Environmental Impacts of the Emerging Digital Economy: The E-for

You don't have the latest version of Adobe Flash Player.

Please update your flash player.

Please login or register to make a comment!

Environmental Impacts of the Emerging Digital Economy: The E-for-Environment E-Commerce? DANIEL Z. SUI* Department of Geography, Texas A&M University, College Station, TX 77843-3147 DAVID W.

REJESKI Woodrow Wilson Center, Washington, D.C. 20004-3027 ABSTRACT / The Internet-led digital economy is changing both the production and consumption patterns at the global scale. Although great potential exists to harness information technology in general and the Internet in particular and improve the environ- ment, possible negative impacts of e-commerce on the environ- ment should also be considered and dealt with.

In this forum, we discuss both the potential positive and negative impacts of e- commerce. Drawing from insights gained from the complexity theory, we also delineate some broad contours for environmental policies in the information age. Given the paradoxical nature of technological innovations, we want to caution the scienti>c com- munity and policymakers not to treat the Internet as the Holy Grail for environmental salvation.

New technologies affect the earth in its entirety. The more useful a technology is, the more unstablizing its effects can also be. John von Neumann This forum >rst reviews the recent development of the emerging digital economy and then summarizes and critiques the current discussions on the possible environmental impacts of e-commerce.

Thus ... more. less.

anchored in the basic principles of the complexity theory and non-linear dynamics, the paper also discusses possible environmental policy initiatives during the information age. The forum concludes by presenting a cautionary note on the potential positive impacts of technological innovations and the deeper cultural roots of environ- mental degradation caused by increasing consumption. The Emerging Digital Economy It is generally agreed among scholars and policy makers alike that the dazzling development of the In- ternet and its wide-range of applications during the past >ve years are going to change various facets of our society in very fundamental ways as we move into the 21st century (Castells, 1998). Among the many trans- formations the Internet brings to society, the most con- spicuous, and perhaps the most important, is the so- called emerging (indeed, e-merging) digital economy as evidenced by the growth of Internet-based businesses for the delivery of goods and services on a global scale. According to the two latest national studies released by the Department of Commerce, e-commerce is quickly becoming the engine for economic growth in the new millennium. This e-commerce-led growth could accel- erate in the coming years not only in the information technology (IT) sector itself, but across all sectors of the economy as the number of people connected to the Internet multiplies and as its commercial use grows (Margherio, 1997; Tapscott et al., 1998). The U.S. De- partment of Commerce (2000) reports that the per- centage of U.S. companies that sell their products over the Internet has jumped from 24% in 1998 to 56% by 2000. About $2.2 billion worth of business-to-consum- ers goods and services were sold over the Internet in 1997, and $5.3 billion for the fourth quarter of 1999 alone. By 2002, it is forecasted that online retail sales may reach $ 40 to 80 billion. However, business-to- consumer (B2C) transactions represent only 20% of the e-commerce, the remaining 80% is business-to-busi- ness (B2B) e-commerce. B2B transactions were $43 billion in 1998, expected to rise over to $1.3 trillion by 2003. There are currently 304 million Internet users world wide, up almost 80% from 1999. Also, for the >rst time the U.S. and Canada account for less than 50% of the global online population in fourth quarter of 1999. In the U.S., there are currently 30 million online house- holds, and by 2003, it is estimated that nearly 75% of American families (53 million) will be sur>ng the Net and buying products and services directly from the manufacturer or distributor. The amount of informa- tion available online has increased tenfold over the last three years, to more than one billion discrete pages. There is growing evidence that >rms are moving their supply networks and sales channels online and KEY WORDS: Digital economy; E-commerce; Environmental impacts; Environmental policies *Author to whom correspondence should be addressed; email: sui@geog.tamu.edu DOI: 10.1007/s00267-001-0027-X Environmental Management Vol. 29, No. 2, pp. 155 3163 © 2002 Springer-Verlag New York Inc. participating in new online marketplaces. Firms are also expanding their use of networked systems to im- prove internal business processes, such as coordinating product design, managing inventory, improving cus- tomer services, and reducing administrative and man- agerial costs. More and more B2B transactions are be- ing conducted online electronically as well. Intel 9 s Andy Grove even predicted c In > ve years 9 time, all companies will be Internet companies or they won 9 t be companies at all. d For the consumers, this means quick, unparal- leled access to goods and services at a global scale with only the click of a mouse. For example, Buyer 9 s Index alone provides a search engine to over 20,000 compa- nies with 300 million products (www.buyersindex.com). Indeed, the Internet is quickly becoming the modern Agora freed from the limitations of space and time. Business-to-consumer (B2C) transactions can also ex- pect to grow exponentially in the years ahead. We are possibly witnessing the emergence of a friction-free capitalism where businesses can be conducted at the speed of thought as Bill Gates (1995; 1999) predicted. E-Commerce and the Environment Historically, major technological innovations have not only brought fundamental change to the economic system but also far-reaching environmental impacts, for better or worse. Our ecological footprints on the envi- ronment are, in most cases, a re ? ection of human economic activities as mediated by technology (Mum- ford 1934, Landes 1969, Headrick 1990, Rees 1992, Bowers 2000). During the past 8000 years, as human society evolved from hunting and gathering to agricul- ture, and especially since the beginning of the indus- trial age in the late eighteenth century, we have increas- ingly transformed the earth 9 s surface and caused our fragile environment to deteriorate at an increasingly rapid rate. In fact, contemporary environmental prob- lems can be traced to the sudden acceleration in the rate and power of technological innovations. Now the information age is here. Many business leaders and scholars contend that sustainable development hinges on the further development of knowledge-based indus- try and deployment of innovative technologies, espe- cially the Internet-led information technologies (Aus- ubel and Sladovich 1989, Ausubel and Langford 1997, Billates and Basaly 1997). Can the information technol- ogies serve as one of the most important means to improve the environment? Do demands for the devel- opment of a sustainable economy compete or coincide with the new reality of the digital economy? Is e-com- merce a truly clean, environmentally benign economy, which will simply lead to the substitution of information for physical resource ? ows along energy and transpor- tation networks? Or alternatively, does e-commerce en- courage more movement by generating new demands for material and energy that will further deteriorate the fragile environment? What kind of environmental pol- icies should we develop in the Internet-led information age? These questions pose some daunting challenges for both scientists and policymakers. The few reports avail- able in the literature on this topic are anecdotal, spec- ulative, and inconclusive (Rejeski 1999, Colien 1999, Brynjoolfsson and Smith 1999, Romm 2000, Caudill and others 2000). As of today, the scienti > c community still does not have any de > nitive statements on the relationship between the Internet and the environ- ment. Obviously, the emerging digital economy in prin- ciple has great potentials for positive environmental impacts, which have been generally summarized as the three D 9 s for the new economy: dematerialization, de- carbonization, and demobilization. The argument is that by moving businesses online and marketing by pixels instead of packages, e-commerce can reduce the need for such wasteful products as printed catalogues, telephone books, newspapers, and magazines. The re- cent shifts, from books to bytes, from compact discs to MP3s, from snapshots to JPEGs, from checkbooks to clicks, are all seen as examples of this dematerialization process in which electrons are substituting for atoms, consequently leading to a putative reduction of mate- rial consumption. E-commerce also encourages mass customization via the modes of c just-in-time, d c just- enough, d and c just-for-you d manufacturing and market- ing technologies, all of which can potentially reduce waste and the need for inventory and warehouse space. In addition, the growth of teleshopping can supposedly reduce the number of shopping centers and their inef- > cient use of land 4 what Nevin Cohen (1999) called c the de-malling of America. d E-commerce has also been alleged to prevent waste by vastly increasing the ef > - ciency of the market for secondary (reused and recy- cled) materials through online auctioning on a global scale. Some researchers even argue that the decline of energy intensity in the U.S. economy over the past ten years can be attributed in part to the growing e-com- merce and IT sectors. Furthermore, according to Romm et al. (2000), the decreasing energy consump- tion would mean the reduction of the greenhouse gas (GHG) emissions and thus make the goals of Kyoto Protocol (the reduction of GHG by 7% of the 1990 levels between 2008 3 2012) easier to accomplish. The Internet has also turned many homes into of > ces and virtual shopping malls (Nilles 1998), and the continu- ing growth of telecommuting and teleshopping entails 156 D. Z. Sui and D. W. Rejeski the potential reduction, in some cases even elimina- tion, of certain to work and to shop trips 4 demobiliza- tion 4 which in turn may reduce fuel consumption and conserve energy. However, a closer look at the environmental impacts of the Internet quickly reveals that the potential posi- tive impacts are only one side of the story. Although the potentials of the Internet to save material and energy cannot be denied, it is nonetheless too early to paint a rosy picture for the environmental impacts of the emerging digital economy. We do not believe that our society has quite reached the stage where our science and technology are ready to reconcile our economy and environment to effect the Copernican turn char- acterized by a hydrogen fuel economy, landless agricul- ture, and an industrial ecosystem in which waste virtu- ally disappears. To the contrary, each potential positive impact is coupled with a potentially overwhelming neg- ative impact as well. For example, moving business online can reduce waste such as printed catalogues, retail space, and transportation requirements, but we have to manufacture more energy intensive computers instead! There are already 50 million personal comput- ers in U.S. households, another 150 million in busi- nesses, and 36 million more are being sold every year (Mills 1999). The $50 billion per year semiconductor industry is the nation 9 s largest manufacturing sector, having surpassed the auto parts sector in 1995. In the not-so-distant future, there will be one billion PCs glo- bally on the Internet, which means not only a massive amount of material will be consumed to produce these computers, but also a global demand for kilowatt-hours equal to the entire current output of the U.S. electric grid. Preliminary calculations reveal that the appetite for electricity to drive the Internet has grown from essentially nothing ten years ago to 8% of the total U.S. electricity consumption (Mills 1998). Mills (1998) even projected that the Internet is responsible for one-half to two-thirds of all growth in the U.S. electricity de- mand in the last decade. For every 2000 kilobytes of data moving on the Internet, the amount of energy obtained from burning a pound of coal is needed to create the necessary kilowatt-hours (Mills 1998). Al- though Mills 9 prediction has been contested by some researchers (Koomey and others 2000), we cannot af- ford to ignore the basic fact that energy consumption will continue to increase. In addition, web-based mar- keting may encourage pro ? igate rather than savvy con- sumption. Indeed, the Internet has already dramati- cally increased mass production on a global scale. The ease of pointing and clicking itself causes people to buy more. A German study found that customers at online bookstores are spending about twice the average amount they spent in conventional bookstores (Rejeski 1999). The material savings (dematerialization) caused by the substitution of atoms with electrons could po- tentially be offset by conspicuous consumption in de- veloped countries and the population increase in de- veloping countries as well (Gardner and Sampat 1998). In terms of energy consumption, just-in-time (JIT) delivery tends to create a situation in which trucks are moving half empty. E-commerce also tends to favor faster transportation modes, which can increase fuel consumption exponentially. When we opt for trucks instead of boats or rail, energy use goes up by a factor of four to > ve (from 400 500 BTUS per ton-mile to over 2000). Moving the same package by airfreight again increases the energy use dramatically (to over 14,000 BTUs per ton-mile). One company, Patagonia, calculated that the energy cost rose from 6% to 28% when shifting the modes of shipments from ground to air. The growth of e-commerce has further stimulated the expansion of the overnight delivery business. Fed- eral Express handles one million packages on an aver- age day at its Memphis hub alone. The amount of energy used to transport freight in the U.S. has in- creased steadily since 1984. It now exceeds > ve quadril- lion BTUS (Rejeski 1999), enough energy to run the entire British economy for six months. Some of this increase in transport energy consumption can be attrib- uted to the growth in e-commerce as it tends to encour- age the consumer preferences to more energy-con- sumptive, faster deliveries. It is very likely that the increase in transport energy consumption may offset the energy savings from consumers traveling less to local stores unless e-commerce is seamlessly integrated with both B2B and B2C operations. Indeed, it is still an overwhelming challenge to further improve the U.S. 9 s energy ef > ciency (Casten and Pena 1998). As for demobilization, the current > ndings about telecommuting are perplexing. At the level of individ- ual home-based telecommuters, numerous emperical studies have found statistically signi > cant reductions in the number of vehicle trips, basically due to the elimi- nation of the commute (though not for everyone nor on every telecommuting day). Hypothesized increases in non-commute trips have not been found to a statis- tically signi > cant degree, or to a degree that completely counteracts the savings (Mokhtarian and others 1995). For center-based telecommuters, frequencies of trips are not reduced at all. Center-based telecommuters still make the commute (albeit a shorter one), and some- times two (home for lunch and back in the afternoon), on the days that they telecommute. New advances in telecommunications seem to complement traditional modes of transportation rather than substituting for Environmental Impact of E-Commerce 157 them. Studies in both North America and Europe have found that heavy users of information technology travel about the same amount overall as an otherwise similar, but non-heavy information technology-using group, al- though IT professionals did considerably more work- related traveling. Thus, appears unlikely that telecom- munications will noticeably reduce travel at the system level (Mokhtarian 1998). Ample evidence shows that c The aggregate impact will remain relatively ? at into the future, even if the amount of telecommuting in- creases considerably d (Mokhtarian and Meenakshis- undaram 1999, see page 33). Contrary to the demobi- lization hypothesis, no strong support exists for drastic, or even smaller, reduction of travel attributed to tele- commuting because of the small number of telecom- muters and their low telecommute frequency. In fact, the automobile is still a major source of a variety of mobile pollutants such as sulfur dioxide, nitrogen ox- ide, carbon monoxide, and carbon dioxide, especially from those fuel-hungry sports utility vehicles and pickup trucks. E-commerce also allows physical spaces and ? ows to be recon > gured and reconstituted, thus generating new forms of environmental problems through dispersal of land uses, along with concomitant generation and enhancement of new travels. Newly released data on the of > ce space vacancy rate in major U.S. cities has indicated that there has been growing demand for of > ce spaces during the past > ve years (BOMA 2000). So far, telecommuting has not reduced demands for of > ce spaces either. Obviously, the Internet economy is a double-edged sword. Despite the growing literature on the three D 9 s, our knowledge of the extent of, and mechanisms be- hind, the patterns of material use and energy consump- tion are very limited. The weight-based material inten- sity of the economy may be falling, but it is unclear at this point what, if any, economic and environmental signi > cance that trend may have. Despite growing claims to the contrary, there is no compelling macro- economic evidence that the U.S. economy is decou- pling from material and energy input (Cleveland and Ruth 1999). We know even less about the environmen- tal impacts of many changes in material use than the possible changes in energy uses. The aggregate signi > - cance of the dematerialization, decarbonization, and demobilization trend is unknown. We concur with Cleveland and Ruth (1999) that any generalizations about material use and energy conservation attributed to technological innovation should be viewed with sus- picion. What we believe has been under-appreciated so far are the so-called rebound effects (Ashton and Laura 1997) 4 or unintended consequences, according to re- venge theory (Tenner 1996) 4 to especially macro ef- fects from micro advances. In general, increased eco- nomic productivity (less resources being used per unit quality of life) at the micro-level has translated in the past into increases in economic activity, rather than increased environmental ef > ciency at the macroeco- nomic level (Allenby 1999). Because of rebound ef- fects, the overall bene > t in material and energy con- sumption caused by technological innovations will probably be much less than bottom-up microeconomic analysis indicates. For example, while the paperless of > ce was predicted at the dawn of the computer age in the 1970s, paper consumption in the U.S. increased by 33% between 1986 and 1999, and even with the increas- ing computerization in various facets of society, paper consumption continues to rise both on a per capita basis and in the absolute amount at the global level (Abramovitz and Mattoon 1999). Perhaps the biggest irony is in the Bay area around San Francisco, the most wired region in the world. Traf > c jams and environ- mental burdens there are no less than in other areas (SVTC 2000). Silicon Valley also has more superfund sites than any other county in the U.S., 80% of which are due to electronics and chip manufacturing (SVTC 2000). Energy consumption in Silicon Valley is by no means less or more ef > cient than in other regions in the U.S. So, with both the negative and positive environmen- tal impacts of the Internet considered, what are the combined net effects of the digital economy on the environment? The honest answer is that we don 9 t know, and worse, that such impacts may not be knowable in the conventional sense because many aspects of the environmental impacts of digital economy defy quanti- > cation. Furthermore, according to Nicholas Geor- gescu-Roegen 9 s groundbreaking work on the law of entropy and economic processes (Georgescu-Roegen 1971, 1976, Mayumi and Gowdy 1999), economic activ- ity, as an extension of human biological evolution, is essentially an entropic process that unidirectionally dis- sipates material and energy as long as economic activity exists. In the information age, the information ? ows in the e-commerce should be viewed as an integral part of the global economy. We cannot obtain, transmit, or even keep in store information of any kind without an increase in the total entropy of the isolated system in which we act. In other words, the law of entropy points to the inevitability of environmental degradation, no matter how sophisticated our technologies are. Thus, we want to caution the scienti > c community and policy makers that the current pervasive optimism about the positive impacts of the digital economy is unwarranted at best and, worse, utopian by its nature. As of today, 158 D. Z. Sui and D. W. Rejeski evidence exists to show both potential positive and negative environmental impacts of the digital economy. The net environmental impacts of the emerging digital economy are too uncertain to paint a clear picture at this point. Environmental Policies in the Digital Age Obviously, the Internet is a game-changing technol- ogy for environmental policies. Environmental policy- makers so far have entered this fast-paced world of disciplinary collisions and shifting technological land- scapes with some heavy handicaps. Among the growing literature on Internet policies (NCGEC 1997, Litan and Niskanen 1998, Simon 2000), few have discussed the environmental aspects of the Internet. In addition to the aforementioned daunting complexities and uncer- tainties, we must realize that optimizing the environ- mental performance of an economy driven by informa- tion and knowledge creation is different from regulating one based largely on the processing of ma- terial. Many of our environmental policy tools are sim- ply too blunt and reactive to steer technological and social innovation in an information economy in which traditional notions of borders, distance, jurisdiction, and time have been altered in very fundamental ways. Environmental policies have so far worked well by fo- cusing on manufacturing rather than services; on tech- nology and regulation rather than information and knowledge; on the details of the law rather than the dynamics of the system. Conventional policy initiatives were criticized for placing members of society at one end of a linear equilibrium, a cause-and-effect chain, as passive receptors of environmental risk. Environmental policies so far have focused on industry as the source of pollution with little or, in most cases, no attention to consumption. Although problems of production may tend to be industrial and local problems of consump- tion will tend to be problems for everyone at an increas- ingly global scale. Whereas residuals tend to disappear from the market domain, where everything has a price, they do not disappear from the natural world in which the economic system is embedded. Admittedly, the environmental impacts of the Inter- net cannot be placed into a simple linear law taking the form of a statement with a single cause and a conse- quent effect. The de > ning characteristics of this new digital economy challenge much of the conventional wisdom in economics and policy science. Instead, we believe that insights gained from extensive research on non linear dynamics and complexity during the late twentieth century can help illuminate the convoluted relationship between the Internet and environment. Complexity theory portrays the economy not as de- terministic, predictable, and mechanistic, but as pro- cess dependent, organic, and always evolving (Arthur and others 1997, Kelly 1998). The new Internet-led economy affects, and is affected by multiple social, economic, and cultural factors. The digital economy is obviously out of equilibrium; in most cases it is a far- from-equilibrium system 4 ever-changing, showing per- petually novel behavior and emergent phenomena. So far the development of the emerging digital economy seems to resonate with the insights obtained from com- plexity theory, which entails uncertainty, unpredictabil- ity, path dependence, and non-linear dynamics. Fur- thermore, complex systems can be quite sensitive to even very small changes so that a minor mistake or malfunction can snowball into a major accident (Arthur 1994), as demonstrated by a college student in Philippines who sent the c ILoveYou d virus that shocked the system at the global scale. The emerging digital economy is not only exceed- ingly complex, but also the pieces of it are highly interdependent, which tends to cause system effects, both good and bad, to multiply rapidly in unpredict- able ways. Viewed from the perspective of non-linear dynamics, environmental effects could be much larger than anticipated and unpredictable. The behavior of the economic system as mediated by technologies is non-linear, and is characterized by random interac- tions, complex feedback loops, discontinuities, and trends that are not fully foreseeable. Indeed, complex- ity creates uncertainty, and uncertainty calls for human judgment. Society 9 s current relationship with the Inter- net is best described as a blind date. Whether this blind date will evolve into romance or turn sour remains to be seen. We obviously need to keep a vigilant eye on possible consequences. If we accept the premise that the digital economy is a complex system and that the relationship between the Internet and the environment is best captured from the theory of complexity, this will have serious policy impli- cations (Elliott and Kiel 1999). The common > nding in the study of non-linear dynamics is that economic struc- tures can crystallize around small events and that lock-in is beginning to change policy in all of these areas toward an awareness that government should avoid both the extremes of coercing a desired outcome and keeping a strict hands-off approach. Instead, gov- ernment should seek to push the system gently toward favored structures that can grow and emerge naturally. In Brian Arthur 9 s words, government should exercise not a heavy hand, not an invisible hand, but a nudging (massaging) hand (Arthur 1999). We believe that this is the only viable policy guideline for the Internet and the Environmental Impact of E-Commerce 159 environment. Insights gained from non-linear dynam- ics also tell us that policies are more successful when they attempt to in ? uence the market-driven process of formation of economic structures instead of forcing static outcomes. The new digital reality also demands ? exibility, adaptation, and coevolution for any new en- vironmental policy initiatives that we may come up with. In lieu of the insights gained from complexity the- ory, macro-level patterns of adaptation have possible deterministic effects at the micro-level, both in society and the environment, and the best opportunities for change in those patterns actually arise during the course of micro-level intervention. Thus, the most sen- sible environmental policy in the information age, in our opinion, is to nurture a long sequence of small, corrective decisions via an intelligent exercise of day- to-day judgment. We would like to call for a fundamen- tal paradigm shift from a top-down regulatory to a bottom-up participatory policy, which aims to raise the environmental consciousness of both the individual and business. New environmental policies in the infor- mation age should shift from regulating materials to regulating demands and supplies, from a predominant focus on production to more emphasis on consump- tion, and from controlling materials to disseminating information. We must balance our pursuit of techno- logical opportunities for ameliorating environmental conditions with a soul-searching re-evaluation of our fundamental cultural value systems. Sustainable devel- opment requires at the micro level that individuals internalize awareness that they play an active role in the creation of pollution and other environmental changes. Working with such complex, rapidly evolving tech- nologies poses new challenges for industries as well as consumers. Concerns for pro > ts rather than for a bet- ter environment are usually the driving force for the development of electronic commerce in the private sector and all business generally. Most companies have little interest in exploring the negative environmental impacts of e-commerce in spite of fact that both their companies and the environment would bene > t from running a more environmentally conscious business (NAE 1994, Abe and others 1998, Nattrass and others 1999, Romm 1999, Hawken and others 1999). Identi > - cation of the things e-commerce > rms can or should do to increase their performance and relying on market forces to encourage them to do it has proved sensible (O 9 Meara 2000). For example, an c environmentally conscious d retailer can put a note on their ordering screen that using surface freight, rather than air freight, will save about 90% of the energy costs associated with long-distance transport at a slight delay in delivery and then let the customer choose. The Internet can also empower consumers to identify 4 demand 4 products that are less toxic, more energy ef > cient, and longer lasting, by adding information to products about envi- ronment ef > ciency. The Internet can be used to ex- change information, such as the International Stan- dards Organization (ISO) 14000, and to track environmental impacts throughout the production life- cycle and beyond. Eco-friendly bots can be developed to search the global market place for the best combi- nation of price and environmental attributes for any given product or service, such as clothing with organic cotton, eco-tourism packages, recycle-content products, veri > ed carbon credits, or the lowest priced mid-sized sedan with the best gas mileage and lowest emissions. The list goes on and on (NRC 1997, Brower and Leon 1999). The E-for-the-Environment E-commerce? In their recent book The Social Life of Information , Xerox chief scientist-John Seely Brown and historian Paul Duguid (Brown and Duguid 2000) pointed out that one of the greatest traps in assessing the impact of information technologies is assuming that they will take us from one, to two, to a million, in terms of their bene > ts. What stands between us and the imagined bene > ts are people, and their behavior, phenomena much harder to predict than the energy consumption of Internet servers or pollutants from airplanes moving packages around the globe. In the end, people matter, and when we leave people out, our technological aspi- rations often fall prey to the mundane forces that shape our everyday lives. Environmental problems at their very root are the consequences of large-scale cultural patterns, the summed effects of millions of people making individual decisions 4 the tyranny of small decisions that eventu- ally leads to the tragedy of the commons (Khan 1966, Durning 1992, Lebergott 1993). The new economy may contain fewer warehouses or manufacturing plants, but it will not contain fewer people, especially in the United States, which has one of the highest population growth rates of any developed nation. In an event that received no signi > cant media coverage, the U.S. Census Bureau released new projections for the U.S. population this past January (see http://www.census.gov for details). The conservative projection shows that the U.S. could grow from its present 276 million people to over 400 million by 2050, or put differently, continue the exist- ing trend of adding 45,000 to 50,000 new people per week, or about 25 million every decade into the fore- 160 D. Z. Sui and D. W. Rejeski seeable future. So we can assume that the new economy will be more populated than ever by that capricious and voracious species Homo consumptus , a species that is rapidly replacing Homo sapiens throughout most of the developing world. Let us add to this picture the esti- mated $200 billion spent in the U.S. every year on advertising, much of it designed to drive growing num- bers of new economy consumers directly into the hands of retailers 4 both online and at the mall. The Internet is obviously playing an increasingly integral role in both production and consumption. In fact, the Internet is becoming the largest advertising machine for goods and services targeted for every conceivable human de- sire and need. Further production and consumption always entail more material and energy usage, which are often translated into environmental degradation. Admittedly, the future is not a blank page, but nei- ther is it an open book. Trying to assess the true im- portance and function of the Internet now is like asking the Wright brothers at Kitty Hawk if they were aware of the potential of American Airlines Advantage miles. What we do know for sure is if together with the bio- technologies, information technology will rede > ne who we are, what kind of society we will create, or if it will alter the meaning of human existence. The environ- mental impacts created by the digital economy, both positive and negative, will also be enormous. Given the paradoxical nature of technological innovations, we want to caution the scienti > c community and the poli- cy-makers to treat the Internet as the Holy Grail for environmental salvation. In an insightful but under-appreciated essay, c Can We Survive Technology, d the founding father of mod- ern computer science and technology John von Neu- mann (1955) forcefully argued that technological power and ef > ciency is an ambivalent achievement. Its danger is intrinsic. Technological transformations are not a priori predictable, and most contemporary c> rst guesses d concerning them are often wrong. New tech- nologies tend to create new demands for Lebensraum: an ever-broader geographical scope for technological activities, combined with an ever-broader political inte- gration of the world. The crisis does not arise from accidental human errors. It is inherent in the technol- ogy 9 s relation to geography, on the one hand, and to political organization, on the other, what von Neumaan terms the maturing crisis of technology. Von Neumann further argues that looking at the facts about the effects of technological progress is not suf > cient. We must engage in some speculation. At this time, the scienti > c community must ask: can we survive the Internet? Acknowledgments This research was partially supported by the U.S. EPA 9 s FUTURE program (contract 99-32525) and NSF 9 s Tech- nology for Sustainable Environment (TSE) (project 99- 10243). The opinions expressed in this article do not necessarily re ? ect those of the funding agencies. We wouldliketothank(withoutimplicating)PatMokhtarian, Tom Meyer, Peter Hugill, Jonathan Smith, Igor Vojnovic, Chris Cohen, Matt Reinert, John Waldron, and Marceia Lathou for their comments on an earlier draft. Literature Cited Abe, J. M., D. A. Bassett and P. E. Dempsey. 1998. Business ecology: giving your organization the natural edge. Butter- worth-Heinemann, Berlin, 208 pp. Abramovitz, J. N. and A. T. Mattoon. 1999. Paper cuts: Recov- ering the paper landscape. Worldwatch Paper 149. World- watch Institute, Washington D.C., 71 pp. Allenby, B. 1999. E-for-Environment Commerce. Green Busi- ness Letter (Available online at: http://www.att.com/ehs/ brad/articles/index.html) Arthur, W. B. 1994. Increasing returns and path dependence in the economy. University of Michigan Press, Ann Arbor, 201 pp. Arthur, W. B. 1999. Complexity and the economy. Science 284:107 3 109. Arthur, W. B., S. N. Durlauf and D. A. Lane (eds.). 1997. The economy as an evolving complex system II. Addison-Wesley, Reading, MA, 583 pp. Ashton, J. and R. S. Laura. 1997. Perils of progress: the health and environment hazards of modern technology and what you can do about them. New South Wales University Press, Sydney, 346 pp. Ausubel, H. and Langford, H. D. (eds.), 1997. Technological trajectories and the human environment. National Acad- emy Press, Washington D.C., 214 pp. Ausubel, J. and H. E. Sladovich (eds.). 1989. Technology and the environment. National Academy Press, Washington, D.C., 221 pp. Billatos, S. B. and N. A. Basaly. 1997. Green technology and design for the environment. Taylor & Francis, London, 221 pp. Bowers, C. A. 2000. Let them eat data: how computers affect education, cultural diversity, and the prospects of ecological sustainability. University of Georgia Press, Athens, GA, 224 pp. Brower, M. and W. Leon. 1999. The consumers guide to effective environmental choices. Three Rivers Press, New York, 156 pp. Brown, J. S. and P. Duguid. 2000. The social life of informa- tion. Harvard Business School Press, Cambridge, 336 pp. Brynjolfsson, E. and Smith, M. D. 1999. Frictionless com- merce: a comparison of Internet and conventional retailers. MIT Sloan School of Management, Cambridge. (Available online at : http://e-commerce.mit.edu/papers/friction) Building Owner and Manager Association (BOMA). 2000. Environmental Impact of E-Commerce 161 BOMA 9 s 2000 experience exchange report: the of > ce build- ing performance benchmark. (Available online at http:// www.boma.org) Castells, M. 1998. The information age: Economy, society, and culture. Blackwell, Oxford, 556 pp. Casten, T. R. and F. Pena. 1998. Turning off the heat: why America must double energy ef > ciency to save money and reduceglobalwarming.PrometheusBooks,NewYork,269pp. Caudill, R. J., Y. C. Luo, P. Wirojanagud, and M. C. Zhou. 2000. Exploring the environmental impact of e-commerce on electronic products: an application of fuzzy decision theory and lifecycle studies. (Available online at: http:// merc.njit.edu/html/egg.pdf) Cleveland, C. J. and M. Ruth. 1999. Indicators of dematerial- ization and the materials intensity of use. Industrial Ecology 2(3):15 3 50 Cohen, N. 1999. Greening the Internet: ten ways e-commerce could affect the environment and what we can do. Informa- tion Impact Magazine , October (Available online at: http:// www.cisp.org/imp/october_99/10_99cohen.htm) Durning, A. 1992. How much is enough? The consumer soci- ety and the future of the earth. W. W. Norton, New York, 200 pp. Elliott, E. and L. D. Kiel. 1999. Nonlinear dynamics, complex- ity and public policy. Nova Science Publishers, Commack, NY, 200 pp. Gardner, G. and P. Sampat. 1998. Mind over matter. World- watch Paper 144. Worldwatch Institute, Washington D.C., 60 pp. Gates, B. 1995. The road ahead. Viking, New York, 286 pp. Gates, B. 1999. Business @ the speed of thought: using a digital nervous system. Warner Books, New York, 470 pp. Georgescu-Roegen, N. 1971. The entropy law and the economic process. Harvard University Press, Cambridge, 457 pp. Georgescu-Roegen, N. 1976. Energy and economic myths: institutional and analytical economic essays. Pergamon Press, New York, 380 pp. Hawken, P., A. Lovins, and L. H. Lovins. 1999. Natural capi- talism: creating the next industrial revolution. Little, Brown, Boston, 396 pp. Headrick, D. R. 1990. Technological change. Pages 55 3 68 in B. L. Turner II and others (eds.) The earth as transformed by human action. Cambridge University Press, Cambridge, 713 pp. Kahn, A. E. 1966. The tyranny of small decisions: market failures, imperfections and the limits of economics. Kyklos 19(1):23 3 47 Kelly, K. 1998. New rules for the new economy. Viking Pen- guin, New York, 179 pp. Koomey, J., K. Kawamoto, M. Piette, R. Brown and B. Nord- man. 1999. Initial comments on The Internet Begins with Coal . Lawrence Berkeley National Laboratory, Berkeley, (Avail- able online at: http://enduse.lbl.gov/Projects/infotech. html) Landes, D. S. 1969. The unbound Prometheus: technological change and industrial development in western Europe from 1750 to the present. Cambridge University Press, Cam- bridge, 566 pp. Lebergott, S. 1993. Pursuing happiness: American consumers in the twentieth century. Princeton University Press, Prince- ton, 188 pp. Litan, R. E. and W. A. Niskanen. 1998. Going digital: a guide to policy in the digital age. Brookings Institutions, Wash- ington, D.C., 91 pp. Margherio, L. 1997. The emerging digital economy. Washing- ton, D.C. (Available online at: http://www.ecommerce.gov) Mayumi, K. and J. M. Gowdy. 1999. Bionomics and sustain- ability: essays in honor of Nicholas Georgescu-Roegen. Ed- ward Elgar, Cheltenham, U.K., 417 pp. Mills, M. P. 1999. The Internet begins with coal: a preliminary exploration of the impact of the Internet on electricity consumption. The Greening Earth Society, Arlington, VA (Available online at: http://www.fossilfuels.org) Mokhtarian, P. L. 1998. A synthetic approach to estimating the impacts of telcommuting on travel. Urban Studies 35(2) 215 3 241 Mokhtarian, P. L. and R. Meenakshisundaram. 1999. Beyond tele-substitution: disaggregate longitudinal structural equa- tions modeling of communication impacts. Transportation Research 7, 33 3 52 Mokhtarian, P. L., S. L. Handy and I. Salomon. 1995. Moth- odological issues in the estimation of travel, energy, and air quality impacts of telcommuting. Transportation Research A 29(4): 283 3 302 Mumford, L. 1934. Technics and civilization. Havcourt Brace, New York, 495 pp. National Academy of Engineering (NAE). 1994. Corporate environmental practices: climbing the learning curve. Na- tional Academy Press, Washington, D.C., 196 pp. National Committee on Global Electronic Commerce (NCGEC). 1997. A framework for the global electronic commerce. The White House, Washington, D.C. (Available online at: http://www.ecommerce.gov) National Research Council (NRC). 1997. Environmentally sig- ni > cant consumption: research directions. National Acad- emy Press, Washington, D.C. 214 pp. Nattrass, B., M. Altomare and B. Naijrass, 1999. The natural step for business: wealth, Ecology and the evolutionary corporation. New Society Pub, Gabriola Island, B.C., Canada, 222 pp. Nilles, J. M. 1998. Managing telework: strategies for managing the virtual workforce. Wiley, New York, 352 pp. O 9 Meara, M. 2000. Harnessing information technologies for the environment. Pages 121 3 141 in Worldwatch Institute, State of the World 2000. W. W. Norton New York. Rees, W. 1992. Ecological footprints and appropriate carrying capacity. Environment and Urbanization 4(2):121 3 130 Rejeski, D. 1999. The electronic impact. The Environmental Forum July/August, 32 3 38. Romm, J. 1999. Cool companies: how the best businesses boost pro > ts and productivity by cutting greenhouse gas emissions. Island Press, Washington, D.C., 277 pp. Romm, J., A. Rosenfeld and S. Herrmann. 2000. The Internet economy and global warming: a scenario of the impact of 162 D. Z. Sui and D. W. Rejeski e-commerce on energy and the environment (The Center for Energy and Climate Solutions, Washington, D.C. (Available online at http://www.coolcompanies.com) Silicon Valley Toxics Coaltion (SVTC). 2000. Just say no to e-waste: background document on hazards and waste from computers. (Available online at: http://www.svtc.crg/ cleance/...) Simon, L. D. 2000. Netpolicy Com. Public agenda for a digital world. Woodrow Wilson Center Press, Washington, D.C., 464 pp. Tapscott, D., A. Lowy and D. Ticoll (eds.). 1998. Blueprint to the digital economy: wealth creation in the era of e-busi- ness. McGraw-Hill, New York, 384 pp. Tenner, E. 1996. Why things bite back: technology and the revenge of unintended consequences. Knopf, New York, 368 pp. The U.S. Dept. of Commerce. 2000. The digital economy 2000. Washington, D.C. (Available online at: http://www.e- commerce.gov) von Neumann, J. 1955. Can we survive technology? Fortune June, 504 3 519 Environmental Impact of E-Commerce 163

less