3.4 Technology socio-economic system Lithium and copper extraction consumed over 65% of local water supply in Salar de Atacama, Chile, depriving Indigenous farming communities of resources on which their livelihoods depended.Demand for computing power is doubling every three to four months. In 2027, global AI demand could lead to withdrawal of 4.2-6.6 billion cubic metres of water – about half UK’s annual withdrawal. 70% of critical mineral extraction may be exposed to droughts by 2050. Global market for AI expected to expand by 169% in the next three years, with AI data centre capacity growing at 40+% a year.Majority of mines and production sites for lithium and copper are concentrated in areas facing water stress (50% and 80%, respectively).Data overview – technology system BOX 5 Telecommunications, internet and digital devices have changed the way the world works and interacts. Today, there are more mobile phones than people98 and two-thirds of the world’s population has access to the internet, 93% of whom use social media every month.99 As global living standards rise and innovation continues at pace, a continued surge in demand for devices and connectivity is likely. However, communications and digital technologies are resource- and fixed asset-intensive to develop and operate. With innovations such as generative AI, the demand for computing power is doubling every three to four months.100 Due to the reliance on fixed assets and complex networks, climate hazards threaten the stability and continuity of the technology socio- economic system. Hardware manufacturers, telecommunications providers and data centre operators rely on capital-intensive fixed assets that can be difficult to relocate. These facilities are integral to corporate operations, yet they are highly vulnerable to climate hazards such as floods, tropical cyclones and extreme heat, which pose risks to service delivery and operational continuity. Heatwaves themselves have a profound impact on the lifespan of electronic devices and components as well. For example, cell phones with lithium- ion batteries stop working above 35°C to avoid overheating, while exposure to prolonged extreme temperatures above 30°C can cause premature lithium-ion battery degradation, accelerating depleting corrosion reactions. This is particularly important for electric vehicles, as degraded batteries can cause cars to lose up to 20% of their range.101Extreme heat and tropical cyclones threaten infrastructure and devices Business on the Edge: Building Industry Resilience to Climate Hazards 33

Business on the Edge 2024