Summary information

Study title

Digitalisation, Dematerialisation and Decarbonisation of the Global Economy in Historical Perspective: The Relationship Between Energy and Information, 1850-2019

Creator

Fouquet, R, Energy Studies Institute, National University of Singapore (NUS)

Study number / PID

856943 (UKDA)

10.5255/UKDA-SN-856943 (DOI)

Data access

Open

Series

Not available

Abstract

To better understand the processes of digitalisation, dematerialisation and decarbonisation, this paper examines the relationship between energy and information for the global economy since 1850. It presents the long run trends in energy intensity and communication intensity, as a proxy for total information intensity. The evidence suggests that, relative to GDP, global economic production has been reducing energy and increasing information use since 1913. The analysis indicates that it initially required little information to replace energy in production and that the ability to substitute away from energy and towards information has been declining. The result implies that the global economy is now reducing energy and increasing information at a substitution rate of 0.2 kB per kWh of conserved energy or 0.8 GB per tonne of carbon dioxide mitigated. As the price ratio of energy to information is currently higher than this marginal rate of substitution, there are incentives to further substitute information for energy. However, one conclusion is that (without the long run escalation of carbon prices) substitution away from energy and towards information is likely to cease within the next few decades and, beyond that, digitalisation will play a declining role in the decarbonisation process.This proposal responds to a call from the Research Councils for a national Centre on energy demand research, building on the work of the existing six End Use Energy Demand Centres, for which funding ends in April 2018. Energy demand reduction is a UK success story, with a 15% fall in final energy consumption since 2004. Major further reductions are possible and will be needed, as part of a transformation of the energy system to low carbon, to deliver the goals of the Paris Agreement and the UK carbon budgets. Moreover, a low carbon energy system will be increasingly reliant upon inflexible and variable electricity generation, and therefore demand will also need to become more...
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Methodology

Data collection period

02/01/2019 - 01/07/2022

Country

Canada, Mexico, United States, Argentina, Brazil, Chile, France, Germany, Italy, Spain, United Kingdom, Egypt, Morocco, South Africa, Kenya, Nigeria, Australia, China, India, Indonesia, Japan

Time dimension

Not available

Analysis unit

Geographic Unit

Universe

Not available

Sampling procedure

Not available

Kind of data

Numeric

Data collection mode

The global energy consumption data is from Malanima (2020). The national-level primary energy consumption data is based on Kander et al. (2013) for European economies, and from Fouquet (2009) for other countries, and updated using BP (2022). Fodder for animal power is not included in the national level, but is in the global estimates. The estimates for communication use and intensity in this paper are based on collecting statistics on the number of letters, telegrams, text messages and emails, and on the minutes of telephone, mobile and mobile ‘app’ conversations. The historical postal statistics (in number of letters), telegraph statistics (in number of messages) and telephone statistics (in number of calls) are from Mitchell (2007). This data is also available from and updated by CNTS (2020). In addition, mobile phone and SMS text messaging is available from ITU (2022) – the ITU website also provides the original telephone and telegraph statistics back to 1849.The global consumption of communication estimates are based on converting letters, messages and conversations into bytes of information using the method developed in Fouquet and Hippe (2019, 2022). This method relies on several significant assumptions. For example, one important assumption is that the average letter is 200 words (they tended to vary between 100 and 500 words) and that they averaged four characters per word, thus, equivalent to 800 bytes. It is assumed that emails are of equal length. Text messages are assumed to be shorter – five words long. Turning to conversations, a telephone or mobile phone call generated 120 words or 480 bytes per minute. Based on statistics of the minutes of phone conversation and the number of phone calls made, the average conversation tended to be close to three minutes long – this assumption is used when data only reveals conversations rather than minutes. Also, prior to ITU (2022) data, much of the global telephone data is for the number of phones used rather than minutes or calls (Mitchell 2007). Having data on both for a set of European countries and the USA, an average of the minutes per phone in any year is estimated and used to convert phone ownership into minutes of conversations. In sum, these numerous assumptions ensure that the different communication technologies can be converted into an estimate of one-to-one information sent and received, despite the inevitable limitations about trying to use a single metric for very different behaviours and technologies. The growth rate has been consistently rapid since the mid-nineteenth century. Waves of new technologies, such as telephones, mobile phones, and email, have boosted one-to-one information that the average person ‘consumed’ and the economy used. Apart from the period between 1925 and 1950, annual growth rates were above 5%. The final quarter of the nineteenth century experienced annual growth rates above 7%, as did the final quarter of the twentieth century, and the first decade of the twenty-first century. The global transition from analog to digital communication took 15 years (here, measured as an increase from a 5% to a 80% share of the market. Yet, it is worth noting that, although the most recent increase in communication use has been associated with digitalisation, the rapid increase began before the transition to digital technologies. This suggests that the demand for communication may also have boosted the transition to digitalisation.Energy prices are based on the average energy price series in Fouquet (2011). It has been updated to incorporate the ONS (2020) information on the retail price index series for fuel and light, which is available in Fouquet (2020). Communication prices are the expenditure weighted average of postal prices (Campbell-Smith 2011), telegraph prices (Kieve 1973), and telephone prices (Baldwin 1925 p.657, Post Office 1975, ONS 2020). All prices presented are in real terms (that is, in $(2020) money). The Bank of England Millenium Data set (2020) also builds a series back to the thirteenth century.

Funding information

Grant number

EP/R035288/1

Access

Publisher

UK Data Service

Publication year

2024

Terms of data access

The Data Collection is available to any user without the requirement for registration for download/access.

Related publications

Not available