Exploring the economic and environmental impacts of the emerging digital economy

The evolution of E-Commerce created a new way of doing business. The environmental impacts of the new supply chains and digital economy distribution networks are examined. An integrated modeling framework is developed to categorize and compute disparate entities, material flows and costs throughout a complex system. The simulation methodology is launched from this platform and incorporates a hierarchical modeling tool based on an object oriented modeling paradigm. Numerous scenarios are created which total the major resources expended throughout a product's life cycle. Integration of software tailored to handle this inherent stochastic environment enables us to examine the impact of uncertainty. The resulting outputs depict the electricity, natural gas, fuel, and packaging expended plus retail/warehouse space used. An integrated Environmental Input Output Life Cycle Assessment (EIO-LCA) model assesses the full direct and indirect impacts of two disparate means of doing business: the new economy and the traditional economy. The EIO-LCA output portrays the environmental impact of a business model throughout the entire supply chain in terms of energy expenditures, carbon monoxide, lead, and up to 20 different pollutants and residue.; The scope is focused at the company level. Five distinct industries are examined and the distribution systems within each industry are contrasted. Comparative results are industry specific. Information-based industries demonstrate substantial energy and environmental savings in the delivery of goods. With access to large amounts of information, E-Commerce encourages more energy-efficient product delivery systems and reduces inventories and retail/warehouse space. Online grocery models do not compare favorably with the conventional method except in specific distribution cases. Air transport requirements should be kept below 20% for online-ordered personal computers and the volume must exceed 8000 to preclude an increase in environmental consequences. Internet-ordered books show consistent environmental benefits over the traditional methods book purchasing, due to reduction of passenger car travel and excess inventories.