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Funding Sustainability

In a course on technology policy that I taught a few years ago, a very capable and diligent student proclaimed in class one day that use of the Internet is free, and the benefits to the user are virtually unlimited because of the many applications already available and yet to be invented. When I pointed out that someone had paid for the laptop and smartphone in front of him, the subscription for the latter, and the roughly 4 percent of his $50,000 annual tuition, room, and board at Pomona College that is dedicated to information technology infrastructure and services, he readily acknowledged the point that the cost of his digital usage was significant but was embedded in capital and operating expenses in a way that obscured his awareness of them.

Policy discourse and social commentary on the Internet are similarly inattentive to the costs of digitization, a noteworthy omission because these costs are not insignificant. Since the late 1990s, ICT has accounted for about one-third of private investment in the U.S. economy. (See Table 5–2.) Meanwhile, the sums required to attain sustainability far outstrip actual investments. The capital costs for ICT may therefore be an impediment to environmental balance.

Table 5–2. U.S. Total Investment versus ICT Investment, 1992–2012

One recent study concluded that the investment required to align U.S. greenhouse gas emissions with a global goal limiting the rise in atmospheric temperature to 2 degrees Celsius (which many scientists think can avert a severe disruption of industrial society) would have to increase by $25.6 billion, to an annual total of $52.5 billion. This does not include the cost of adapting to climate change (e.g., building sea walls, resettling populations away from expanded flood zones) or investments for other critical elements in the balance between people and nature, such as contributions to biodiversity preservation in developing countries. One might argue that these increased capital costs can be financed from economic growth, including the considerable profits yielded by the ICT industry, but this approach might well continue to produce the rebound effect that limits the benefits of greener production by increasing overall output.

A society that maximizes digitization with little attention to its consequences can expect two additional phenomena that are already in evidence. The first is the increased enclosure of individuals in communication silos that reinforce a narrow sense of self, where commercial priorities are embedded in a radically expanded assemblage of structures and messages. The second is polarization in wealth and income that is produced by the hightech strategy of economic development. Noting the high incomes that prevail in the “knowledge sector” of the economy that employs relatively few people, economist James Galbraith has concluded that “the effect of a redistribution toward the K-sector must truly be a massive funneling of income from the many to the few.”

The polarization of income and wealth observed worldwide in recent decades, some of which is caused by the growth of high-tech industries such as ICT, undermines the social resilience that is essential for sustainability. More-equal societies have fewer poor people; in such societies, it costs less to transfer income to the poor because there are fewer of them. Likewise, more-equal societies have fewer rich people, which mitigates against the rich “opting out” of society through privatization of public goods and exaggerated individualism. And finally, more-equal societies have lower private debt, which is an important means of transfer from the poor to the rich. The money not transferred to the rich through debt payments can be used instead for public investments, such as in environmental preservation, good education, and the arts.

At its core, investment capital is a measure of a society's freedom, representing the resources to address urgent issues and to enhance prosperity. The large claim that digital industries have on these resources in a global society that faces severe ecological disruption warrants closer attention than it has received to date.

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