Problem: AI’s Unwelcome Emissions; Solution: Invest in Farmers.
By Adam Brodsky and Isabell Geiger, DevryBV Summer ‘24 Interns
A Note From Devry: Last December, our firm crossed a critical threshold by entering into a strategic partnership with Improvability AI. Together, our companies set an ambitious goal: to transform sustainability at the local level for businesses by using artificial intelligence to manage a company’s data so that leaders can swiftly get a baseline of its sustainability footprint and begin addressing the issues in their supply chain.
As DevryBV’s team has partnered with Improvability AI in the months since, we have seen how the tool provides an opportunity for SMEs, mainly to save time and improve the quality of sustainability reporting. Deploying AI can significantly speed up progress on sustainability outcomes. However, we must face the truth about AI’s downsides to sustainability. The industry has come under fire for its massive power and water consumption.
We acknowledge the irony of using AI in our daily business, yet we cannot deny the benefits of AI, and we must continue to adopt and adapt the technology to our everyday business operations. It’s incumbent on us to look for ways to overcome the contradictions emerging in the sustainability and AI space. To that end, I’m delighted that our firm’s talented summer interns, Isabell Geiger and Adam Brodsky, scoped the problem and offered some insights and solutions (with some healthy input from me) in the article below.
In recent years, much ink has been dedicated to the ethical problems with AI. But another problem has emerged: AI’s massive and unaccounted for energy consumption.
AI as an “energy suck” shouldn’t have been a surprise to the tech industry. DevryBV uses The Humanverse™ as a strategic tool that prioritizes people and nature in business decision-making. It’s about companies considering their impact before launching new services and products into the marketplace.
A case in point: Google has announced that its greenhouse gas emissions climbed by 48% over the past five years, citing higher energy consumption at its data centers and emissions from its supply chain. The tech giant acknowledged that its push to add AI to its products could make it even more difficult to reduce emissions going forward. Google is not alone. All tech companies behind AI, such as Microsoft, Meta, OpenAI, Nvidia, and Apple, are grappling with the emissions explosion.
While it’s exciting to see AI creating new business opportunities, Big Tech’s revelation brings an unwelcome development that leads to tangible harm for society owing to delayed progress on climate change.
Collectively, businesses, governments, activists, and other stakeholders failed to anticipate and communicate AI’s enormous appetite for electricity and water to keep the systems running.
A ChatGPT query requires ten times more energy than a traditional Google search. The energy required to power new data centers, and the water needed to cool them, is increasing exponentially. There is insufficient renewable infrastructure to support today’s clean energy demands, much less future needs from AI.
With all the enthusiasm over AI's potential to solve the world’s problems, there seems to have been a willingness to overlook the downsides, if not a blatant disregard for AI’s impact on people and nature.
Why did it come to this? Let’s follow the investment flows.
Here are some numbers:
According to data provider Dealroom, between 2021 and 2023, venture capital funds directed $1.4 billion into regenerative agriculture start-ups.
Versus…
Gaming-sector investments by private equity managers alone reached $5.4 billion in 2023, hitting the highest deal value for the sector since 2016.
The U.S. Congress’ 2021 Infrastructure Investment and Jobs Act provides $8.2 billion in advance appropriations for carbon capture and storage programs from 2022 to 2026.
Some forecasts put the “metaverse” market size globally surpassing $1 trillion by 2030.
While the data above is a snapshot in time and apples-to-oranges, clearly, there has been a stark disparity of capital allocation toward tech investments. Investors, for the most part, have been leaving the notion of advancing the essential human condition aside. The hype over new tech has overshadowed the need to invest in ventures that solve real-world problems, like food insecurity.
In an article for the World Economic Forum last year, Devry Boughner Vorwerk, our firm’s CEO, argued that technology should work for humanity, not the other way around. We’ve seen money flow to the next flashy trend and leave behind what unites humanity: food, water, and shelter. With some 800 million people in the world suffering from hunger, we’ve got a problem. We can’t continue to gloss over the problem with the positive externalities of AI.
Change requires more investment and new ways to allocate capital.
Here’s the opportunity. The tech industry can deploy its capital by crossing over into the food and agriculture industry, which has been taking many hits (not all undeserved) for its emissions and environmental impacts for years.
The agricultural sector is the fourth-largest emitter of greenhouse gas emissions globally. It has contributed to deforestation, soil erosion, nutrient loss, and the release of nitrous oxide, a greenhouse gas 265 times more potent than carbon dioxide.
But tech needs to get even more specific than the ag industry in general and invest in the people actually managing the land and soil: farmers. The farmers are the actors who are most directly responsible for this critical natural resource. By leveraging the potential of smallholder farmers to better manage soil health and sequester carbon, tech companies can achieve their 2030 commitments and make up some ground on carbon offsets by supporting insets (investments) in regenerative agriculture and food innovations. Simply put, to clear the air (literally), BigTech must invest in farmers.
What would tech companies gain? Emissions reductions, heightened food security, improved soil health, resilient ecosystems—the list continues. The tech industry would transition from lagging behind on emissions to a place where everyone wins. And…healthy ecosystems plus healthy economies yield healthy consumers.
The problem is that, right now, insufficient capital is being infused into the food and agriculture industry. Traditional lenders have been wary of providing access to capital to smallholder farmers, citing lack of collateral, weak transportation infrastructure, and the extended timeframe for returns on investment, to name a few factors.
A collection of organizations have announced projects aimed at providing ag-focused investment to underfunded regions, and some have even worked with technology companies like Microsoft (AGRA) and Google (Cropin). We applaud their work; however, their scale of impact does not match the additional emissions that AI is creating, nor do these efforts come close to meeting the potential demand. And one key question: are the farmers themselves involved?
One example that caught our attention is Carbon Friendly, an assessment firm whose model is to create farmer accounts that allow smallholders to directly control their carbon accounting. The company says it captures the carbon footprint of crops or livestock with a comprehensive, cradle-to-distribution approach that tracks emissions throughout the entire supply chain (Scope 1, 2, and 3).
At DevryBV, we hold up the mirror and help companies seek, face, follow, and share the truth of their business impacts on their communities and society overall.
Tech companies can more robustly invest in the Humanverse if they choose. Investing in farmers and their soil health means investing in the sequestration of greenhouse gas emissions. Let’s innovate together on the ground, in real-time, with outcomes that create better nutrition with fewer environmental detriments.
Capitalizing on farmers' ability to enhance soil health is the most effective way for tech companies deploying AI to get their sustainability commitments back on track and fulfill fundamental climate promises.
New problems are always around the corner; BigTech can address this one today.
