Paved with good intentions: From digitalization to carbon neutrality

Researchers and practitioners have promoted digitalization as a crucial tool for achieving carbon neutrality. In this paper, we argue that for digitalization to positively impact carbon neutrality, several essential supporting conditions are required. Using the Georgescu-Roegen/Daly ecological production function approach, we argue that digitalization alone a) will not necessarily lead to dematerialization, partly because it tends to economize on labor rather than other, less sustainable production factors, and partly because it requires a material- and energy-intensive infrastructure; b) will result in both quantitative and qualitative output expansion rather than substituting existing products and services with more sustainable alternatives; and c) will not promote carbon-conscious corporate governance practices. We suggest that a systemic perspective is necessary to analyze the complex relationships between digitalization and carbon neutrality.