🔮 If the world ran like Google...
A thought experiment to put Google’s carbon emissions in perspective
What if the world’s economies were as carbon-efficient as Google? Global emissions would plummet below those of the United States or China. This hypothetical scenario emerges from recent data showing Google’s increased carbon emissions as it invested in energy-hungry datacenters.
This has been a conversation over which members of Exponential View do not agree in our Slack group (if you’re not in yet, apply to join here) and it’s inspired me to break down how I think about all this.
You may have spotted the story yesterday on Bloomberg or read it in the Financial Times: Google’s carbon emissions are up by half since 2019—and it is down to data centres. With the demands of AI coming down the pipe, in 2023, the firm emitted 14.3 megatons of CO2, up 13% on 2022 and 48% on 2019.
At first glance, this seems like an environmental faux pas of colossal proportions. But is it actually? Let’s zoom out and view this through a wider lens. The reality is more complicated than meets the eye.
Since 2019, Google’s annual revenues rose from $162 billion to $307 billion, a rise of 89% and their EBITDA profit rose from $46 billion to $96 billion, an increase of 108%. And emissions don’t exist in a vacuum. Google’s carbon-revenue efficiency — that is the amount of carbon dioxide they emitted for each dollar of revenue — improved substantially.
In 2019, the firm emitted 9.7m tons of carbon to generate $162 billion of sales. That is, each ton of emissions delivered revenue of $16,701.
In 2023, that ratio was $21,468 per ton, an improvement of 28%.
This matters because as one of the world’s biggest companies, based in the United States, Google’s revenues contribute to US GDP. For better or worse, GDP is the consensus indicator of human welfare. GDP is the yardstick we use to combat what
calls the “elemental foe”: poverty and human depredation.Rising GDP is a major indicator that the human condition is improving. Higher GDPs correlate with longer lifespans, better female legal and political rights, higher education levels, higher political participation and life satisfaction.
With that in mind, another way to interpret Google’s results is that they found a way to deliver their contribution to GDP with a 28% greater carbon efficiency in just five years — an improvement that would be the envy of presidents and prime ministers worldwide.
Better than the rest
In 2019, US GDP was $21.4 trillion dollars. That year 5.15 billion tons of carbon dioxide emissions were spewed out. That key ratio again? $4,155 of GDP per ton of CO2. The US economy as a whole was more than four times more carbon polluting per dollar generated than Google.
By 2023, emissions had fallen to 4.8 billion tons, and GDP rose $27.4 trillion. The ratio has improved to $5,708 per ton of CO2, an improvement of 37%. So while the US economy’s carbon efficiency has improved over five years faster than Google’s, it is still four times worse.
In some sense, this is like looking at an Honors student who has turned in one bad paper in a school full of D-graders. It’s a tiny fraction of the pie.
The US economy spits out 5.15 billion tons of CO2, the global economy some 59 billion. I’ll spell that out – fifty nine billion tons of CO2.
Google’s global CO2 footprint is 14.8 megatons or 0.025% of global emissions. On a per $ basis, the global economy is about 8 times more carbon polluting than Google.
Put another way, if the US economy were as carbon efficient as Google, its emissions would be 1.29 billion tons annually, well below its agreed-upon 2030 Paris target. If the world could be magicked to Google’s efficiency, global emissions would be lower than those of the US or China.
It’s a mote in their eye
It’s an interesting thought exercise. But what does this tell us?
It could be that GDP is a flawed measure of welfare. It doesn’t properly account for pollution externalities. In fact, pollution contributes to GDP because the costs of clean-up are additive to the top-line figure. I’m not saying it makes sense: it’s just how we account for it. Nor does GDP contain any measure of risk—let alone catastrophic risk. One argument is that, as a measure, GDP is useful so long as the biosphere can maintain its stability. Once it is nudged over a tipping point, then its ability to support activities that create GDP will rapidly collapse.
These are all worthwhile arguments, but it isn’t clear that they should rest solely on Google’s shoulders. If that is what we assume, it’s a bit of a dereliction of our duty as citizens. “Hey, here is a massive societal problem that we would like you tech dudes to solve for us.” It doesn’t cut the mustard.
We might also argue that chucking Google’s revenue numbers into US GDP as a proxy for welfare is a bit daft. It’s not like that GDP contribution (directly through revenue or indirectly through job creation and consumer spending) is evenly spread across the US population. It isn’t even spread equally across a small sliver of Silicon Valley. And yet, that seems to be an issue well above even Google’s high pay grade.
The grain of sand
The expansion of tech firms, especially because of AI, is creating localised pressure on electricity supplies and other resources and an increase in carbon emissions (for now). Those firms need to be transparent about what is happening—they are, it is how we know—and clear that they are working to address this.
Google’s carbon emissions – a mere 0.025% of global emissions and a dozen times more efficient than the global average – helps us see “the world in a grain of sand”, of what is possible on a larger scale. And they’re doing quite a good job, actually, despite the outraged headlines: they do explain what has caused emissions to increase, how they expect this to continue for a few years and what they are going to do about it. The bigger issue is surely the remaining 99.975% of global emissions, which are far more problematic in both relative and absolute terms.
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