The term “externality” refers to any effect, positive or negative, on an uninvolved third party because of the actions of a different party. Externalities create economic inefficiencies because the cost or benefit to the third party is not accounted for by the deciding party.
In our economic system, there are a few ways in which we force those deciding parties to account for externalities. A free market does not, by definition, account for externalities, so government bodies step in to provide relief for third parties who are affected.
Most commonly, governments subsidize positive externalities and tax negative externalities. Transit systems and public education are examples of subsidizing positive externalities, where communities of people are the third parties. A carbon tax would be an example of taxing a negative externality, where the entire biosphere is the third party.
However, money isn’t the only way governments deal with externalities. Limiting laws, like those that limit the blood-alcohol content and speed of drivers, are examples of non-monetary methods of non-monetary methods for forcing individuals to account for the costs of speeding or drunk driving.
Almost every action has some form of externality embedded in it, and governments rarely try to tackle all of them. Thus, capital is allowed to accumulate into the pockets of those who exploit the largest negative externalities.
For example: Nike sells shoes. The price of the shoe does not equal the cost of the shoe, because Nike dumps the costs of production into pollution, exploited labor, resource extraction and so on. Nike’s workers and the ecosystems they devastate bear most of the cost of the shoe, while Nike only accounts for a fraction of it.
Buying shoes from Nike is a negative externality because neither the consumer nor Nike accounts for the full cost of the shoe. A simple enough fix for this inefficiency would be to tax Nike an amount equal to the costs of the negative externalities. (Of course, this only takes into account monetary costs and economic efficiencies, not justice or inequality).
A much tricker beast is the energy-guzzling expanse of the internet. It is very difficult to assess the full energy use of the internet in any given year, especially given how rapid changes take place. Data traffic increases at a much higher rate than the number of internet users due to: the trend towards portable computing devices and wireless internet access, an ever-increasing bit rate for content (more video streaming, heftier websites, digitalization of TV), an increasing amount of time spent online by users, and an increasing reliance upon the internet to traffic systemic data for institutions.
These changes have been enabled by rapid technological innovations in data traffic efficiency. Importlanty, increasing data traffic efficiency does not mean that we are saving any energy. Increases in the efficiency of a resource has historically lead to greater use of that resource. This is called the Rebound Effect. Imagine if your car could only go about 1 mile per gallon of gas. You probably wouldn’t use it very much, because gas is expensive. This principle can be applied to the historic increases in internet usage: as data has become more efficient, we traffic more data, until it becomes monetarily worth it to traffic nearly all data through the internet. While the energy efficiency of the internet is often hailed as the solution to a rapidly growing demand for internet energy, it’s actually the cause of it.
This creates a huge negative externality, and therefore economic inefficiencies. The price of browsing Tik-Tok or switching to a Zoom meeting instead of an in-person meeting do not include the costs of increasing the demand for data traffic energy and then becoming reliant on the corresponding supply.
A system could be said to be in a state of sufficiency when it can improve it’s outputs only by improving the efficiency of its inputs. One consequence of this negative externality is that the internet will never reach a state of sufficiency unless it reaches a limit to it’s consumption. Cars could be said to be in a state of sufficiency, because there are limits to speed, weight, size, and costs of cars. The internet has no such limits, and our energy use for the internet will continue to grow until we accept self-imposed limits or run out of energy.
A “speed limit” for the internet could potentially solve this inefficiency, curbing our energy use and allowing innovation in data traffic efficiency to be the only driver of increasing traffic. Such a speed limit could take many different routes. We could outlaw the traffic of videos through the internet, impose an energy budget for internet services, or raise internet energy prices, to list a few examples. Each of these would affect different users differently, and the solution should take inequality to internet access into account.
How we would traffic certain loads of data might change under a strict speed limit. We might see a resurging interest in local libraries, with collections of videos to borrow without having to stream from the internet. We might see an emergence of shared wireless networks in urban areas, creating much more efficient data traffic alternatives to private networks. Ingenious, low-tech solutions can be readily observed in poor countries who have been accessing the internet for years despite very low energy budgets.
A speed limit would likely also be celebrated by programmers who would no longer abandon and re-invent programs to match every new technological innovation in data speed. Instead, the creativity of programmers would become invaluable as optimization might become the only medium for innovation. Tools could become standardized, compacted, and widely available. Barriers to entry into the world of programming could be minimized because the speed limit would cap the complexity of basic data traffic, allowing for a greater collective understanding of the movement and ownership of data.
The potential benefits to a self-imposed speed limit for the internet are obvious. The barrier to its actuality is also very clear: Capital, and its incessant lurch towards growth at all costs.
Information for this piece was based on sources gathered by Kris De Decker. Check out Low-Tech Magazine for more hot takes on technology.