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E-business may dramatically cut paper waste

E-business may dramatically cut paper waste

Posting in Energy

Evidence is in that e-business and e-commerce are saving considerable amounts of paper and cutting resource consumption. But more study is needed.

Earlier in my career, I helped publish a series of books on "The Office of the Future," which was supposed to come about at the turn of the century. In this futuristic office, paper would be a thing of the past, with all transactions and documents delivered electronically from workstation to workstation, company to company.

Of course, as they say, the future isn't what it used to be, and there is still too much paper being consumed in today's enterprises. The Environmental Paper Network estimates that about five million metric tons of paper are used in US offices every year. The average US employee consumes 728 pounds of paper every year.

It's fair to say, though, that there has also been a lot of progress with electronic documents as of late as well.  The question is, then, how many trees have been saved by the adoption of e-business and e-commerce? We know that data centers consume their share of energy, but is this offset or compensated by the natural resources not consumed?

INTTRA, an e-commerce platform for the ocean freight industry, recently put together some estimates of how much paper gets saved as a result of e-commerce. The main driver for the switch from manual, paper-based processes is cost-savings and efficiency, but saving paper is a very beneficial side effect.

For example, one industry that has taken the lead in reducing paper consumption is the airline industry. E-tickets have quickly replaced paper tickets for many airlines, including Delta and United. The concert industry has also started to use e-tickets, not only to decrease paper use, but to help prevent scalping and increase security. Industries that have switched to electronic commerce have saved millions by reducing paper costs and following more efficient methods.

Along with INTTRA's observations, the insurance industry has also been pursuing electronic claims and application forms, cutting into the paperwork blizzard.

INTTRA says that ocean freight providers alone have saved potentially 25,000 trees annually as a result of using its e-commerce network. The organization also estimates that the INTTRA platform, which handles 10% of global container transactions, potentially saves more than 222 million sheets of paper annually for shipment documentation and printed messages. INTTRA has developed "green" calculators to show just how much money, time and trees companies can be saved by switching to electronic commerce.

Another clue to the e-business resource-saving puzzle is a study conducted by Joseph Fuhr and Stephen Pociask in 2007, who looked at the environmental impact of broadband adoption. The greatest potential for greenhouse gas reductions, the authors say, appears to be in e-commerce (206 million tons), telecommuting (over a half a billion tons), teleconferencing (200 million tons) and paper reduction (57 million by reductions in newspaper circulation alone). If all of the greenhouse reductions noted in this study were converted into energy saved, Fuhr and Pociask forecast that IT applications could save 555 million barrels of oil by year 10, or roughly 11% of the oil imported into the US today.

"In general, the evidence presented in this study shows that broadband-driven technologies can make a sizable contribution to reducing carbon emissions, as well as many other environmental benefits," Fuhr and Pociask point out. "Workers and consumers routinely send and receive electronic documents that once were printed on paper, thereby saving trees, reducing air and water pollution and saving the energy needed for manufacturing, distribution and sales. Newspaper circulation is declining, in large part due to increased electronic forms of news. Home-monitoring of patients is leading to fewer emergency room visits and readmissions, while reducing the air pollution associated with some home visits by nurses."

This is good stuff. What's also needed now is a bigger-picture study on the degree of power consumption that IT is helping us to avoid as well. For example, how many physical retail stores have not been built, and do not operate, due to e-commerce? How many automobile trips and additional office space is no longer necessary due to telecommuting and remote work? Perhaps, we'll find, for every kWh IT consumes, it saves x number of kWhs.

Studies, such as that published by the Lawrence Berkeley National Laboratory back in 2007 (PDF download available here), estimated that electricity used by server computers doubled between 2000 and 2005, and now gulp down about 45 billion kilowatts per hour – equivalent to the amount of power used by the entire state of Mississippi in 2005. Additional devices such as storage, network equipment, and client front-ends were not included in the calculations.

It’s no secret that data centers – especially those run by social networking leaders such as Google, Yahoo!, Microsoft, and Amazon – are the new industrial behemoths of the 21st Century. These providers are even taking care to make sure that they build their latest and greatest data centers within range of hydroelectric power sources.

Other vendors have been jumping on the “green” bandwagon, and many across the industry are pressing data center operators and solutions providers to go green, and better conserve energy resources. These are all noble goals, and there's no doubt it's in the best interest of companies to save on power costs.

However, most studies on IT energy consumption don’t to take into account the overall savings in electricity and power usage as a result of mass computerization. The author of the Lawrence Berkeley study, Jonathan Koomey, admits right up front that the study “only assesses the direct electricity used by servers and associated infrastructure equipment. It does not attempt to estimate the effect of structural changes in the economy enabled by increased use of information technology, which in many cases can be substantial.”

There's the direct impact on paper reduction, and there's another side as well. The e-commerce channel is now a strong part of many businesses, and it can be assumed that to some degree, it has replaced some bricks and mortar construction and management, and all the energy consumption that goes with that. How many stores and shopping centers have not been built because of the replacement of sales through online channels?

These structural changes can be substantial indeed, and it would be interesting to see studies on how these impacts are being felt.

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Joe McKendrick

Contributing Editor

Joe McKendrick is an independent analyst who tracks the impact of information technology on management and markets. He is a co-author of the SOA Manifesto and has written for Forbes, ZDNet and Database Trends & Applications. He holds a degree from Temple University. He is based in Pennsylvania. Follow him on Twitter. Disclosure