Saturday, April 24, 2010

Reducing Carbon Foot Print in IT

Carbon is fast becoming a currency that global organizations cannot ignore. With carbon cap-and-trade schemes either being planned or implemented by a growing number of national and regional authorities, the carbon impact of an organization’s operations is becoming a measurable cost. And after the global recession, with the focus still very much on the bottom line, carbon impact management is closer than ever to becoming a universal boardroom issue. But who, within an organization, is responsible for mitigating the carbon cost? Certainly, this question does not yet have a straightforward answer. But one thing is clear – however organizations choose to deal with the carbon question, CIOs are bound to be involved. This is because – even if they are not given primary responsibility for managing organizational carbon impact – CIOs will need to ensure carbon reporting systems remain up to date with legislative requirements. On top of that, there is a growing realization that ICT itself has a significant role to play in carbon impact management. The European Commission recently announced1 the information and communication technologies (ICT) sector should lead the transition to an energy efficient economy. It called for Europe’s ICT sector to:

• Agree on common energy consumption measures
• Overtake the EU’s 2020 targets by 2015
• Make innovative use of ICT to make Europe a low-carbon economy

The EC said replacing 20 per cent of European business trips by video conferencing could save more than 22 million tons of CO2 per year. It also said that broadband facilitating increased use of online public services could save two per cent of total worldwide energy use by 2020. It is clear that CIOs need at least to know all the facts, if they are to make an informed decision about the role they will play. So where should they begin?

Carbon Emission and the Bottom line:-
The poster child in the war against carbon emissions has been ‘green’ energy. But while the likes of hydropower, biomass, wind and solar energy may have a knack of exciting the headline writers, none have yet become affordable mainstream technologies. And while the race to find ways to replace our reliance on ‘dirty’ fuels needs to go on, the place to look for short-term emission cuts is in energy efficiency. Unglamorous it may be, but 40 per cent of the carbon reduction to be achieved by 2020 and beyond needs to come from precisely this source2. And central to the story of how business will meet those targets is IT. When asked to provide an example of environmental irresponsibility, the airline industry is never far from people’s lips. Yet global CO2 emissions from IT are roughly on a par with those pumped into the atmosphere by planes. What’s more, the opportunities to use technology to cut emissions are vast. A recent report notes that IT could contribute as much as 15 per cent of global emissions reductions by 20203. Of course, the idea of cutting the energy consumption associated with IT is not new. It’s a target that has featured in the CSR programs of big business for some time. What is new however is the growing realization that an energy efficient approach to IT is far more than a PR tool. Instead it is a bottom-line issue. It doesn’t just look good on the corporate website, it can help save serious sums of money. Consider the 15 per cent figure mentioned above. That equates to €600 billion in cost savings.

After Copenhagen:-
When world leaders met to discuss climate change at the Copenhagen Summit, carbon reduction was one of the topics under discussion. It played a central role in the Copenhagen Accord, which was the key output from the summit (for more details, see Reference Section “Copenhagen: implications for global business”). As part of the Accord, countries were invited to submit their own carbon reduction targets by the end of January 2010. Fifty five did so. They include the US, all EU countries and China, as well as major emerging economies such as Brazil, Indonesia and India. Between them these nations emit 78 per cent of the world’s greenhouse gases. So although there were notable absentees – Brazil was the only South American nation to volunteer a pledge, and just six out of 55 African countries did so – and although the combined country targets are insufficient to cap the temperature rise at the desired two degrees, this was still an important step on the path towards ultimately achieving a legally-binding global agreement. (Though just when such a step will be taken is another matter.) Crucially, the Accord also provides for scrutiny to monitor whether or not countries meet their emissions reductions targets – a key point of difference between developing and developed countries throughout the negotiations. Unsurprisingly this was an issue that the US was particularly keen on in relation to China. As The Economist puts it: “Unless China can be shown to live up to its promises, it will be very difficult to get a climate bill through America’s Senate.”

Local Action – A Snapshot of Carbon reduction activity around the globe:-

Companies will be required to measure all electricity, gas, and oil use (excluding transport and travel). They will then purchase allowances equal to their annual emissions. Within that overall limit, individual organizations can decide on the most cost-effective way to reduce their emissions. Just like most cap-and-trade schemes they will then have the ability to buy extra allowances or invest in ways to cut the number of allowances they need to buy.
A league table is then created, with credits being handed out based on that year’s performance. An organization at the top of the table will receive repayments totaling more than has been paid for the allowances in the first place, while those at the bottom will receive repayments that are less than the amount paid out. In other words, organizations in the bottom half will lose money. Analysis Mason estimates that for the biggest companies, being ranked at the bottom of the table could amount to a financial penalty of over £120,0007.

How IT can cut Enterprise Cost:-
Several technologies are leading the way in helping businesses save hundreds of millions of pounds in the process of cutting their emissions.

Green data centers
One of the most exciting is data centre virtualization, a technology that slashes the number of servers required to run your organization. In the case of BT, data centres used to account for a significant chunk of the company’s carbon emissions. However the average server is utilised at a tiny percentage of its overall capacity. By ‘virtualising’ these servers, or by asking each server to carry out an increased number of tasks at the same time, utilization shoots up, and this means the number of servers needed slumps. In one of BT’s data centers, the number dropped from 1,500 to around 100, saving £600,000. Large numbers of servers create lots of heat which, in turn, means the need for power-hungry air conditioning systems. BT has redesigned its data centers to allow fresh air to cool servers. Air conditioning is only used on the rare occasions when the temperature reaches 28°C or above.

Flexible working and home working
Flexible working and home working are more familiar approaches to cutting power use(and improving productivity) yet many organizations still make little use of them. At a time when there’s an ongoing pressure to find cost savings, there’s a strong argument to take a fresh look at the efficient use and potential rationalisation of building space. BT’s own results make a persuasive case. By enabling over 13,700 employees to become home workers the company saves €750 million a year in property management costs.

Conferencing and collaboration tools
Using conference calls to replace face to face meetings has had similarly dramatic effects within BT, saving the company an estimated £183 million in 2008 and saving over 50,000 tonnes of CO2.
Collaboration technologies have the same effect, allowing people to work together without the need to travel to the same location.

Tips to Decarbonate IT:-
CIOs are at the heart of the emissions reduction story. Information technology is not just a huge energy consumer but can also play a role in reducing energy use and cutting costs in other areas of the organisation. But what are the first steps CIOs can take today to ensure they are prepared to lead the way in cutting their carbon impact, as soon as it becomes a bottom-line issue within their organization?

1. Build environmental responsibility into your distributed organization
As organizations have globalised in recent decades, they have had to face the challenge of maintaining a common corporate culture, irrespective of geography. They now face the same challenge in their attempts to engender a sense of carbon impact responsibility across the business. Concerted and consistent education, support and encouragement are needed to ensure people are aware of what is expected of them, and that they actually exhibit the desired behavior. But this message needs to come from the top down – the CIO needs to lead the way.

2. Ensure the right systems and processes are in place
A group-wide function should be put in place to capture, manage and report all the data related to IT use in the business. Work with facilities management, environmental management and finance, because they will each potentially be affected by legislation as it is brought in around the world. With more countries looking to enshrine environmental commitments in law, there is an increasing need to display accountability at the highest level of the organization. Simply storing information on a spreadsheet will no longer suffice.

3. Redefine the workplace
The vast majority of action on climate change so far has focused on energy use. Surprisingly there has been very little emphasis on travel, whether between business locations, or from home to the traditional workplace. In the UK, for example, approximately 25% of all emissions are travel-related. Promoting technologies that can replace the need for travel (while also saving huge sums of money), by enabling people to meet virtually or work nomadically, is something that CIOs can be doing at board level.

Copenhagen: implications for global businesses
“It’s very disappointing, I would say, but it is not a failure.” So said Sergio Serra, Brazil’s Climate Change Ambassador at the conclusion of the Copenhagen Summit. This was a view echoed by many, from fellow politicians, to NGOs, to the legion of green pundits in the world’s media. After the summit, there was a feeling that at least a global consensus on climate change was reached. The Copenhagen Accord gives international backing for an immediate global move towards action on climate change. In some ways this is a bigger achievement than the binding commitments that resulted from Kyoto 17 years earlier when the deal only affected developed countries. So what exactly did they agree to? There were three key components:
1. Backing for an overall limit on global warming of two degrees;
2. Agreement that all countries need to take action on climate change;
3. The provision of $30 billion of immediate short-term funding from developed countries over the next three years to kick start emission reduction measures and help the poorest countries adapt to the impacts of climate change; as well as a commitment by developed countries to provide long-term
financing of $100 billion a year by 2020.

Illustration: Comparison of emissions for a typical 200-server Windows network

This illustrative comparison shows the major impact virtualization and data centre energy efficiency can make to CO2 emissions.
1. Impact of virtualization
• Non virtualised: 130KW (~610 tons CO2)
• Virtualised: 24-50KW (~112 – 130 tons CO2)
• Virtualization can reduce power consumption by between 66 per cent and 82 per cent.
(Assumption: Average data centre Power Usage Efficiency* of 2.4)
2. Impact of data centre efficiency
• The difference in energy consumption between an inefficient data centre and an efficient one can be as much as 50 per cent. (Assumption: PUE range from 3.2 to 1.6)
3. Combined impact:
Best and worst-case CO2 emission scenarios

• Potential energy saving/CO2 saving ~91 per cent
* Note: PUE is the industry standard energy efficiency measure for data centers.

2. Analysys Mason’s Carbon Reduction Commitment Brochure
4. EU Press Release


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