currently higher than this marginal rate of substitution, there are incentives to further substitute information for energy. However, one conclusion is that (without the long run escalation of carbon prices) substitution away from energy and towards information is likely to cease within the next few decades and, beyond that, digitalisation will play a declining role in the decarbonisation process.

Suggested Citation

  • Fouquet, Roger, 2024. "The digitalisation, dematerialisation and decarbonisation of the global economy in historical perspective: the relationship between energy and information since 1850," LSE Research Online Documents on Economics 121063, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:121063
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    File URL: http://eprints.lse.ac.uk/121063/
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    References listed on IDEAS

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    1. Jeremiah E. Dittmar, 2011. "Information Technology and Economic Change: The Impact of The Printing Press," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 126(3), pages 1133-1172.
    2. Lange, Steffen & Pohl, Johanna & Santarius, Tilman, 2020. "Digitalization and energy consumption. Does ICT reduce energy demand?," Ecological Economics, Elsevier, vol. 176(C).
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    1. Castro, Vitor & Georgiou, Marios & Jackson, Thomas & Hodgkinson, Ian R. & Jackson, Lisa & Lockwood, Steve, 2024. "Digital data demand and renewable energy limits: Forecasting the impacts on global electricity supply and sustainability," Energy Policy, Elsevier, vol. 195(C).

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    More about this item

    Keywords

    decarbonization; digitalization; energy intensity; global economy; historical; information and communication technologies (ICT); ES/R009708/1; EP/R035288/1; UKRI fund;
    All these keywords.

    JEL classification:

    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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