The Internet of Things is the key to achieving carbon neutrality in 2021

Carbon emissions will be a huge market in the future, and it will also be a huge opportunity for IoT companies. Because IoT will play an important role in achieving carbon neutrality. Various systems composed of IoT seem to equip our planet with a layer of "digital skin" that can effectively monitor, analyze and manage carbon emissions. Various IoT companies are important participants and leaders in carbon neutrality. We use the power of science and technology to improve energy efficiency and further strengthen energy conservation and emission reduction.

Since the 2021 Government Work Report listed "solidly carrying out all the work related to carbon peak and carbon neutrality" as a key task, "carbon neutrality" and "carbon peak" have become hot topics of discussion among all sectors of society.

There are two important time nodes. One is that the Chinese government announced that it will reach its carbon peak before 2030 (carbon emissions will reach their peak), and the other is to achieve carbon neutrality (net carbon emissions will be zero) by 2060.

What is "carbon neutrality"? Simply put, it is to offset the carbon dioxide emitted by humans through artificial means, such as afforestation, energy conservation and emission reduction, so that the total amount of carbon released into the atmosphere is offset by the positive and negative, and the net value is zero.

Why pursue "carbon neutrality"? In addition to the epidemic, climate change is another focal issue concerning the survival of all mankind. Everyone should be able to empathize that the earth has become increasingly "unsettled" in recent years. Floods, droughts, extreme cold and heat waves, melting glaciers, forest fires, all of these have a common culprit behind them: the greenhouse effect.

Human activities release a large amount of greenhouse gases, which wrap the earth like a thick blanket, preventing it from dissipating heat. There are many types of greenhouse gas emissions, but the main component is carbon dioxide, which accounts for more than 70%. Therefore, achieving carbon neutrality has been put on the agenda by countries around the world.

According to multiple estimates, China's funding needs for "carbon peak" and "carbon neutrality" will reach tens of billions of yuan. So where does the money come from?

The central bank revealed at the first quarter financial data release conference on April 12 that it is working hard to establish a carbon emission reduction support tool that directly reaches the real economy and strive to launch it as soon as possible. Industry insiders said that in addition to green credit and green bonds, carbon financial products such as green insurance, green leasing, and green trusts can also be developed.

Carbon emissions will be a very huge market in the future and also a huge opportunity for IoT companies.

Because the Internet of Things will play an important role in achieving carbon neutrality. The various systems composed of the Internet of Things are like equipping our planet with a layer of "digital skin" that can effectively monitor, analyze and manage carbon emissions. Various Internet of Things companies are important participants and leaders in carbon neutrality. We use the power of technology to improve energy efficiency and further strengthen energy conservation and emission reduction.

Many organizations and countries have noticed the important role played by the Internet of Things in achieving carbon neutrality. According to data released by the World Economic Forum, the combination of the Internet of Things with 5G, artificial intelligence and other technologies can help reduce carbon dioxide emissions by up to 15% worldwide.

Further analysis shows that the vast majority of IoT projects are aligned with the goal of carbon neutrality. 84% of IoT projects can meet global sustainable development, of which 25% focus on industrial and infrastructure innovation and 19% focus on providing affordable clean energy.

In this article, I will focus on the topic of how the Internet of Things can help achieve carbon neutrality and analyze the role that the Internet of Things can play in it:

1. What is the underlying logic of the Internet of Things in helping achieve carbon neutrality?

2. What are the “intersections” between the Internet of Things and carbon neutrality in different industry scenarios?

3. What are some successful cases of IoT companies practicing carbon neutrality?

The content of this article is compiled and summarized from 5 research reports:

"Carbon Neutrality Economics: Macroeconomic and Industry Analysis under New Constraints" jointly released by CICC Research Department and CICC Research Institute

"Frontier technologies to protect the environment and tackle climate change" released by the International Telecommunication Union (ITU)

"Towards Carbon Neutrality by 2060 - Focusing on Opportunities and Challenges on the Road to Decarbonization" jointly released by Beijing Institute of Green Finance and Sustainable Development and Hillhouse Institute of Industry and Innovation

McKinsey’s Leading the battle against climate change: Actions for China

Accenture released "IoT Predictions: IoT will play a key role in fighting climate change"

01. The underlying logic of IoT in promoting carbon neutrality

The combination of IoT with 5G, AI, blockchain and other technologies can collect a large amount of data from the environment, identify and analyze the opportunities for energy efficiency improvement, and provide reasonable action suggestions. From the perspective of universal application scenarios, the underlying logic of IoT in helping carbon neutrality revolves around the following three points:

1. IoT helps monitor carbon emissions

The basis for improvement is recording and understanding. Various smart sensors can allow enterprises to grasp energy and loss data in real time and effectively detect waste. These data include not only the carbon footprint generated by the enterprise during production and operation, but also the carbon emissions during office and travel.

For example, in the carbon footprint disclosed by Apple, carbon emissions during product production account for the largest proportion, accounting for 76%, followed by carbon emissions during product use and product transportation, accounting for 14% and 5% respectively.

2. IoT and AI combine to predict and reduce carbon emissions

Artificial intelligence technology can predict future carbon emissions based on the company's current work processes, emission reduction methods and needs, which can help companies more accurately formulate, adjust and achieve carbon emission targets.

According to an analysis by Boston Consulting Group, the use of AI could help reduce 2.6 to 5.3 billion tons of carbon dioxide, accounting for 5% to 10% of total emissions reductions.

3. The combination of IoT and blockchain promotes the benefits of achieving carbon neutrality

In order to supervise enterprises to achieve carbon emission reductions, some supporting facilities are also needed, such as carbon trading.

Many countries issue carbon emission quotas to enterprises every year. Enterprises whose emissions are less than their quotas can sell their excess quotas on carbon exchanges, while enterprises whose emissions exceed their quotas will need to buy emission rights on the market. The advantage of doing so is that it can encourage enterprises to actively reduce carbon emissions in a more market-oriented manner.

Under this mechanism, high-energy-consuming energy companies will have high carbon emission costs, while companies using new technologies and new energy sources can become "carbon sellers" and use the saved carbon quotas to increase profits.

For example, Tesla finally achieved full-year profitability for the first time last year, but this achievement was not achieved by selling cars, but by selling carbon. Tesla's carbon credit revenue in 2020 reached US$1.58 billion.

my country has launched local carbon trading pilot projects in many provinces and cities since 2011. The construction of the national carbon market has accelerated this year. The president of the Shanghai Branch of the People's Bank of China revealed in an interview that it is planned to launch national carbon trading before the end of June.

In this process, the validity and disclosure of carbon information are key. However, the challenges of tracking and reporting carbon emissions data are not small. Many countries also require the disclosure of environmental, social and corporate governance data (ESG), which are often recorded inaccurately.

To address these challenges, some companies are trying to combine IoT and blockchain technologies to simplify and facilitate the collection and automated reporting of ESG data.

Based on the above three underlying logics, different companies can reduce carbon emissions from different aspects.

For production, processing and manufacturing companies, they can start from the five major links including raw materials, production, distribution, use and recycling, and use the Internet of Things to connect the entire value chain to help achieve carbon neutrality.

Raw materials: Reduce the use of resources.

Taking agriculture as an example, data from the World Bank shows that more than 70% of the world's fresh water is used for agricultural irrigation, and IoT sensors and automatic irrigation systems can effectively save water.

These sensors can also monitor the overall environment for crop growth, including light intensity, soil nutrients, and air temperature and humidity, to determine the best time for sowing, irrigation, and fertilization, thereby effectively utilizing various resources and improving crop yield and quality.

Design and manufacturing: improving processes and reducing waste

Through intelligent interconnected products, manufacturers can gain a deeper understanding of product usage and optimize the design of new products based on data analysis results. For vulnerable parts, companies can choose stronger materials for production in advance.