UN reveals digital economy's environmental toll on developing nations

The UN Conference on Trade and Development (UNCTAD) said Wednesday that developing countries bear the environmental impact of the digital economy while reaping relatively small benefits from key digitalization in mining and minerals.

UNCTAD released its Digital Economy Report 2024, which revealed the global digital sector's significant environmental impact as well as the disproportionate burden placed on developing countries.

"The rise of technologies such as artificial intelligence (AI), and cryptocurrency and cryptocurrency mining has significantly increased energy consumption," UNCTAD Secretary-General Rebeca Grynspan said during a press conference in Geneva.

"For example, Bitcoin mining's energy consumption rose 34-fold between 2015 and 2023, reaching around 121 terawatt hours."

In comparison, she said countries such as Finland and Belgium consume less than 90 terawatt hours.

"So, only the energy consumption of Bitcoin mining is more than what Belgium or Finland consumes per year," said the UNCTAD head.

The report highlighted that, while digitalization drives global economic growth and offers unique opportunities for developing countries, its environmental repercussions are becoming increasingly severe.

"We must harness the power of digitalization to advance inclusive and sustainable development while mitigating its negative environmental impacts.

"This requires a shift towards a circular digital economy, characterized by responsible consumption and production, renewable energy use, and comprehensive e-waste management.

'Impact can be reversed'

Grynspan noted that the digital economy's growing environmental impact can be reversed.

She said digital-related waste increased by 30% between 2010 and 2020, reaching 10.5 million tons globally.

"Digital waste and digital waste management remains inadequate. This is a huge concern given the pollution this generates and its impact on the environment," she said.

Due to existing digital and development divides, developing countries continue to be disproportionately affected economically and environmentally. However, according to the report, they have the potential to influence this digital shift to foster development.

The report highlighted the critical need to address the environmental costs of rapid digital transformation.

Key concerns include the depletion of finite raw materials for digital and low-carbon technologies, escalating water and energy consumption, and the growing issue of digitalization-related waste.

As digitalization progresses at an unprecedented rate, the report says understanding its link to environmental sustainability is becoming increasingly vital.

Increased demand for minerals and metals required for digitalization offers resource-rich developing countries a unique opportunity to diversify within the digital value chain and drive development for their citizens.

The world is witnessing a 500% surge in demand for minerals crucial for digitization predicted for the year 2050.

"So, we expect a 500% surge in the use of minerals for digitalization by 2050. And this is driven by consumer electronics, electric vehicle batteries, and renewable energy storage," said Grynspan.