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The E-Commerce Boom Doesn’t Have to Be a Climate Disaster

(Bloomberg) —

Since it first showed up more than two decades ago, e-commerce has slowly eaten its way into the global retail landscape a few fractions of a percentage point at a time. Hundreds of millions of consumers now buy billions of items online, which are delivered to them quickly via a sophisticated network of storage and distribution facilities. First came the shelf-stable items such as books and electronics, then food and fashion.

Covid-19 has taken this trend and lit a fire under it, sending U.S. e-commerce from 11.3% of all U.S. retail at the end of 2019 up to 16.1% at the end of the second quarter of this year. It took more than seven years for e-commerce to expand from 5% to 10% of total retail sales; Covid-19 produced that same growth in six months. This year, 95% of shoppers say they plan to shop online between Thanksgiving Day and Cyber Monday.



chart, line chart: Spot the Spike


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Spot the Spike

Independent analyst Benedict Evans describes the history of e-commerce as searching for a new level—how much of the total retail market could it feasibly capture? It’s not likely to stop growing, but it probably won’t absorb all of the retail market, either.

What it will absorb is more electricity for warehouses, more fuel for delivery vehicles, and more computation energy for search, recommendation, and transaction processing. This could be viewed as a losing crisis for every possible facet of modern life, from the planet-scale (carbon dioxide emissions) to the hyperlocal (tailpipe emissions at street level). More e-commerce, in this sense, means more of everything bad.

Video: Store capacity varies depending on the store’s size and state (KGW-TV Portland)

Store capacity varies depending on the store’s size and state

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That may come to pass unless companies change their behavior. But based on what they have done already and say they intend to do, those bad outcomes may not necessarily happen. Data center electricity consumption has only grown 6% since 2010, even as annual data traffic has grown more than 1,700%, according to calculations made over the years by Cisco Systems Inc. Technology and e-commerce companies now routinely source clean electricity for their data centers and warehouses. They design their own electric delivery vehicles. They make challenging commitments to reach net-zero greenhouse gas emissions.

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Shoppers are perhaps not inherently self-optimizing. Corporations are, because doing so matters to them. Knowing the carbon footprint—and the local traffic flow and acoustic impact—of every item sold is integral to this effort. Each purchase is an opportunity to eke out an emissions improvement.

Years before it was official policy at UPS, for instance, the delivery company’s drivers had an “unofficial understanding” about left turns: “Left turns mean idling, which increases the time a route takes,” according to the company’s website. “Right turns are faster. Right turns save fuel.”

That same logic extended to every element of retail, from packaging to home delivery, could reduce the carbon footprint of a product. It’s a world of avoided left turns, with an end goal of zero emissions in a still-expanding retail sales market.

Nathaniel Bullard is a BloombergNEF analyst who writes the Sparklines newsletter about the global transition to renewable energy.

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©2020 Bloomberg L.P.

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