Information Technologies and Telecommuting: Good for the Economy, Good for the Environment

Policymakers are in desperate need to develop a sound and comprehensive energy policy.  However, the steps being considered – investing in more expensive alternative fuels, carbon taxes, cap-and-trade schemes, conservation and so on – all require consumers to make sacrifices.  This ConsumerGram looks at the evidence and finds that increased investment and use in information technologies, such as broadband services, can facilitate telecommuting and produce significant economic and the environment benefits, without requiring consumers to sacrifice something else.  We estimate that over the next decade, increased use of telecommuting could cut greenhouse gas emissions in the United States by about 588 million tons, while increasing consumer benefits, investments and jobs.


Commuting to Work

The use of personal vehicles accounts for about half of greenhouse gas emissions.  In fact, the typical personal vehicle produces 5.0 tons of carbon dioxide annually, as well as methane, nitrous oxide and various man-made gases. The roads needed to move vehicles are also a threat to the environment, as they replace forests and affect animal habitats. These roads are usually constructed with petroleum components, their maintenance expends energy and resources, and they produce hazardous runoff into nearby streams. 


Broadband services help provide seamless data, video and voice communications, permitting workers to use their homes in the same manner as business offices – referred to as telecommuting and telework.  Telecommuting is the use of telecommunications technology to allow employees to work from their homes and avoid the use of transportation to commute to and from work.  Telework is the use of telecommunications to work anywhere other than the home office, such as telework sites satellite offices, and remote locations.  Another group not covered by either term is home-based workers, who consist of self-employed workers who work at home instead of renting office space.  Based on data through early 2006, only 2% of workers telecommute full time and 8% operate businesses from home, suggesting that 10% regularly work at home.  However, a recent study by the American Consumer Institute found the potential for telecommuting could be twice as high as today’s level.


Economic Benefits

For workers, the total time lost commuting to and from work is the equivalent of 17.2 million jobs lost.  If we monetize the value of this lost time and include the cost of the vehicle (gas, depreciation, insurance and maintenance), the cost of commuting would be nearlyNumerous studies find that telecommuting, facilitated by broadband services, can lead to many economic benefits that accrue to workers, consumers, businesses and society, including:

·   Increased Job Satisfaction and Morale;

·   Increased Quality of Life and Time;

·   Increased Productivity;

·   Decreased Absenteeism;

·   Better Prepared for Weather / Emergencies;

·   Reduced Employee Turnover;

·   Reduced Training Costs;

·   Reduced Construction and Maintenance; and

·   Increased Job Opportunities for the Elderly and Disabled.


Environmental Effects

The effect on the environment from telecommuting is equally stunning.  Assuming fuel efficiency of 21 miles per gallon, commuting to work using personal vehicles consumes 44 billion gallons of gasoline per year.  In terms of greenhouse gasses, private vehicles used during commuting release 424 million tons of carbon dioxide into the atmosphere each year.  In addition, other emissions include 23 million tons of carbon monoxide, 1.8 million tons of volatile organic carbons and 1.5 million tons of oxides of nitrogen each year.  The direct and indirect effect of telecommuting on the environment is significant and includes:

·   Reduced Gasoline Consumption;

·   Reduced Energy Used in Building Roads;

·   Reduced Energy Used in Constructing Office Buildings and Warehouses;

·   Reduced Energy to Operate, Heat and Cool Office Buildings and Warehouses (Net of the Home Office);

·   Reduced Run-off and Disturbance in Natural Habitats;

·   Reduced Pollutants and Greenhouse Emissions; and

·   Reduced Traffic Congestion, Which Saves Energy, Reduces GHG Emissions.



The American Consumer Institute study measured many of these direct and indirect effects of telecommuting on the environment and estimated that over the next ten years, the incremental cumulative benefit would reduce greenhouse gas emissions by 588.2 million tons.  To put this into context, there is approximately 7.9 billion U.S. tons of greenhouse gas emissions annually emitted into the atmosphere in the U.S.  These greenhouse savings are made possible because of high-speed broadband services that permit workers to be productive and communicate seamlessly with workers, suppliers and customers.  The study also reviewed some of the potential benefits of e-commerce, e-materialization, telemedicine, teleconferencing and distance learning and estimated that more than 1 billion tons of emissions that could be eliminated thanks to broadband services.  Similarly, the study provides evidence that increased investment and use of information technologies, including broadband services, is inextricably linked to increased consumer welfare, productivity, economic output and jobs, as well as, lower inflation.



This ConsumerGram has discussed the many economic and environmental benefits of telecommuting.  These benefits, as well as other information technology applications mentioned in the American Consumer Institute study, come without sacrificing economic output and productivity.  Thus, these technologies can lead to less pollution and oil consumption for society, increased benefits for consumers, and a better work life balance and opportunities for the employees, especially for the disabled, stay-at-home parents, and rural residents.  Encouraging the development of energy-saving technologies, including broadband services and applications used for telecommuting, could become public policy initiative, because it would help the environment while augmenting economic growth. 


Suggested Readings

  • Joseph Fuhr and Stephen Pociask, “Economic and Environmental Benefits, the American Consumer Institute, Reston, Va, October 31, 2007.
  • Joseph Romm, “The Internet and the New Energy Economy,” Center for Energy and Climate Solutions, Global Environment and Technology Foundation, 2002.