Amid the ongoing and wall-to-wall coverage of the Covid-19 pandemic, you may have missed an important piece of news. An academic paper published last month by Australian climate scientist, Steven Sherwood and a team of global colleagues, is arguably one of the most important – and one of the most terrifying – pieces of climate change research to emerge in recent years.
The paper increases the estimate for the increase in world temperatures over the next century to between 2.5 and 4 degrees celsius. This is significantly above the 2 degree threshold enshrined in the Paris agreement, and is extremely bad news for the sustainability of our food production system.
As such, the paper has also brought renewed focus on ways to cut carbon emissions, and some analysts believe that big data is key in this effort. In this article, we’ll explore why.
Information and Efficiency
A link between big data and climate change has long been noted, but to date the use of big data in climate science has largely been limited to assessing the damage done by pollutants and greenhouse gases. As we’ve previously noted, big data coupled with advanced earth observation is one of the ways in which this is being implemented.
There is a growing consensus, however, that big data has the potential to make our economy more green in a more fundamental way.
The logic goes like this. Markets, in order to operate effectively, need as much information as possible about the products that are traded on them. At the moment, commodity production companies – whether they are drilling for oil or producing wheat – have vast amounts of information on the origins of their products, and how they were produced. Unfortunately, very little of this data is available to investors in these products, and still less to their final consumers.
By making the data available, we would allow investors and consumers to make better choices when it comes to investing in and purchasing goods. That, eventually, could mean greener products.
Tracking Petroleum
To take an example of how this would work, consider a tank of gas. The petroleum extraction industry is one of the most technologically advanced in our economy, and individual companies collect huge amounts of data on every barrel of gas that they extract and sell. At the moment, however, none of this data makes it to the stock market, where crude oil is bought and sold as generic, interchangeable barrels.
Gasoline refined from Oil Sands oil generates almost twice the level of greenhouse gas emissions as does North Sea oil. But at the moment, investors and consumers have no way of knowing that, and therefore no way of expressing a preference for the greener version. For companies, investors, and consumers who are increasingly basing their purchasing choices on the ecological impact of products, this is a huge problem.
The most frustrating element of this is that much of the data that would allow the market to make this kind of informed decision already exists, having been collected by vast IoT networks that cover almost every sector of our manufacturing and food production industries. It’s just that it never leaves the networks of the companies that collected it in the first place.
The Future is Now
There remain, of course, huge challenges in making these data available for consumers and investors. One is technological. Despite many food production companies possessing sophisticated IoT companies, it’s difficult to see how small-scale producers in developing countries can share this kind of data when only 58.8% of the world’s population has access to the internet.
That said, there are some companies already pioneering ways of leveraging big data in pursuit of greener markets. The carbon credit registries that have sprung up in the USA recently are a great example of this. The technologies being developed by Oxy Low Carbon ventures, which envisage a world where carbon credits are traded just as commodities are now, are another example.
In addition, there is a precedent for this kind of market-driven change in a major industry: the music business. Sales of CDs peaked in 1999, the same year that Napster started offering P2P downloads of MP3s. Critically, it was not just the lower cost of tracks from Napster that allowed it to start the digital music revolution: it was also the fact that consumers had far more information about the tracks and albums that they were downloading.
Instead of trading 500 barrels of crude, investors of the future could have access to extremely detailed information on where this oil was extracted from, and the ecological cost of this. For companies and investors looking to prove their green credentials, this could make all the difference.
Transparency and Profit
Of course, a cynical reader might note that it is not – at least currently – in the interests of huge manufacturing and mining companies to make the data they collect available to the public. Recording the true ecological cost of the way in which we produce food, for example, might make these companies fearful of a public backlash.
In reality, however, this is unlikely to make much of a difference, given the big data revolution that is now upon us. Investors are going to start to demand such data before too long since they know that companies already collect it. The first company to make it available could expect a significant boost to their public perception in doing so, but more importantly they would also be changing the world for the better.
About the Author
Bernard Brode has spent a lifetime delving into the inner workings of cryptography and now explores the confluence of nanotechnology, AI/ML, and cybersecurity.
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