Since Amazon made the first online purchase in 1995 e-commerce has grown exponentially all over the world. The global e-commerce market is now estimated to be worth more than $30 trillion. This captures more than 14% of global retail. With this growth, economic success has followed. More companies are thus taking advantage of this global trend to increase their sales.
COVID has been key in this growth especially in the last year. Pre-COVID it may have been considered just an alternative for many consumers and brick and mortar stores. Today however, have already normalized and/or embraced purchasing online and that doesn’t seem to be changing any time soon.
However, even as we celebrate the success of this industry, as with every other technology, we do have to put it under microscope. We have to assess its overall effect on the global society and more specifically the environment. Does it really stand-up to the mainstream narrative of being friendlier to the environment?
To answer this question as with any questions relating to technology, is not simple. One has to look at what sectors of our society are significantly affected by e-commerce and how it relates to the environment. Different camps have different views.
Online stores like Amazon and technology entrepreneurs are (obviously) the biggest proponents for e-commerce as a saviour to the environment. Amazon even declares on its website “Online shopping is inherently more environmentally friendly than traditional retailing.” Some environmentalist and scientist however advise caution. Texas A&M University geographer Daniel Sui and colleague David Rejeski in an interview by GreenBiz advise “caution against treating the Internet as the Holy Grail for environmental salvation.”
While one might question online stores’ motives for promoting e-commerce as the ‘silver bullet to environmental degradation’, there are some merits to their arguments. These have been summarized under the titles of de-materialization, de-mobilization and de-carbonization.
With e-commerce the buyer can browse the product, do any necessary research about it and complete purchases from the comfort of their homes via a PC or a mobile device. This means less travel to physical stores. This is perhaps the greatest advantage of online buying as compared to offline commerce. Especially considering that most greenhouse emissions are produced by customer travel. According to a report by MIT’s Center for Logistics and Transportation, customer travel is found to be about 75% of total offline greenhouse emissions. It also yields about 3.1 kg of carbon dioxide per shopper.
Increased e-commerce also means reduced number of shopping centers. A brick-and-mortar store requires temperature installation, lighting for security and display, fixture installation and operation fixtures. Online stores seem to have the upper hand over traditional brick-and-mortar shopping. That is if we factor in employee transportation to and from work. A study by Carnegie Mellon University also corroborates to that fact. It points to an overall 30% reduction in overall carbon footprint in the United States when customers choose online stores over traditional shopping.
That said, e-commerce does exert some stress on the environment. It still requires energy, for manufacturing, storage, transportation, logistics and much more. The electricity demands can be offset by higher energy use in brick-and-mortar stores. The upstream effects however result in increased demand for electronic devices. These are definitely significant.
More devices means increased demand for minerals and raw materials for manufacturing. Mineral extraction is one of the largest contributors to environmental degradation mainly because open mining, the most popular method of mining, irreversibly destroys the areas’ faun and fauna leading to soil erosion and desertification.
E-commerce also makes it extremely easy to make purchases. Bill Gates calls it buying at the “speed of thought”. While this means increased economic activity and profits, it also means increased manufacturing and with it increased stress on the environment as we extract more to satisfy consumers’ insatiable demands.
We also have to give consideration to the packaging material that is used to wraps items as they are shipped to their destinations. Many online stores still use harmful material like plastic that is non-biodegradable and difficult to recycle.
All in all however, e-commerce is proving to be viable alternative, as far as the environment is concerned. But it is not an open and shut case, we still have to continue working out the bugs to ensure that e-commerce works for us and the environment. And herein is a space for innovation.
Innovating to zero
A few companies are leading the in this space. Companies like Package Free Shop, everythingeshop.com, Limeloop and Noissue solve their packaging problems by wrapping their items in recyclable, re-usable or biodegradable material. Even the giant Amazon is trying to cut down on packaging by offering “frustration free” packaging on some items where they send items in their original packaging. “Amazon Day”, a new program for Prime members, allows customers to choose a specific day to get all their orders delivered.
If we can fix the few negative effects that come with e-commerce, we are set to experience much needed booms in our economies but also take care of the earth for our future.