List Forum für Wirtschafts- und Finanzpolitik

Digitization is seen as having great potential for reducing energy consumption and the associated environmental effects. However, the empirical evidence compiled in this paper suggests that this is often accompanied by only minor effects. For example, the energy savings effects of smart home and smart metering technologies tend to be moderate, in the low single-digit percentage range. The environmental effects associated with energy savings are correspondingly low. With regard to carbon dioxide emissions, due to the waterbed effect, no reduction effects at all are to be expected in sectors integrated into the EU emissions trading system. This paper argues that, in combination with the establishment of tolling systems, the largest effects can be expected in the transport sector, which is not yet integrated into EU emissions trading.