The environmental footprint of the platform economy

The platform economy is inevitably responsible for a myriad of environmental impacts, both positive and negative. These impacts are, however, difficult to identify and measure because of the complex impact chains and rebound effects. Very little research results (especially quantitative) on the topic exists at present moment. In the accompanying video, we list some key factors of the environmental footprint of the platform economy relating to (1) technology, (2) digitalisation and (3) patterns of consumption and production.

Technology

Platforms, as any other digital products and services, rely on large volumes of data centres and computing power. These require considerable amounts of energy, especially in the form of electricity and cooling. On the other hand, in the most hands-on meaning of technology, we need various devices to access platforms. Production of smart phones, tablets, computers, etc. is resource consuming and new models come up constantly. Short-lived, out-dated devices end up as electronic waste.

Digitalisation

Intuitively one might assume that through digitalisation, the platform economy would replace physical and material functions with digital and virtual solutions, and thus diminish use of natural resources and reduce harmful environmental impacts. But in fact, oftentimes platforms have a way of mixing the virtual and physical worlds, in some cases even accelerating material transactions. Secondly, digitalisation enables a global outreach, which in turn can increase global logistics. We have already seen this phenomenon with ever-growing online market places with global user populations.

Consumption and production

Perhaps the most intriguing and crucial factor is the question of consumption and production patterns in the platform economy. It brings us to analyse issues such as societal values, user behaviour, business strategies and political agendas. Will our underlying objective within the platform economy be “more with less”, “more and more” or “less is more”? The topical concepts of the circular economy and sharing economy highlight sustainable and responsible aspirations. In the optimal case the platform economy can align with these concepts and for example implement in practice innovations that promote access instead of ownership.

Selected articles and websites

World Economic Forum: How can digital enable the transition to a more sustainable world?
MRonline: The hidden environmental impacts of “platform capitalism”
Government of the Netherlands, Ministry of Economic Affairs: Argument map The Platform Economy
Bemine, Emma Terämä: Sharing – more common than ever & an integral step on our way to sustainable consumption

Heidi Auvinen

Research Scientist VTT Technical Research Centre of Finland Ltd
Share this
TwitterFacebookEmailLinkedIn