The new decade in 3D – Digitalization, Decentralization & Decarbonization
“The best thing about the future is that it only comes one day at a time” (it’s claimed to be Lincoln who said that, but do we trust the internet sources?) Still, rather than coming one day at a time, it feels like this new decade is coming all at once to us, based on the number of different blog posts and writings from the first days of the 2020s. Experts, analysts, researchers, and consultants are all making predictions—some more normative than others— about what this new decade holds for us as a humankind, and what it does to our planet. Since stranger is often danger for us humans, what is good in these guestimates is that they make the Twenties a little bit more familiar and friendly.
As a sustainability researcher myself, I also see this staging post between the decades as a reminder of how far we’ve come in just 10 years, but amidst celebration as a reminder of the road ahead. In effect, the past 10 years were the hottest ever recorded in history, punctuated by a series of deadly, dramatic, and devastating events—the Australian wildfires being one of the most recent and tragic ones. However, this past decade also finally woke us up to seriousness of several sustainability crises around the globe. More people became aware, started to care, and most importantly, many more people started to take action.
Now, although making predictions based on the past is as useful as trying to solve an algebra equation by chewing bubble gum (i.e. not very useful), I decided to look back to certain emerging sustainability trends from the 2010s that can give us some informed ideas—or at least scientific wild-ass guesses (SWAGs)—on where to focus on in this brave, new decade. The decade we finally become sustainable as a species and as a society.
The new sustainable decade in 3D
3D usually makes things exciting and helps us to see them in a more holistic perspective, bringing different angles to light. It does this time too. There’s not much news that we are facing a profound transformation as a society with digitalization, but what might be more newsworthy is that the digital transformation will make two other transformations possible. The 2020 will be an era of 3Ds—digitalization, decentralization, and decarbonization—which are inextricably bound and inexorably important when it comes to sustainability transitions.
2D vs. 3D. Source: Catalyzing Change.com
Digitalization offers new venues for sustainable value creation, both for companies and consumers, by enabling new forms of data collection, analysis, and utilization. Many industries, such as banking, energy, insurance, retailing, telecommunications, and transportation are examples of industries that could—and increasingly do—convert vast amounts of customer data into meaningful information; such as consumers’ real-time energy consumption, CO2 emissions of their monthly transportation, or a nutritional balance of the food they buy. Customer data is thus turning into customer’s data when it’s converted into such information that benefits not only the company on a business level, but also consumers on an individual level, and societies on a collective level.
However, what can be used for good, can also be used for the exact opposite. In the area of social sustainability, many concerns have emerged where the data collected has been used for privacy exploiting purposes. This tells us how powerful the big data, and its innovative uses, can be. Let’s focus on using it for good.
Digitalization in 2020s: We will see more companies embracing digitalization and reconfiguring their role with the use of big data: they will no longer be only suppliers of goods or services but they also serve customers through their own data. Data from customer loyalty programs and point-of-sales becomes especially powerful when datasets from various domains, such as health services, CO2 trackers, ethics watchdogs, etc., are drawn together and provided to customers. This can have an impact on consumers’ much-needed behavior change—a key characteristic of information—and on companies market offerings—a key resource to make sustainability transitions happen.
Signs from the 2010s: Kesko, a major Finnish retailer, launched its carbon footprint calculator a little before the decade changed. The handy tool will show customers the carbon footprint of their food purchases from K Group’s grocery stores. This will help customers to track the environmental impact of their purchases, and to make more sustainable choices. The calculator is developed in collaboration with the Natural Resources Institute Finland (Luke).
In modern Western societies, most industries have developed based on centralized production, leaving a blatantly passive role for consumers. In a centralized system, too much power is in too few hands, which has rarely been a good thing in any sector or society. For now, this has meant that the industries we have relied on for vital services—like banking, medical care, retail, telecommunications, and transportation—have been a one-way flow from producers to consumers. Consider, for example, the producer-driven energy sector where consumers have had limited opportunities to participate in their own energy production and consumption in a meaningful way.
Decentralization in 2020s: we will see many of the afore-mentioned industries becoming a two-way flow. Digitalization, together with the rise of data availability and new technologies will transform these industries from centralized to decentralized systems and bridge the gap between producers and consumers. For modern, sustainability-oriented companies this means a closer collaboration with consumers to reconfigure practices that both speed up the phase-out of unsustainable offerings and support the usage of new, sustainable alternatives. For consumers, this means more control over their needs through more customization, flexibility, and convenience. It’s a win-win situation.
Signs from the 2010s: Companies offering small-scale decentralized energy technologies started to grow rapidly across continents. These decentralized technologies are not only democratizing the energy sector by distributing functions and powers, but they provide a range of other benefits, such as improved energy security and resiliency, use of renewables, energy cost savings, and sense of community spirit. To illustrate these systems with a simple example: if my neighbor needs extra electricity tonight when she’s baking for her son’s Birthday, she’s able to use the excess capacity from my solar panel batteries since I’m travelling, and we’re connected by a virtual power plant. Look for these companies that are leading the way for decentralized and sustainable energy solutions in the new decade.
As mentioned, decentralization will also transform other sectors than energy. Decentralization is turning consumers from passive users into active prosumers, who get a bigger role in the innovation activities of a given sector. Consider Tesla, for example, who involves both its potential and current customers in developing its market offering through effective feedback loops to speed up the transition to electric vehicles (EVs). How Tesla is reframing the entire car industry as a merger of transportation, digital technology, and energy is similar to what Apple did to communication with iPhones, but more profound.
Advances in digital and decentralized technologies are opening huge opportunities for decarbonizing the economy. Simply put, decarbonization means a decreasing relative reliance on carbon in powering our economy. That’s probably the only simple thing in decarbonization. To be clear, our current energy system still relies heavily on fossil fuels. Basically, it has relied on carbon since our ancestors invented wood fire somewhere in the south of France near Marseilles 750 000 years ago. Since those days the energy system has grown enormous, and carbon-intensive fossil fuels still provide over 80% of our primary energy.
Decarbonization in 2020s: decarbonization won’t be easy, but we will see a myriad of new technological and policy measures that will speed up the transition towards a low-greenhouse-gas-future. In most sectors, new sustainable solutions are built around technical innovations. In particular in the energy sector, technical innovations such as solar panels and next-generation batteries show significant potential in reducing fossil fuel dependency by providing clean and reliable electricity. To store that electricity, we need batteries that are less dependent on lithium, which is getting scarce, and cobalt, which is tied to many human rights abuses in the Democratic Republic of Congo. When these batteries are made with lower costs, they will also make the EVs and energy storage more affordable and attractive to more people.
Signs from the 2010’s:
Ursula von der Leyen, the new European Commission president, laid out the European Green Deal a bit before closing the decade. The Green Deal aims to make Europe the leader in decarbonization with a proposed target of net-zero carbon by 2050 and halving emissions by 2030. The EU will help its member countries in financing the transition to a low-carbon economy, with a potential carbon border tax for imports to the EU from countries with less-serious carbon targets of their own. In my honest opinion, for 2020s the most efficient strategy would put a price on all greenhouse gas emissions. The more you pollute, the more you pay. Everyone understands taxes, so why not to make decarbonization a bit more simple, while at the same time minimizing the bureaucracy, and making it fair?
Let’s use these 3Ds—digitalization, decentralization, and decarbonization—to make the new decade 2.0 2.0, and be proud when the future generations are talking about the Sustainable Twenties, knowing that they are talking about us.