How a Low-Carbon Economy Increases Cybersecurity Risks

November 13, 2016

Since the 1973 Arab Oil Embargo, America’s reliance on imported oil has always been the primary energy security concern. Every president since Nixon has promised “energy independence,” and the goal of reducing oil imports has dominated the energy policy agenda. Transitioning to a low-carbon economy that moves off oil is thus not only necessary to address climate change, but also brings many energy security benefits. Around the world, renewable energy that is locally generated reduces the energy-security risks of fossil fuels that are globally traded.

Yet the transition to a low-carbon economy may bring new and different energy security risks of its own that have so far received relatively little attention. Among the most important is the threat from cybersecurity, as a low-carbon economy becomes more electrified and interconnected.

Electricity is vital to nearly every aspect of our daily life and the economy. Electricity is needed to produce food and purify water. Our financial and telecommunications systems do not function without it. It is key to transportation, energy production, hospitals and emergency services. Reliable electric power is also essential to our homeland security and national defense.

Moving away from fossil fuels is likely to require large-scale electrification, and then the generation of yet more electricity from low-carbon energy sources. The International Energy Agency predicts that the share of electricity in final global energy consumption will increase from 18% in 2014 to as high as 28% in the agency’s low-carbon scenario by 2050. Decarbonization of transportation very likely means more electric vehicles, which are falling in cost, growing rapidly in sales each month, and may even become mandated in many urban areas. Transitioning away from fossil fuels for heating in the residential and industrial sectors also means more electrification.

Along with increased electrification, the digital age also means that our electric devices—from household appliances to electric vehicles to increasingly ubiquitous smart sensors—are more and more interconnected through smart grids and the “Internet of Things.” Nearly 50 billion devices are projected to be connected to the internet by 2020, twice as many as last year, according to an FTC report from January 2015. The economywide benefits of greater interconnectedness are enormous: A recent McKinsey report estimates that digitization of services and physical assets like cars and buildings could add more than $2.2 trillion to the annual GDP of the U.S. by 2025. And increased efficiency and renewable capacity can be achieved through new connected devices and sensors.

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