Global | Digitize to decarbonize

Summary

In the current global socio-economic context, and especially after the COVID-19 crisis, digitization and sustainability have become key elements of economic and social transformation, being particularly relevant to understand and analyze how both interact.

Key points

• Key points:
• A recent BBVA Research study suggests that digitization is helping to reduce CO2 emissions in highly digitized economies, like those of the Persian Gulf, the United States and Europe.
• In the medium and long-term it should encourage decarbonization in those economies with the lowest levels of digitization — such as Latin America and Africa.
• The study points to an inverted U-shaped relationship between digitization and per capita CO2 emissions and identifies certain minimum digitization thresholds, after which emissions generated by economic activity begin to reduce.
• According to this analysis, the direct marginal effect of digitization on emissions is narrow in comparison with other variables, like GDP per capita, but once the threshold is reached it can trigger a reduction in per capita emissions of up to 10% in fully digitized economies.
• The overall effect is even greater, with the potential to reduce emissions by as much as 45%, once the indirect impact—such as the gains resulting from a greater energy efficiency and a wider use of renewable energy—is included.

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