Summarized by Christian Herzog

Highlights of the VEIL

The Ethical Innovation Hub's fourth Virtual Ethical Innovation Lecture featured Thomas Losse-Müller, who is an economist and public sector policy advisor, Senior Fellow at the Hertie School, FiFo Policy Fellow at the University of Cologne, and also a Senior Fellow at the University of Lübeck. He has further held various positions as a senior civil servant and is a former State Secretary for the German state of Schleswig-Holstein.

From this broad spectrum of experience, Thomas Losse-Müller is well equipped to provide both cautious, but also inspiring insights into the potential of digitalization for the sustainable transformation and what it takes to facilitate its positive impact. In the opening, Thomas Losse-Müller made clear that he believes this takes more than just having the right digital technology, but also requires very analog responses in terms of good governance.

The Strategic Dilemma

Thomas Losse-Müller reflected on the potential of digitalization for the sustainability transformation by showcasing that the discussion is often held with strong optimism. He highlighted that there is a prominent narrative of digitalization being good for sustainability in general. A paper by DIGITALEUROPE offers a more nuanced way of looking at this in terms of a net positive benefit: As digital solutions also increase the ecological footprint, this needs to be offset a corresponding gain in sustainable practice. The promise of digitalization to increase the efficiency of processes to become more efficient needs to be weighed against potential negative effects.

Real processes are complex and therefore Thomas Losse-Müller highlighted a few examples of what to account for. For instance, while digitalization provides opportunities for new business models with reduced transaction costs, enabling the sharing economy in the form of, e.g., car sharing, rebound effects may occur that result in people making use of the shared car basically in terms of their second car. Thomas Losse-Müller cited studies that proved that people did in fact reallocate foot travel to car sharing use, effectively increasing their ecological footprint. Media streaming is another well-known example, which has come to be known to drastically increase energy consumption.

Streaming is an example that elucidates the particularly tricky question of leading a more sustainable personal life: Extensive studies have suggested that not only does the ecological footprint depend on the technology behind the connectivity (transmission via glass fiber consumes less than via copper lines), but also on the content (the slowly changing imagery of romance movies consumes less energy than action movies due to the compression algorithms).

Such intricacies show that a positive net effect of digitalization for sustainability is all but certain. Governance and market players are required to go hand in hand to aid in making sustainable choices.

In his talk, Thomas Losse-Müller has identified four areas for the digital transformation to have an impact.

• In Industry 4.0, the potential lies in giving products the ability to carry necessary information that can be put to use in making fine-grained sustainable decisions and facilitating a more circular economy.
• In mobility, new kinds of (autonomous) cars and just-in-time traffic management can facilitate collective action.
• Sustainable consumption needs to be supported by platform providers, which need to put up information for facilitating sustainable consumption in retail.
• In nature conservation, agriculture and water management, more efficient use of herbicides or the detection of non-compliance with environmental protection regulation are possible options.

Thomas Losse-Müller stressed that achieving a net positive outcome in sustainability through digitalization is a matter of making the right choices in policy. If we just let digitalization happen, the effects may almost certainly turn out to be net negative.

The promise of digitalization as collective action problem

Thomas Losse-Müller elaborated on this thesis by highlighting the potential and requirements of achieving more sustainable mobility through facilitating collective action. He pointedly referred to the difference between digital statecraft vs. state failure by showcasing that autonomous driving may have net negative effects on sustainability if interconnectivity is not in place and properly utilized. Public policy goals may not be factored into commercial business models, if governments do not ensure that connectivity, standards, privacy and security are enforced. Therefore, governments need to become the operators and/or regulators, lest there be a tragic of the commons unfolding.

The potential of identifying sustainable mobility as a collective action problem was highlighted in reference to a study that questioned how to stear the eight million people that come to Tokio everyday not to create excessive traffic. Collective action was shown to reduce overall traffic by 40%

Corona and Digitalization: A Big Push

Thomas Losse-Müller highlighted a similar challenge of realizing sustainability potentials during the pandemic. While the national lockdowns have clearly resulted in huge increases in data volume, people have moved consistently from the analog to the digital (just like the Virtual Ethical Innovation Lecture). While there was hope that the increase in working from home would reduce traffic (Google data indeed showed about a 30% increase in working from home), Apple data indicated that this shift is not sustainable: The number of requests to the Apple routing system severely dropped in April 2020, but it overcompensated until October 2020. People shifted to individual mobility and stopped using public transport.

Further studies, e.g., from the Hans-Böckler Foundation, show that there is a potential for using home office at about 40% of the work places, but only about 25% make use of this right now. The usage is further unevenly distributed, as people with high income and high educational levels benefit disproportionately.

New Tools and Powers for the State

Thomas Losse-Müller highlighted a particular method for environmental protection surveillance: Satellite images can reveal compliance issues with environmental regulation. An image could be analyzed in terms of barn size, lake color, storage capacities - all of which could raise suspicion about the non-sustainable conduct at a farm. Clearly, there is a discussion to be had about the methods to be deployed versus fears of a big brother state.

New Governance

Thomas Losse-Müller closed with a recommendation to anchor sustainability into major new regulation initiatives on national and EU level. While a big part of how to regulate products was traditionally focussed on the singular event of deployment, digital technologies — AI in particular — may yield products that change over time, challenging the paradigm.

A sectoral approach to governance, focussing narrowly on human agency and rights, may fall short of considering the broader and more interconnected effects that contribute to a net positive or negative sustainability balance. A holistic approach is warranted for.

Q&A Session

Questions during the Q&A session first revolved around the issue of energy consumption for training and retraining artificial intelligence systems. While there is very little reliable data, it was also pointed out that significant asymmetries in power prevent researchers from acquiring the tools and access to measure carbon emissions. This is due to the fact that the large multinational companies leading the artificial intelligence business are also the ones gatekeeping access to the knowledge and facilities to measure the energy footprint. Thomas Losse-Müller agreed that as it stands, there is no transparency about this issue at all.

Further questions mentioned a balancing of relying on free markets and government interventions, against which Thomas Losse-Müller referred to his own experience in government, initially strongly believing in the car sharing economy to yield a net positive impact on sustainability, when it eventually didn't in an unregulated market. However, Thomas Losse-Müller did propose to use a government's spending power to invest in startups for sustainability, when there is no logical private buyer interested in the common good of improved sustainable processes.

Summary

The need for regulation for a digital transformation driving sustainability was one of the key takeaways of the VEIL. The presentation shed light on the complexities involved, which make it necessary to move beyond a narrative-oriented digital innovation environment to cleverly crafted regulation and government intervention for harnessing the potentials for achieving a net positive impact on sustainability.

Further Literature

Digital Policy Agenda for the Environment (February 2020). Federal Ministry for the Environment, Nature Conservation and Nuclear Safety, Available at https://www.bmu.de/fileadmin/Daten_BMU/Pools/Broschueren/broschure_digital_agenda_eng_bf.pdf