Address Consumption Drivers
Current marketplace and social media business models often permit a one-way flow of user data and preferences to digital platform companies in an opaque manner. This information is then mined, transformed into targeted advertisements, and used to accelerate the consumption of products and services through persuasive digital technologies such as: (1) product customization; (2) influencer endorsements; (3) personalized advertising; (4) digital nudging; and (5) 24/7 opportunities for purchasing.
Additionally, digital technologies are optimizing supply chains and enabling efficiency gains by reducing the time, transaction costs or human capital needed for various tasks. This is lowering the costs of production and distribution of goods and as a consequence, creating “rebound effects”,49,50 by placing a downward pressure on the prices of goods and services, thereby enabling increased production and consumption. All of these catalysing factors, from persuasive technologies, efficiency gains, and associated rebound effects, need to be considered in any policy actions and economic accounting frameworks that promote sustainability through digital transformation. Measures at the systems-level, such as carbon prices and trading schemes, can represent the necessary tools to contain these factors and address indirect rebound effects. This must also include specific ethical frameworks combined with algorithmic transparency to govern digital nudging.