Financial effects assessment
Definition
The financial effects assessment is a methodological framework designed to quantify the greenhouse gas (GHG) emission consequences resulting from the financial gains or cost savings generated by an ICT solution. It tracks how economic benefits from process efficiency improvements might lead to rebound effects through the re-spending of saved funds on activities with varying carbon intensities.
Key Characteristics
- Quantification of Rebound: Specifically targets the emissions induced by the reallocation of saved capital.
- Allocation-based Modeling: Utilizes pathways including consumption, savings, and reinvestment to estimate induced carbon impacts.
- Comprehensive Lifecycle Perspective: Integrates economic outcomes into the broader assessment of net-zero transitions enabled by digital technologies.
- Consequence Tree Integration: Designed to be incorporated into broader consequence mapping to ensure all financial implications are accounted for in net-impact assessments.
Applications
- Assessing the systemic environmental impact of ICT-driven operational efficiency projects.
- Identifying potential carbon rebound effects in corporate or industrial digital transformation strategies.
- Supporting net-zero transition planning by accounting for the indirect carbon emissions resulting from economic gains.
Mentions in Source
- “Guidance for assessing the GHG emissions consequences of the financial effects generated by an ICT solution is provided in Appendix IV.” — ITU-T L.1480 (Greening by Digital)
- “As many ICT solutions boost economic efficiency, any reinvestment of financial gains provided by the solution shall be included in the consequence tree for potential assessment.” — ITU-T L.1480 (Greening by Digital)