Climate change is a systems problem, but most approaches to addressing it—while often resulting in meaningful progress—have been insufficient to match the scale and urgency of the problem.
At the same time, the rise of the internet and digitalization has been a revolutionary driver of economy-wide systems change—transforming social relationships, global connectivity, science, communications, politics, and governance.
Digitalization has enormous potential to drive climate policy, accelerating change from the bottom up, with consumers playing a more significant role. A key area poised to benefit from digitalization is industrial decarbonization.
Industrial greenhouse gas emissions—specifically from energy-intensive commodities like chemicals, cement, iron and steel, and aluminum as well as the extraction, production, and refining of oil and natural gas—represent a significant climate policy challenge.
Direct industrial emissions represent 22% of greenhouse gas (GHG) emissions in the U.S. and 24% globally. Moreover, EPA data indicates that if both direct emissions and indirect emissions are taken into account, the industrial sector represents the largest source of U.S. emissions: 1,916 million metric tons or 29%. The Energy Information Administration has projected a 23% increase in industrial emissions by 2050, despite a projected flattening of emissions overall during that period.
Although technologies to help reduce industrial emissions are beginning to mature, there remains no clear and consistent way for the market to differentiate and value low-carbon industrial products compared to higher polluting alternatives.
This market challenge presents a new opportunity for industry and other climate stakeholders; the key to unlocking this opportunity will be Digital MRV.
Digitalization of measurement, reporting, and verification (Digital MRV) enables companies to quantify emissions and environmental attributes in ways that are more granular, more accurate, and more actionable. With Digital MRV, companies can securely collect, store, and share real-time environmental data, and in turn give consumers, investors, and governments a more complete, timely, credible, and trustworthy assessment of the climate impact of a product, facility, or company.
Digital MRV—combined with powerful analytical tools and emerging digital technologies like artificial intelligence (AI) and blockchain—can enable new standards to differentiate low-carbon industrial products, drive consumer demand, and incentivize industry to accelerate emissions reductions.
The Role of Digitalization in Driving Demand for Industrial Decarbonization
To learn more about the promise of Digital MRV, barriers to its adoption, and policy recommendations for new approaches to digital climate policy, download our white paper, The Role of Digitalization in Driving Demand for Industrial Decarbonization.