European leaders talk cleaner chips, geopolitics at SIEPR

Computer chips, the quiet workhorse of modern-day life, have a dark side: How they are made, the energy they need to run, and what happens after they die are bad for the planet.

The Stanford Institute for Economic Policy Research (SIEPR) recently teamed with a delegation of European leaders to host a discussion of the semiconductor industry’s sustainability dilemma and what to do about it. The Dec. 6 event was followed by a town hall with Mark Rutte, the prime minister of the Netherlands. Rutte answered questions from Stanford students on various topics, including America’s push to bolster domestic chip manufacturing, Europe’s migrant crisis, and what’s different about working in politics versus business.

The back-to-back events highlighted SIEPR’s mission as a convener of academics, government officials and business leaders who are focused on economic policy in the United States and around the world.

“When you work in government, you feel that there really is a sense of serving society,” said Rutte, who spent a decade working at consumer goods giant Unilever before moving into politics at the age of 35. He will step down as Holland’s leader, having declined to run for re-election after 13 years in office, once the country’s leaders form a new coalition government.

During the event discussions on semiconductor sustainability, the message was clear: If nothing is done, the problem will only get worse.

“We have to act [now] and the first thing we have to do is create awareness,” said Jan Jambon, the minister-president of the northern region of Belgium known as Flanders. Many consumers, he said, don’t realize that the computer chips that power their daily lives — phones, TVs, and cars, for example — harm the environment.

And they don’t always know that green technologies like electric cars or solar panels, while helping to address climate change, also depend on energy-intensive chips and environmentally unsustainable processes.

Devices with computing components are by far the biggest contributor to semiconductors’ carbon footprint, followed by companies in the silicon chip supply chain and manufacturers. In 2021 alone, semiconductor output equaled 500 megatons of carbon dioxide emissions worldwide.

Semiconductors are “the new oil of the world,” said Srabanti Chowdhury, an associate professor of electrical engineering at the Stanford School of Engineering who participated in a panel discussion of the problem and how to make semiconductors more climate friendly.

“We cannot deny that we are all hungry for [technologies that have] more and more speed, more accuracy,” she said. But satiating that appetite, she said, risks exacerbating the environmental harms.

“Any new efficiency or any new functionality that we demand constantly needs the semiconductor processing [capability] to become even more complex,” she said. She called semiconductor sustainability “the challenge of our time” and one that was not nearly as urgent even a decade ago.

The issue has become so important because, as products get cheaper to make and distribute, the goods that now drive economic growth are embedded with chips, said Mark Lemley, a SIEPR senior fellow and the William H. Neukom Professor of Law at Stanford Law School, who delivered the keynote speech.

“Semiconductor chips and computers have become the central part of economics, and that means that sustainability becomes even more important in this industry than it otherwise would be,” Lemley said. Lemley is also the director of the Stanford Program in Law, Science & Technology, which announced its new Stanford Center for Responsible Quantum Technology during the Dec. 6 visit by Dutch leaders.

View recordings of the discussions and keynote here.

View a recording of the town hall here. 

‘Moving in the right direction’

Speakers and audience members offered plenty of ideas on how to make semiconductors more climate friendly. As Mark Duggan, The Trione Director at SIEPR and The Wayne and Jodi Cooperman Professor of Economics in the Stanford School of Humanities and Sciences, noted in his opening remarks, “The success of the chips industry relies on three elements: business, engineering, and geopolitics.”

The consensus was that change is needed on all three fronts. To prod businesses, speakers described how policymakers could dangle more tax incentives and reduce the government red tape that makes it costly to go green. Consumers, they said, have a role to play, too, in signaling a willingness to pay higher prices for sustainable products. And on the engineering front, manufacturers could take steps today that would reduce energy consumption by as much as 75 percent.

But significant progress can only be made through global cooperation — an unlikely outcome given the current state of geopolitics and the race by the U.S., China, and other countries to bolster domestic chip manufacturing because of the money to be made and out of concerns that foreign-made semiconductors pose national security risks.

There are reasons to be optimistic, Chowdhury and others agreed.

Lemley, for example, pointed to some of the ways that chip-powered technologies, despite their environmental toll, have replaced ways of working and living that exact an even bigger climate price. People hop on a Zoom call instead of a carbon-spewing flight, he said. Or, they shop online instead of driving to the store in their gas-powered cars.

“Packages delivered on a well-routed algorithm is a much more efficient way to actually move goods from place to place than having a bunch of people drive to shopping malls and suburbs and search around looking for what they want,” said Lemley.

“We are moving in the right direction,” he said.