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Why Carbon Offsetting May Not Be Enough.

By 2025, our consumption of AI through data management, deploying hardware, training software, and crisis and cybersecurity interventions will lead to massive energy demands. AI is an umbrella term under which LLM models fall (see Figure below). NVIDIA’s MegatronLM required 512 V100 GPUs over the nine days required for its training. According to this article, 512 V100 GPU consumed 27,648 kilowatt hours (kWh) over nine days. Compare this with an average USA household, which consumes 10,649 kWh annually! When you deploy systems like this that everyone can use (which is what Microsoft hopes with ChatGPT or Google with Bard), energy consumption goes up exponentially.

Of course, innovations are happening behind the scenes, like with data servers, which have got more efficient. There are about 8 million data centers globally, of which 600 are mega data centers, most of which are in the USA (40%)! When you store data in the cloud or process it in the cloud, you are probably using a data center! Here are some interesting facts: storing one Gigabyte (or 100 high-resolution pictures) in the cloud uses 7kWhof energy. Every year we produce 2.5 quintillion bytes per day! There are predictions that by 2030, data centers will be responsible for 10% of the world’s total energy!

AWS focuses on energy efficiency and plans to reach net zero by 2040. They invest in renewable energy and supply chain energy footprints (steel and concrete go into the building of a data center). Google offsets its carbon footprint through renewable energy and by buying carbon offsets. Google, for example, has invested in landfill methane capture, agricultural capture, and forestry projects. Microsoft’s Azure, claims it has been 100% carbon neutral since 2012 by “removing as much carbon each year as we emit, either by carbon removal (carbon offsetting) or reducing carbon emissions.” Of course, there are similar stories from other prominent players – Alibaba Cloud, Oracle, IBM Cloud, Tencent Cloud, etc.

To be net zero means looking at the entire supply chain! Think of an AI silicon chip that fits into your Apple iPhone! Each phone has 60-70 elements from the periodic table (cobalt, silicon, lithium, etc.). The parts come from 200+ suppliers from 43 countries (see here)! The environmental impact comes from raw material extraction, production (including software and support services like iTunes, App store, etc.), transportation, assembly, marketing, ops support, and individual customer usage. How do you calculate this?? Apple plans to be carbon neutral across its supply chain by 2030.

Wired says this, “Those parts, along with the Touch ID components, combine for that 160,000-mile commute embedded in the iPhone---two-thirds of the distance to the moon. And even that is still only part of the story. The movement of these components does not include the mining, processing, and shipping of the rare earth elements vital to so much of our twenty-first-century technology, or the movement of the vast quantities of energy and water needed to obtain them.

This situation is the same for Samsung, Nokia, or any laptop you use, a wearable, a smart device like an automated car, washing machine, or other IoTs…and it will grow exponentially! Now a mega data center has over 5000 servers!!! You figure out how many iPhones it is equivalent to!

Although trade in integrated circuits represents 4% of total world trade, they are the world’s most traded product. The biggest exporters of semiconductors (HS code 8542) are Taiwan (Chinese Taipei), China, South Korea, Malaysia, Singapore, and the US. The biggest importers of integrated circuits are Hong Kong, China, Singapore, Taiwan, and South Korea.” - ShipHub

Hence you are offsetting something that you are not sure about. Now the picture above is a story that I love to tell. The Toucan lives in the Amazon basin. When I traveled to Brazil a few years back, our local guide told us how the Toucans drowned as they flew across the many rivers. Their beaks are very heavy, and they cannot make the distance. The birds do not fly but climb trees, jump off, and glide across to the other side. Now think of an offsetting method. First, you preserve the forest – this is great as forests absorb carbon – but hey – they were doing that anyway, so does this count? Second, cutting a tree releases carbon dioxide, and deforestation accounts for 10% of emissions. So, is it preventive, but is it offsetting?

Not sure carbon is the only term we need to worry about. Especially as nitrous oxide is also a key greenhouse contributor, though, to be fair, most of the emissions are carbon-based, but this does not look at the toxicity we create to the land and water. Every silicon chip or lithium battery that is not appropriately recycled (and now in smart cards, SIMs, toasters, AirTags, credit cards, hotel key cards, etc.) causes health hazards (see Table below and studies like this). So smart cities, smart manufacturing, and devices need to have an end-of-life plan.

Source: Vilard

Let’s say you plant trees. It may take 50-100 years for a tree to grow tall enough for the Toucan to climb. Meanwhile, it is well-known saplings are not equivalent to mature trees! So definitely, you are protecting the future, but you cannot say it is the same level of offsetting as an old tree. Besides trees and managing methane emissions, mangroves, bogs, and oceans are natural carbon sinks. Cities need to be better designed as now as concrete jungles radiate heat! Oceans need to be managed (the more acidic and hotter they get, the more CO2 is released). Now we are experimenting with data centers in the oceans!

To offset carbon, get carbon neutral, and commit to net zero or, even better, plan to achieve human well-being and planet flourishing; we need to change how we design products and manufacture them (see what silicon chips cost in energy terms for manufacturing), recycle them, and be more aware of our individual consumption footprint. Google has a tool for its cloud usage, Alibaba and AWS has one, but no one says what the carbon footprint of the tool is. Using the internet, computer, online video calls, writing and posting articles, saving pictures on the cloud, and sending emails leave a sustainability footprint. Are we aware of this?

For the future, if we are to protect the environment (climate is part of this), the responsibility cannot be of the private sector and governments alone. Shareholders are also accountable! Customers are responsible, and government needs to partner with all of them to educate, regulate and ensure we are net positive. If we are to start – we need to stop using the phrase “carbon credits” and “offsetting” and move to more accurate terminology. We must identify these new tech’s sustainability footprints, reduce our consumption and invest in better recycling and regulations like Right To Repair (EU, India, UK). To go forward, we need to establish a very accurate vocabulary to ensure we are not just reducing the environmental footprint (it is not just carbon) but also allowing for human and planet flourishing.

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