The Double-edged Sword of GPT for Business
Due to its tremendous advantages such as efficiency, speed, and accuracy, which are of great benefit to businesses, GPT*, especially one of its models, ChatGPT, has attracted much attention in the business world and is widely used. However, the benefits of these great language models come with a significant environmental footprint.
As we are in the age of the Anthropocene where human activities have begun to significantly impact the Earth's climate and ecosystems, companies can no longer make decisions based solely on what is beneficial to the business but must also consider the impact of their decisions on the environment.
Could an environmental fee for businesses using GPT lead to more awareness of the tool`s downside?
The ChatGPT Boom: A Powerhouse in Your Business Pocket
Let´s be honest: who has not used ChatGPT to facilitate daily tasks at work? Yes, we all have, and it looks like the tool is here to stay. ChatGPT has set the record for the fastest-growing user base in the history of a consumer app. It gained one million users in just five days. ChatGPT`s website has surpassed 10 billion visits since its launch in November 2022, with 60 million daily website visits and counting.
It is fair to say that the Swiss army knife of AI brings a transformative advantage to businesses through its power, versatility, and simplification of complex processes, resulting in huge overall business value.
However, the advantages of GPT can easily mask the dark side of this tool. ChatGPT emits around 8.4 tons of carbon dioxide per year, more than double the amount emitted by an individual, namely four tons per year. Added to this is the water consumption, electricity requirements and the hardware used (or the rent for the cloud service).
So, how can companies justify using GPT in the first place?
Can Techno-Optimism pave the way for sustainable AI use?
There are already efforts to make GPT more environmentally friendly (energy efficiency in data centers, training efficiency, fine-tuning, etc.). Still, none of them create awareness in the actual usage of the tool itself.
Even if GPT was like a Swiss army knife that could make business tasks and processes easier, there should be incentives and penalties for the actual usage to create awareness of its environmental impact.
How can we ensure a win-win situation where value is created (primary contribution to sustainability) and the disadvantages are mitigated (secondary contribution to sustainability), rather than the current win-lose situation where only the business benefits but the ecosystem suffers?
Creating sustainable business value
To create business value (profit), the company`s willingness to pay for the outputs it produces must be higher than its willingness to pay for the inputs it consumes.
By introducing a usage-based environmental fee, companies could be incentivized to consider the ecological impact of their operations as well as their pursuit of profit. Companies would become more aware towards the outputs produced and could lead to a reduction of unnecessary high emissions.
The demand for sustainable practices is likely to increase from stakeholders as more and more companies are in the CO2 emissions spotlight. Businesses can no longer afford to ignore the environment just to increase their own profit, the potential damage to their reputation is too costly.
The Environmental Fee: A Move Towards Accountability
By introducing an environmental fee, where a certain percentage of the GPT usage cost would be charged to businesses could lead to more awareness. There could be a bonus system in place where companies can get discounts (=incentives) if they opt for renewable energy, only use the data required for the use case, choose the smallest possible models which are more energy-efficient, and apply energy-saving calculation methods and critically question whether the project really needs GPT and reach for less energy-intensive solutions when possible.
Mitigating The Rebound Effect
This environmental fee would not provoke a possible rebound effect (find ways to use resources more efficiently and end up consuming more of these resources, partially or completely negating the expected environmental benefits of increased efficiency). If there is an environmental charge for the use of GPT, the rebound effect would not immensely exceed CO2 emissions, as companies would still need to pay a fee on the usage.
Providing Equity for Present and Future Generations
Introducing this fee would also mean a design that balances intragenerational and intergenerational equity. For example, the revenue from the fee can be used for both immediate environmental protection measures and long-term sustainability projects in companies. This approach recognizes the need to address current environmental issues while preparing for future uncertainties.
The Balance of Progress and Responsibility
If GPT continues to evolve at its current rate, we can safely assume this tool will soon be a permanent fixture in the toolbox of many companies. The biggest responsibility for companies adopting GPT is not to be swayed by the hype or the fear of missing out on this miracle tool.
The environmental fee would create a balance between paying for the environmental impact and improving the efficiency and added value of a company. It would be a step towards cultivating a culture of sustainability, ensuring that the benefits of GPT are realized without compromising the health of our planet.
Implementing such a fee would require careful consideration of the ethical and practical aspects, as well as transparency from both sides, business and GPT side, but it would be a step in the right direction, towards holding businesses accountable.
Author: Veronika Burkhardt, Student of MBA Sustainability Management Class 1 (2023-2025)