A Baidu apollo self-driving vehicle on display at the June 2018 Consumer Electronics Show (CES) Asia in Shanghai. Photo: VCG/VCG via Getty Images

The digital revolution sweeping the energy sector would seem poised to help reduce the greenhouse gas emissions that cause climate change. Progress in artificial intelligence and computing power, the plunging cost of sensors and other digital equipment, and rising connectivity could all make it easier to use clean energy sources and cut wasteful energy use.

Yes, but: Digitalization is a double-edged sword. Unless policymakers around the world act quickly, it could make the global energy system dirtier. Policies such as carbon pricing are needed to steer the energy industry toward digital technologies that reduce emissions rather than raise them.

Take self-driving cars, for example — a technology that could transform the transportation sector. Robot taxis could cut emissions in half by ferrying people to mass transit, facilitating carpooling, and running on clean electricity rather than petroleum. But the same study warns that they could also jack up demand for vehicle travel by making it cheaper and more convenient. For self-driving cars that aren't electric, those extra miles could cause transportation emissions to balloon. Left on autopilot, the spread of self-driving technology could actually lead to a doubling of transportation-sector emissions.

Similarly, a smarter power grid could make it possible to deploy much more intermittent wind and solar power. And digital technologies like programmable thermostats make it much easier for consumers to save energy. But if firms move more aggressively to use AI for predictive maintenance of fossil-fueled power stations rather than renewable energy plants, the fossil plants could live longer and produce power more cheaply. Moreover, oil and gas firms can harness greater computing power to drill more productive wells.

The bottom line: As the digitalization of energy accelerates, policymakers must encourage the industry to prioritize emissions reduction. Policies such as putting a price on carbon emissions would help push the market toward clean energy technologies, while leaving unfettered the free market innovation those technologies need to flourish.

Varun Sivaram is the Philip D. Reed Fellow for Science and Technology at the Council on Foreign Relations, the author of "Taming the Sun: Innovations to Harness Solar Energy and Power the Planet" and the editor of "Digital Decarbonization: Promoting Digital Innovations to Advance Clean Energy Systems" (out today).

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