The Economics of Green IT

On 22 November 2010, ZEW held a workshop on “The Economics of Green IT”. The term “green IT” refers to energy-saving strategies in production and use of information technology as well as IT-based innovations which aim to reduce the energy consumption of other devices and production processes, improve power supply systems and make energy markets more efficient. While green IT has been widely debated in the industry, economic researchers are yet to develop a systematic research approach in this area. The goal of the workshop, therefore, was to encourage scientific debate over green IT in economics and other related disciplines. The workshop was organised jointly by the ZEW Research Departments “Information and Communication Technologies” and “Environmental and Resource Economics, Environmental Management”.

The keynote speaker at the workshop was Philippe Aghion from Harvard University, who used a theoretical model to explain how environmental policy should be optimised in order to deal with the coexistence of “clean” and environmentally harmful innovations. A subsidy for clean innovations would help to initiate a self-sustaining process of technological advancement in this area. A consumer tax on CO2 emissions should be also be introduced since present-day decision-makers have little consideration for the negative effects of climate change on future generations. The optimistic message from Aghion and his co-authors is that there is a plausible scenario in which catastrophic climate change can be prevented through the temporary deployment of the policies mentioned above. However, they also warn that delayed action will drastically reduce our room to manoeuvre.

In another lecture, Alistair Ulph (University of Manchester) analysed the problems that arise when governments are unable to definitively specify what future actions they will take in the area of environmental policy. Christian Helmers (University of Oxford) looked at the Patent Commons created by IBM, through which a number of large companies have made some of the “green” patents publicly available. The results of the empirical study on the possible motivation of these companies show that companies primarily contribute patents that are not related to their main area of business. Giovanni Marin (University of Ferrara) presented a study on the determinants of ecological innovation and the effect of IT investment on emissions. Shunsuke Managi (National Institute for Environmental Studies, Japan) discussed the effects of environmental regulation on research and development and technical advancement in the Japanese automotive industry. The study showed that stricter regulation stimulates investment in research and development. In two lectures on data centres, Ralph Hintemann (Borderstep Institute, Berlin) and Daniel Schlitt (OFFIS, Oldenburg) used innovative data calculations and model simulations to assess how much energy and materials are consumed by German data centres and to determine what measures could be introduced to encourage more efficient use of these resources.