The Environmental Cost of Convenience
How Amazon and e-commerce may be harming the environment and what to do about it.
E-commerce hit new records during the 2019 US holiday shopping season. Online shopping grew by nearly 19% relative to 2018 based on early data reported by Mastercard. The sound of a delivery truck’s engine shutting down, its sliding door opening as a package is retrieved, then the engine starting up again has become one of the most familiar sounds of the holidays. This isn’t just a holiday phenomenon. E-commerce retail sales are steadily growing as a share of total retail sales. They recently climbing past 10% of overall retail sales. That’s a significant fraction, but there’s still a lot of room for growth.
Not only is e-commerce growing, but it’s arriving more quickly and is split up into more packages. Amazon has led this trend, providing its 100 million US Amazon Prime subscribers with free one-day delivery for many items with no minimum order size.
The ways in which ships, planes and trucks deliver goods to consumers is rapidly evolving. This impacts transportation energy demand and the environment in complex ways. Whether this impact is positive or negative has emerged as an active debate. I want to explore what we know and whether policymakers need to get more involved. I’m going to focus in particular on how e-commerce has affected the last-mile, getting retail goods to our doorsteps.
Rapidly Eliminating Car Trips
Several years ago, some were arguing that e-commerce could reduce energy demand and cut greenhouse gas emissions. In the world before e-commerce, consumers had to get themselves to brick-and-mortar stores to purchase items and bring them home, often in single-occupant vehicles. The pro-environment argument for e-commerce is that a large number of trips in single occupant vehicles are replaced by a smaller number of trips in delivery trucks. An estimate from Walmart shows that for single item purchases, the greenhouse gas emissions from shipping the item to someone’s home are less than the emissions from a dedicated trip in a personal vehicle to purchase the item.
Speeding up e-commerce deliveries could eliminate even more trips to the store. I think of my unanticipated, but common, late night drives to the grocery store to pick up a gallon of milk for the morning as an example of a short-notice trip I could replace with a faster delivery to my door.
However, the Walmart estimates also show that in many realistic scenarios, the greenhouse gas benefit of e-commerce goes away. For example, if someone’s brick-and-mortar trip combines multiple stops and they purchase multiple items then greenhouse gas emissions per item drop below emissions from home deliveries.
These rough estimates don’t consider how e-commerce could be impacting how much stuff people buy. Just as autonomous vehicles could increase vehicle miles travelled by lowering the cost of driving, falling shipping costs could be increasing the number of items being purchased and shipped.
Without studies based on real-world data, we don’t know how consumer behavior is actually being impacted by e-commerce. I’m concerned that e-commerce has become a major driver of transportation energy demand and pollution, and that major public policy gaps are making matters worse.
Cleaning Up E-Commerce
What really worries me about e-commerce is that many of its costs aren’t paid by sellers or buyers. Instead, society pays the costs. This includes climate change, the health effects of air pollution and traffic congestion. Government hasn’t put in place the sorts of policies that would require the buyers and sellers engaged in e-commerce pay these costs.
Fortunately, there are many options to make things better.
Government could engage consumers by making sellers share emissions estimates for each shipping option. Last time I ordered an item through Amazon I was presented with three shipping options. All free. I went with the quickest one without considering when I really needed the item. (Ironically, I was purchasing energy-saving LED light bulbs for my refrigerator.) I would have liked more information about the environmental impact of my decision. Research has found that altruistic appeals are not very effective in aggregate, but perhaps this sort information could raise public awareness that the convenience of e-commerce comes with an environmental cost.
Carbon pricing, an approach popular with economists, could be a powerful part of the solution since it would raise the cost of fossil fueled transportation. This could drive a shift to lower carbon transportation options and reduce wasteful trips.
Another approach, particularly for congested, urban areas, is to ban or tax delivery traffic at certain times of day. London is a great example of this. In 2019, the city complemented its inner city congestion pricing with a new ultra low emissions zone. Vehicles that don’t meet specified emissions standards must pay a fee to enter the zone. This includes all diesels made before 2015. The policy is aimed at improving local air pollution, but could also produce greenhouse gas co-benefits if trips into the zone by older cars and trucks decrease.
Finally, government can more aggressively regulate the sorts of medium- and heavy-duty vehicles that are used in e-commerce. The California Air Resources Board is pursuing this option with a proposed Advanced Clean Trucks program – a zero emissions vehicle standard for truck manufacturers. The policy is so-far relatively low profile, but could be very significant, especially if other states follow suit.
Governments have a lot of work to do to limit the harms of e-commerce, and they have lots of options. Governments should act urgently, before the remaining 90% of retail sales enter the e-commerce network.
Keep up with Energy Institute blogs, research, and events on Twitter @energyathaas.
Suggested citation: Campbell, Andrew. “The Environmental Cost of Convenience” Energy Institute Blog, UC Berkeley, January 13, 2020, https://energyathaas.wordpress.com/2020/01/13/the-environmental-cost-of-convenience/
Andrew G Campbell View All
Andrew Campbell is the Executive Director of the Energy Institute at Haas. Andy has worked in the energy industry for his entire professional career. Prior to coming to the University of California, Andy worked for energy efficiency and demand response company, Tendril, and grid management technology provider, Sentient Energy. He helped both companies navigate the complex energy regulatory environment and tailor their sales and marketing approaches to meet the utility industry’s needs. Previously, he was Senior Energy Advisor to Commissioner Rachelle Chong and Commissioner Nancy Ryan at the California Public Utilities Commission (CPUC). While at the CPUC Andy was the lead advisor in areas including demand response, rate design, grid modernization, and electric vehicles. Andy led successful efforts to develop and adopt policies on Smart Grid investment and data access, regulatory authority over electric vehicle charging, demand response, dynamic pricing for utilities and natural gas quality standards for liquefied natural gas. Andy has also worked in Citigroup’s Global Energy Group and as a reservoir engineer with ExxonMobil. Andy earned a Master in Public Policy from the Kennedy School of Government at Harvard University and bachelors degrees in chemical engineering and economics from Rice University.
Personally, my dislike of Amazon greatly impacts my shopping and shipping behavior. I only buy stuff there I can’t source locally, I wait and wait until I can’t wait on it anymore, I bundle things together and choose the slowest shipping, and I look all the time for a better alternative. But I also have an environmental/homesteading blog, on which I can’t help but mention essential books. If I mention them I really have to link them, since not everyone will get them from the library like I suggest. Since I link them, people are going to buy them, and when they do I want at least some of that money to pay for the blog and then go to The Cool Effect. So I’m using Amazon Associates, because they’re the only ones who have everything I link and also a well set up affiliate program. But I don’t like it.
Another difference, which I’ve noticed is getting worse: small items are showing up in huge boxes stuffed with inflated plastic bubbles. I doubt the analysis considered the resources required to produce and transport these materials, or the fuel required to move all the single-use cardboard and plastic to recycling or landfill.
Which raises another issue: how, exactly, did Walmart conduct its analysis? (The linked page didn’t say.) This type of analysis inevitably involves numerous subjective choices that can determine the results, such as the choice of analytic boundaries (as noted above) and the types of vehicles and driving behavior they assumed for delivery and consumer use. So, caveat online emptor.
Over the holiday sales my wife and i did much online ordering, for luggage and shoes the deals were tempting.
She ordered 12 items of luggage, large and small, I ordered 8 shoes. dress and casual. They were each delivered separately. We have returned 6 of the shoes, and 5 of the luggage items. If we had bought at a B&M store we would have checked the fit, feel and color of the shoes, and the size/shape/ texture of the luggage. The returns happened in two trips – same shopping mall. The deliveries were in 20 UPS and FedEx truck trips.
The cost of convenience was over 15 truck deliveries!!
One answer to the problem cited in this blog: Amazon has just announced that it has ordered 100,000 PEV delivery trucks!
Just think of how the demand for electricity will dramatically increase when these vehicles are in service – not just by Amazon – but also by FEDEX and UPS.
“In a move to slash carbon emissions, Amazon will purchase 100,000 Rivian electric trucks that will start service as early as 2021.
The giant retailer plans to have 10,000 of the new electric vehicles on the road as early as 2022. That would save 4 million metric tons of carbon per year by 2030, said Jeff Bezos, Amazon’s founder and chief executive….
THE ELECTRIC TRUCK
The R1T pickup is designed for both everyday transit and as a capable adventure-ready off-roader.
Rivian has optimized the truck for off-roading. Each wheel is powered by an independent electric motor. The truck’s axles and the standard air suspension will allow for 10.6-inches of articulation at each corner. The truck has five ride heights that accommodate situations where the vehicle must climb over rocks or lower itself to clear branches. Rivian said the truck will go from zero to 60 mph in 3 seconds. The truck promises at least an 11,000-pound towing capacity.
Rivian will have a 400-mile range in its top-tier truck and SUV models. The R1T will come with a choice of 105 kW, 135kW or 180kW battery packs. Those equate to about 230 miles, over 300 miles and over 400 miles of range. Rivian predicts that using a DC fast charger, owners can get 200 miles of range in 30 minutes. The company has designed the vehicles around Level 3 self-driving technology. That is the industry label for cars that can drive themselves with occasional human intervention.
Pricing for the R1T starts at $69,000. The R1S starting price is $72,500. The company has previously said it expects six of its models to be on sale by 2025.”
I’m sure the pursuit of EVs by Amazon and friends isn’t only — or even primarily — about emissions. The EV vehicle technology is simply better than ICE, because of reliability, longevity, and cost of operation. They make perfect sense for fleets.
Regarding single-purchase versus multiple-purchase items, note also that the high street, which still exists in most European countries, and the shopping mall both involve a single road trip by the consumer to a number of destinations which are then visited on foot, to collect multiple items. The Amazon prime example means that a consumer is likely to purchase items more at different times, rather than saving up purchases to make on a shopping trip.
I am of course in favor of imposing on all transactions the full cost of emissions and other environmental impacts, including e-commerce and shipping to brick & mortar stores. But with Amazon I have recently been shipping all my purchases to an Amazon locker at a local Whole Foods, which I then pick up with our EV. Some online fascades for brick & mortar stores also incentivze picking up items shipped to stores.
What I do not know is the degree to which purchasing intensity itself is heightened by convenience. Surely, there is evidence of consumers offsettiing their recycling or adopting PV by consuming more stuff or electricity. But isn’t that the key problem? The consumption of more stuff, something which e-commerce just enables? There is a hefty reuse subeconomy in the form of eBay and Craigslist, but our culture considers such consignment shopping sordid, and recycling is seen as a justification for really getting that latest XYZ.