< Back

How AI can drive global GDP while reduce Greenhouse Gas Emissions

Published: 30 September 2021 (4 minutes reading)

Executive Summary

•AI for environmental applications has the potential to increase global GDP by 3.1 – 4.4% while decrease GHG emissions by around 1.5 – 4.0% by 2030

•AI applications in energy (up to -2.2%) and transport (up to -1.7%) have the largest impact on GHG emissions reduction of our sectors covered, but water and agriculture still have an important role to play for the environment more broadly

Artificial Intelligence and Sustainability are two disruptive and powerful global megatrends. AI is bringing incredible advances into our daily lives at tremendous speed, raising wide concerns about how this technology will impact our society. Microsoft, together with PwC, conducted researchto answer this question. They did a preliminary assessment of some of the prospects that AI might provide for economic and environment, between now and 2030. The research based on their database of over 150 environmental AI applications focusing on four sectors including agriculture, water, energy and transport. According to the research, it is shown that AI can possibly drive global GDP by 3.1 – 4.4% in the next 10 years, while can decrease GHG emissions by around 1.5 – 4.0%. In this article, we’re going to summarize the use cases and the impact, sector by sector.

Agricultural AI levers

Agricultural AI levers have the potential to boost world GDP by 0.2% – 0.3% while lowering GHG emissions by up to 0.1% – 0.3% in 2030. The GDP impact is mainly driven by the apps that allow a farmer to precisely monitor environmental conditions and tools that automate manual tasks in farming and forestry. Precision monitoring enables savings of specific inputs such as fertilizers and water, resulting in cost reductions and less unnecessary waste. Lowering the cost base and increasing productivity are projected to enhance agricultural production and help combat food shortages. This will be especially important in emerging countries, where a fast-growing population is putting a strain on available resources

Energy AI levers

AI levers in the energy sector are expected to generate the greatest economic boost and will see global GDP grow 1.6% – 2.2% by 2030. The greatest contribution comes from levers that enable intelligent monitoring of energy consumption and the coordination of localized energy networks. By making energy prices respond to market signals in real time, intelligent monitoring has the potential to optimize electricity usage and stimulate economic activity not only in key sectors but also in households and governments. Moreover, decentralized power grids can improve the power transmission and distribution process, resulting in higher productivity in the sector and boosting overall electricity production by allowing faster absorption of renewable energies. In addition, greater use of renewable energies, made possible by localized networks and technologies of AIs that improve the efficiency of renewable plants, a reduction in the share of fossil fuels in energy generation and a shift in the energy mix towards less CO2-intensive energy sources

Transport AI levers

The impact of AI levers in transport on GDP ranges from 1.2% – 1.8% increase relative to the baseline and +0.3% to -1.7% impact on GHG emissions against baseline in 2030. The impact of GDP is mainly driven by autonomous vehicles, autonomous deliveries and technologies that enable traffic optimization. The use of autonomous vehicles can offer significant cost savings in terms of labor and capital. Better traffic control through traffic optimization can save energy costs for vehicles. To get their full benefit, they would need to be predominantly electric and be realized in a world where ridesharing is encouraged. It has to offer more than energy efficiency gains through intelligent navigation and environmentally friendly driving in order to counteract the rebound effect of increased vehicle kilometers and achieve positive effects on the environment.

Water AI levers

While AI-powered water levers have little impact on global GDP (0.04% – 0.2% by 2030) and negligible impact on global greenhouse gas emissions, they are expected to play a critical role in maintaining the health of our earth as well as human.

These benefits will not only be achieved through AI, but also require a wider range of complementary technologies. The use of levers that predict and monitor water demand can reduce electricity consumption by the water sector, allowing it to reduce its emissions. Predictive maintenance, for example, can reduce water losses from leaks, but will need sensors built into water infrastructure and connected to the IoT to feed dynamic data. In addition, this sector has the potential to reap labor productivity benefits as AI technologies automate routine processes and can optimize use of specific inputs such as pipes through tools that enable real-time monitoring of water infrastructure.

It’s undeniable that global climate change is happening at a rapid pace.

Technology offers us an opportunity to  respond to the crisis faster  and more efficiently than before.

But technology is just a tool, after all ; it is our actions that matter.

Read full report