One of these evolutions is the slow demise of paper money, as it is gradually replaced with electronic payment methods. But it turns out that, on the environmental level, new isn’t necessarily better. With the disappearance of the old-school banknote, comes a massive energy bill.
The cashless revolution is making slow but steady progress around the world, both developed and developing. As countries get more and more equipped with payment terminals and smartphones, customers naturally resort more and more to cashless payments. The ten most cashless countries in the world, which range from Belgium to South Korea, all count over 70% of all payments being made with media other than cash. TalkBusiness predicts “It’s unlikely that the cashless future will take even that long, though. According to a BBC article from mid-2015, cashless payments, inclusive of debit cards, cheques, and NFC-based transactions like Apple Pay, are already more popular than physical currency. The same article predicts a 30% collapse in the amount of real money on the market by 2025.”
In recent years, RFID technology and NFC payment systems have made tremendous progress, pushing the limits of payments even so far as to enter the human body with biotechnological solutions. And in the next decade, analyst Sophie Charara predicts payment systems will even penetrate the clothes we wear: “We might not see any of the Central Saint Martins concepts on shopper's wrists any time soon but for Visa, it is confident that secure payments can - and will - be made using every type of wearable from a simple chip in a bPay-style band to an Apple Watch wrist computer and everything in between.” All in all, the cashless economy promises ever more convenience in the new connected era.
But environmental agencies are starting to raise flags on what could be a massive surge in energy consumption, linked to the advances in technology. In a time when most developed countries are trying to reduce their carbon footprint and energy needs, it seems increasingly clear that the infrastructures necessary to cashless solutions are not the next best thing for the planet. Adam Vaughn investigated server carbon footprints for the Guardian and says that “varying from a small room with servers to vast farms with a floor area of 150,000 sq m, datacentres are big energy users. As well as requiring power to run the equipment that stores and serves us cloud computing and on-demand music, films and entertainment, those servers also generate a lot of heat and require huge amounts of energy to keep them cool.”
In fact, the infrastructures necessary to feed the digital age have become so huge that server farms are now at par with airlines, with a claim on 2% of the global greenhouse gas emissions. And while airline travel is only growing at a moderate and regular pace, server farms and digital infrastructures are soaring at an alarming rate - with no significant progress to come on their energy consumption levels. RM support website explains why, the more servers you run, the more heat and energy you waste: “All power supplies, whether in desktops or servers, are on average approximately 60%-80% efficient. This implies that say a 200-watt maximum output PSU would consume 333 watts of input power to supply these 200 watts on full load”. Linked to this extra energy waste, Dr Martin Hilbert, from the University of Southern California, warns that the expansion is getting out of control: “Global storage capacity doubles about every three years and four months, and in 2007 reached 295 exabytes (295,000,000,000,000 megabytes). If I would store all this information in CD-ROMs, I could make a pile that goes from here to the Moon and one quarter of the distance beyond" he says. At this exponential rate, we will quickly be unable to provide the digital world with enough energy without making very hard environmental choices. A share which will only rise as the cashless revolution continues to unfold.
In retrospect, it seems the best environmental solution for payment is… cash, simply. Because banknotes are reusable, they only consume the energy necessary to their production once, and then are simply passed from one citizen to another, with a non-evolutive carbon footprint. Even their design is environmentally friendly. Traditional banknotes are made of cotton paper, and free of oil-derived fibers. Their resistance can make them live for decades, according to their use and value. Next-generation banknotes, such as the polymer banknotes already in use in several countries such as Canada, may be seen as less planet-friendly, but that would be wrong. In fact, they are a more environmental alternative to the banknotes we have today. The reserve Bank of India published on the subject “The Life Cycle Impact Assessment results for the two types of notes indicate that replacing cotton-based notes with plastic-based notes would have significant environmental benefits. Polymer/plastic banknotes (and the waste from production) can be granulated and recycled into useful plastic products such as compost bins, plumbing fittings and other household and industrial products. The base material of polymer is a nonrenewable resource, but due to its recyclability, it has more than one life.”. The banknote you hold in your hand tomorrow, will perhaps be the compost bin in your yard the day after.
In some ways, the green revolution does imply the necessity for progress, making higher-performance devices, which therefore use less energy for the same result. The automobile industry is the perfect example for this case, as cars have been consuming less and less fuel over time, while increasing their performance. But in many other ways, going green implies reverting back to the previous way of operating, and not inventing new ones, in daily commuting, in farming and in purchases.