Digital Transformation Trade, Climate, and Net Zero Pathways: Scenarios and Implications for Developing Countries and Climate-Resilient Development

The document examines the 'twin transition' of digital and green transformations, highlighting how digital technologies can both enable climate action and contribute significantly to global greenhouse gas emissions. It identifies critical gaps in infrastructure and financing for developing countries and proposes five priority decarbonization levers: green infrastructure, energy-efficient operations, sustainable supply chains, circular economy models, and climate-compatible infrastructure. The authors argue for coordinated international cooperation, targeted financial incentives, and the integration of environmental provisions into digital trade agreements to ensure an inclusive transition to net zero.

• The 'twin transition' involves the simultaneous pursuit of digital and green transformations, where digital tools are used to accelerate low-carbon economies, though this potential is not automatic and depends on policy and capacity.
• Digital technologies contribute between 1.4% and 4% of global greenhouse gas emissions, a level comparable to the airline industry. To meet the Paris Agreement's 1.5°C target, these emissions must be reduced by at least 50% by 2030.
• Data centers are highly energy-intensive and resource-heavy, with electricity consumption projected to more than double from 460TWh in 2022 to over 1,000TWh by 2026.
• A significant digital divide persists, with 2.6 billion people (approximately 32% of the global population) offline as of 2024, and internet penetration in low-income countries at only 27%.
• The mobile industry faces a major challenge with scope 3 emissions, which account for 70% of its total carbon emissions. Progress in reducing operational emissions (scope 1 and 2) between 2019 and 2023 was highest in Europe (-56%) and North America (-44%), while Greater China saw an 8% increase.
• Developing countries with abundant renewable energy, such as Kenya, Morocco, and South Africa, are well-positioned to attract investment in green data centers. Kenya is specifically developing a 100 MW geothermal-powered facility with plans to expand to 1 GW.
• Global demand for critical minerals is expected to increase by up to 500% by 2050, offering resource-rich developing countries opportunities to move up the value chain through local processing of materials like cobalt, lithium, and rare earth elements.
• Current efforts to address the digital sector's climate footprint are fragmented and uncoordinated, lacking a harmonized global framework for transparent and comparable reporting of GHG emissions and energy consumption.

APA

Ismail, Y., & Bayat, N. (2025). Digital Transformation Trade, Climate, and Net Zero Pathways: Scenarios and Implications for Developing Countries and Climate-Resilient Development. Forum on Trade, Environment, & the SDGs. https://lyrical-cormorant.files.svdcdn.com/production/assets/images/Publications/TESS-Briefing-Note-Digital-Transformation-Net-Zero.pdf?dm=1757416928

Chicago

Ismail, Yasmin, and Nadira Bayat. Digital Transformation Trade, Climate, and Net Zero Pathways: Scenarios and Implications for Developing Countries and Climate-Resilient Development. Forum on Trade, Environment, & the SDGs, 2025. https://lyrical-cormorant.files.svdcdn.com/production/assets/images/Publications/TESS-Briefing-Note-Digital-Transformation-Net-Zero.pdf?dm=1757416928.

Wikipedia

{{cite report |last1=Ismail |first1=Yasmin |last2=Bayat |first2=Nadira |title=Digital Transformation Trade, Climate, and Net Zero Pathways: Scenarios and Implications for Developing Countries and Climate-Resilient Development |publisher=Forum on Trade, Environment, & the SDGs |date=September 2025 |url=https://lyrical-cormorant.files.svdcdn.com/production/assets/images/Publications/TESS-Briefing-Note-Digital-Transformation-Net-Zero.pdf?dm=1757416928 |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{ismail2025digital, author = {Ismail, Yasmin and Bayat, Nadira}, title = {{Digital Transformation Trade, Climate, and Net Zero Pathways: Scenarios and Implications for Developing Countries and Climate-Resilient Development}}, institution = {Forum on Trade, Environment, \& the SDGs}, year = {2025}, month = sep, url = {https://lyrical-cormorant.files.svdcdn.com/production/assets/images/Publications/TESS-Briefing-Note-Digital-Transformation-Net-Zero.pdf?dm=1757416928}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }