SOURCE: The Boston Consulting Group

November 18, 2008 12:40 ET

Technology Could Cut Annual CO2 Emissions in U.S. by 22 Percent and Save up to $240 Billion by 2020

Emissions Reduction Would Be Equivalent to a 20 to 36 Percent Cut in Imported Oil Consumption, According to Study by The Boston Consulting Group on Behalf of the Global e-Sustainability Initiative; Research and Recommendations Are Unveiled and Discussed at Policy Forum in Washington, D.C.

WASHINGTON, DC--(Marketwire - November 18, 2008) - Information and communications technology (ICT) has the potential to cut total carbon dioxide emissions (CO2) in the United States by 13 to 22 percent from business-as-usual projections by 2020. This translates to a gross energy and fuel savings of $140 billion to $240 billion -- equivalent to a 20 to 36 percent reduction in imported oil consumption, according to the findings of a study conducted by The Boston Consulting Group (BCG) on behalf of the Global e-Sustainability Initiative (GeSI), an international alliance of ICT companies.

The findings and a series of specific policy measures that the U.S. government can take to leverage ICT to reduce CO2 emissions were unveiled and discussed at a forum for business leaders, policymakers, and media today at the Newseum in Washington, DC. The forum, titled "SMART 2020: How Information Technology Can Help Save the Economy -- and the Planet," was hosted by GeSI and The Climate Group, an independent nonprofit organization dedicated to climate change solutions.

The findings and recommendations were also published in the "SMART 2020: United States Report Addendum," a follow-up to a June 2008 report titled "SMART 2020: Enabling the Low Carbon Economy in the Information Age," which outlined how the ICT sector can help other industries reduce greenhouse gas emissions by 15 percent and deliver savings of EUR 600 billion ($756 billion in current dollars) to the global economy by 2020. The new report was sponsored by GeSI and a subset of its membership, including AT&T, Cisco Systems, Dell, Hewlett-Packard, Intel, Microsoft, Motorola, Nokia, Sun Microsystems, T-Mobile USA, and Verizon, and included input from the Natural Resources Defense Council.

"With this study, we have taken the guidelines from the earlier report and researched specific policies and actions that should be implemented in the United States," said BCG partner Philipp Jung, who led the U.S. study. "Given the new administration's goal of cutting carbon emissions by 80 percent below 1990 levels by 2050, the case and opportunity for change have never been greater."

To achieve the potential gains outlined in the new report, BCG and GeSI recommend that the U.S. government commit itself to four overarching policies to accelerate adoption of ICT-enabled opportunities:

--  Recognize the important role that the ICT sector can play in a
    national energy efficiency strategy
--  Build a national "center of excellence" to establish standards and
    metrics for CO2 emissions, consolidate and validate data, coordinate public-
    private collaboration, and share best practices
--  Encourage the ubiquitous deployment and adoption of broadband, since
    connectivity will be the backbone of all ICT solutions
--  Create market mechanisms that reward energy efficiency and reduce
    emissions by monetizing carbon dioxide emissions
    

In addition, BCG and GeSI recommend specific policy measures in four main areas that together could contribute to an annual reduction of 0.8 to 1.4 gigatonnes of carbon dioxide by 2020. The opportunities and recommendations are:

1. A smart grid that could reduce CO2 emissions by 230 to 480 million metric tons (mmt) of carbon dioxide and save $15 billion to $35 billion in energy and fuel costs

--  Provide incentives for utilities to invest in smart-grid technologies
    and energy efficiency improvements
--  Lead by example and integrate smart-grid technologies into federally
    owned utilities
    

2. More efficient road transportation that could reduce travel time and congestion while shaving off 240 to 440 mmt of CO2 emissions and saving $65 billion to $115 billion

--  Expand investment in smart infrastructure for roads and road-related
    equipment
--  Elevate the importance of ICT solutions in current government programs
    

3. Energy-efficient smart buildings that could abate 270 to 360 mmt of CO2 and save $40 billion to $50 billion

--  Use incentives and mandates to increase the energy efficiency of new
    and existing buildings
--  Introduce environmental requirements into the certification process
    for building professionals
--  Lead by example to create demand in the market and identify best
    practices
--  Encourage R&D in smart buildings, especially where industry is
    underinvesting
    

4. Travel substitution through virtual meetings and flexible work arrangements that could reduce CO2 by 70 to 130 mmt and save $20 billion to $40 billion

--  Lead by example to encourage behavioral change
--  Share best practices to support the case for travel substitution
    

Copies of the "Smart 2020: United States Report Addendum" and the original "Smart 2020" report can be downloaded at www.smart2020.org.

To arrange an interview with a BCG expert, please contact Dave Fondiller at +1 212 446-3257 or fondiller.david@bcg.com.

About The Boston Consulting Group

The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 66 offices in 38 countries. For more information, please visit www.bcg.com.

About GeSI (Global e-Sustainability Initiative)

GeSI (www.gesi.org) is an international strategic partnership of ICT companies and industry associations committed to creating and promoting technologies and practices that foster economic, environmental, and social sustainability and drive economic growth and productivity. Formed in 2001, GeSI fosters global and open cooperation, informs the public of its members' voluntary actions to improve their sustainability performance, and promotes technologies that foster sustainable development. It partners with two UN organizations: United Nations Environment Programme (UNEP), which hosts GeSI's Secretariat and the International Telecommunications Union (ITU). These partners help shape our global vision regarding the evolution of the telecommunications sector, and how we can best meet the challenges of sustainable development.