Legislation - Update

In a follow-up to the Bali negotiations last December, the first round of talks into the detail of the agreement that will take over from Kyoto starts in Thailand this week (I guess they all flew there!). The Kyoto agreement runs out in 2012 and this gathering is intended to set a timetable for negotiations before the UK Climate Change conference in Copenhagen in 2009.

The real crunch will be in pulling the US into the new agreement, although there have been signs recently that the US would agree if developing nations like China and India were also included. Not much is likely to happen before the new administration takes over in January 2009, though.

At the same time, the UK Climate Change Bill, said to be the first to legally commit a government to carbon emissions reductions, gets it's first vote in parliament today (Monday). There's a long way to go yet, though, and most of the challenges have been because it's not tough enough, with a target of 28-32% reduction in emissions by 2020 and 60% by 2050.

Traffic Optimisation Software

Here's a good one for those of you that are having trouble envisaging the novel opportunities for IT companies in the green market. There is a conference currently going on in Zurich entitled 'The Internet of Things'. It's a joint industry/academia event looking at how the internet can reach into daily life linking activities and information sources. The conference is sponsored by a lot of ICT players including SAP, Siemens, Google and IBM.

Anyway, one study (from the Technical University of Berlin) discussed during the conference was about systems that could help manage a cars progress in order to reduce CO2 emissions. The concept is that if cars are guided to the right route and at the right speed they can be co-ordinated with traffic lights and avoid any disruption to progress. There would be little impact on arrival time and with much reduced CO2 emissions.

It's a long way down the road, but it shows the possible extent to which we may be driven to reduce emissions and how IT will be an essential part of many of the innovative solutions.

JP Morgan Acquires ClimateCare

Investment bank JP Morgan has acquired UK carbon offset company ClimateCare.

I have to say that only yesterday I was talking with a major IT services company about their own efforts to reduce carbon emissions and they dismissed, almost out of hand, the use of carbon offset. It's an attitude I have come across in a number of discussions in recent weeks. Offsetting is a sector of the market that is now shrouded in some suspicion because of scepticism around some of the offsetting schemes and companies.

That's not to say there is anything wrong with ClimateCare and the company will no doubt bring a lot of experience of carbon reduction schemes and carbon trading to JP Morgan. I anticipate that there will be a lot of investment in all sorts of carbon management expertise in the coming months. The IT services companies I have spoken to tend to prefer a partnership to acquisitions, but I suspect that a lot of these companies will be taken off the market through acquisition and it may end up as a scramble to acquire the expertise.

Carbon Calculators

A couple of products have been announced to help calculate carbon emissions:

• Xerox has announced the Sustainability Calculator, which helps assess the current usage of printers and copiers and provides customers with an initial measurement of their environmental footprint. It pinpoints where the environmental impact of the devices can be reduced and assesses what the benefits would be.
  

• Oxford's Environmental Change Institute (ECI) is pioneering an energy saving research project to make networked computers more energy-efficient. It is planned that the software will be easy to download and free of charge with a view to providing benefits for further and higher educational institutions across the UK.

ILOG Adds Carbon Counting Capabilities

Nasdaq-listed software company ILOG has announced a carbon footprint extension to its suite of supply chain applications. ILOG says that the new extension helps companies evaluate the impact of various supply chain network configurations and transportation strategies on their carbon footprint, allowing them to quickly implement green supply chain initiatives.

These are the sorts of products that will increasingly appear over the next few years. The cost of carbon will become a factor in many business decisions so will need to be included in various internal systems that cost and manage business processes. Products will appear and IT services companies will be consulted about strategy, choice and implementation.

Greenguard Chemical Emissions Certification

Green IT is not just about energy use. The goal is long-term sustainability, so an announcement by the Greenguard Environmental Institute (GEI) in the US is welcome.

Greenguard is an industry-independent, non-profit organisation with a certification programme for chemical emissions from building products and furnishings. It has just announced that it is expanding its coverage to include computers. "Electronics, including monitors, computers and printers, can emit chemicals and particles into the air, particularly when in use. These chemicals may trigger a range of health issues, including asthma, allergies and other irritating reactions” Greenguard's CEO said.

The idea is that with the certification consumers can identify computers that have been found to be free of toxic emissions. The Lenovo’s M57/M57P 'Eco' is the first PC to achieve it.

Merrill Lynch Supports the Carbon Disclosure Project (CDP)

Merrill Lynch has agreed a three-year partnership with the CDP. The Carbon Disclosure project is the leading organisation looking at corporate action to combat climate change. Every year it sends out a request to over 3,000 companies globally asking them to measure and disclose their greenhouse gas emissions and report on their strategy for dealing with risks and opportunities associated with climate change. It is rapidly becoming the global focus for the standardisation of carbon emission measuring and reporting.

CDP is an independent, not-for-profit organisation that acts for a number of investors, including Merrill Lynch, in gathering the information.

The idea of the agreement is that Merrill Lynch will bring its expertise in capital markets, carbon trading, investment banking and advisory services to speed up and geographically expand the CDP's coverage.

HP Data Centre Services - but is it Enough?

Hewlett-Packard yesterday announced a set of data centre services including things like consolidation and virtualisation. The welcome part is that the press release made no reference to ‘green’ or the environment at all. The benefits that HP point out; ‘energy efficiency, automation, virtualization, consolidation and business continuity’, should really be enough, without resorting to any greenwashing.

However, the company is also bringing its Dynamic Smart Cooling for data centres, launched in the US last year, to Europe, and that, understandably, does come with a green label. Barclays Bank in the UK is using it, with other measures, ‘to save up to 13.4 percent of total energy used for its data centre’.

This is part of Barclays' plan to reduce CO2 emissions by 20% by 2010, from a year 2000 base. Let's do some sums:

• The UK Climate Change Bill is looking to reduce carbon emissions by c30% by 2020.

• In a report to Congress in August 2007 the US Environmental Protection Agency (EPA) estimated that in 2006 electricity consumed by servers in U.S. data centres in 2006 was more than double the figure for 2000. If the same is true in the UK, then Barclays’ data centre energy consumption in 2007 would be c300% of the level in 1990 (less any savings already achieved).

• Thus to meet the UK targets Barclays needs to find over 70% savings in data centre energy (from 2007 level) by 2020. The package of measures it announced adds up to just 13%. Where does the other c57% of the savings come from?

This is not to criticise either HP or Barclays – every little helps. But it does put it in context. With the growth in IT use it will be very hard to limit IT energy consumption to match emissions targets. Pick the low hanging fruit and move on to other corporate targets where IT can help.

National vs International

As if to make my point in yesterday's blog The Role of Legislation, there are press reports today about Angela Merkel, the German Chancellor, gaining promises from the EU that some of Germany’s heavy industry would be exempted from the legislation to curb global warming. Merkel won the deal in exchange for supporting a move to reduce VAT on some green consumer goods, such as low-energy light bulbs (a move which met with some derision at the Green IT Summit, along the lines of fiddling while Rome burns).

It was only last year that Merkel was seen as the main mover in getting the EU to agree the 20-20-20 plan, i.e. reducing emissions by 20% by 2020. This year, though, with her German Chancellor’s hat on and looking at converting the targets to national and international law, it’s a different story.

To be fair, the reason behind the concessions is that when the European legislation’s carbon trading scheme toughens up in 2013 the cost of carbon will make these heavy industry sectors uncompetitive with companies from other geographies (US and Far East) who don’t have the same constraints.

It just shows how important it is to have agreement on international targets to reduce emissions as well as a means to address them, otherwise it will be a case of chasing polluters around the world as they move to less restrictive regimes. It also shows what a complex environment it will be for international companies to address local emissions targets and compliance legislation, making IT support even more essential.

The Role of Legislation

I said in my previous post that the market will not really take off until legislation kicks in, but there is likely to be some reluctance by governments to be too heavy handed in their approach, with as much carrot as stick in enforcing compliance.

This partnership approach was favoured by another speaker at the Green IT Summit – John Doyle, who has the unenviable title of Sustainable Development Policy Co-ordinator, DG INFSO, European Commission. He brought the issue into focus with a quote from a European politician; “Everyone knows the right thing to do, but not how to get elected after doing it”.

Market Drivers

At the Green IT Summit there was a panel session entitled Do companies Care? and speakers from Citigroup, the Royal Mail and Marks & Spencer all agreed that their companies really do care about the environment. They gave examples of what their organisations had done to be greener and how much money they had saved.

The italics are mine, because, of course, most companies don't care unless there is some benefit. Cost (or cost-benefit) was the main driver in these cases, although for Marks and Spencer there is also their reputation as a quality retailer to be maintained.

My point is that going green is not generally an altruistic move but rather the result of various pressures. At the moment saving money is the driver for projects that would, at some time, have been done anyway. Company reputation is also a factor, particularly for retail companies. But this will change.

I also had a discussion with Graham Whitney, Chairman of IBM's Climate Change Group in the UK earlier in the week and he has a chart on which he has plotted the various factors influencing the move to green - cost, reputation, stakeholders and legislation - showing how their influence will change. I don't necessarily agree with the detail of the chart (hopefully I can show it some time), but the main point is that regulation is going to become much more prominent before the market goes mainstream (although legislation will effectively result in cost pressure through some aspect of carbon pricing and trading).

Plotting this graph of influence also allows some assessment of market development. In the UK the Climate Change Bill currently going through Parliament will impact carbon emissions in 2010, so companies will need to be seriously thinking about the consequences in mid-2009. At that point it won't be the 'low-hanging fruit' that's the focus of attention, but more serious, long-term solutions that need IT support.

Where is the IT Focus?

Spent Thursday at the European Green IT Summit in London. Interesting, if not enlightening.

One of the figures bandied about by commentators is that IT contributes 2% to global carbon emissions, the same as air travel. (Although since this is global, it means it would be higher in developed countries and even higher if the economy is more services than manufacturing-orientated, as is the case in the UK).

The point is that at the moment the industry is particularly focussed on that 2%. If you add in another fact I’ve seen more than once, that 50% or more of those emissions are in systems distributed around an organisation, then all the attention on data centres is addressing just 1% of the problem.

The point that several speakers made at the summit and which I heartily endorse, is that it’s the other 98-99% that’s of real interest – it’s where IT can really make a difference.

The ‘Greening’ of data centres would/should have happened anyway, since the main incentive has always been to save money. IT departments need to look beyond the data centre at the bigger corporate picture and adopt a much more holistic approach to how they can help reduce carbon emissions.

The challenge for IT services companies is to be there to help customers. They need the methodology to measure carbon emissions, the experience to advise customers on where savings can be made and the solutions to help them reach their targets. At the moment there are very few (if any) that can do it all in-house.

Greenest Electronics Rankings

Greenpeace has been publishing a quarterly report comparing electronics manufacturers on the environmental friendliness of their products and the latest report came out at Cebit last week. The analysis covers desktop PCs, notebooks, mobile phones and PDAs across a variety of factors, including use of hazardous chemicals, energy efficiency, product lifecycle (recyclability and upgradeability) and other factors.

The survey was based on voluntary participation by companies who submitted their most environmentally-friendly products. Each company could submit up to three examples in each of the product categories and a total of 37 products, from 14 manufacturers, were included.

The best products were the Sony Vaio TZ11 notebook, the Sony Ericsson T650i mobile phone and the Sony Ericsson P1i PDA. The best rated desktop came from Dell (Optiplex 755) and HP (dc5750).

None of the best mobile phones, desktops, laptops and PDAs scored more than five out of ten on Greenpeace’s scale, but the organisation did say that there are plenty of individual innovations by different companies in toxics reduction, energy efficiency, longer lifecycles and recycling, it’s just that no one is putting it all together yet.

Green IT Companies Snapped Up

IHS Corp, a US company (with offices around the world) which provides technical information, decision-support tools and consulting, has acquired two green IT companies, ESP and Dolphin Software, for $43.5m.

Environmental Software Providers (ESP) is a supplier of enterprise information solutions to help companies manage their corporate-wide sustainability programs. Dolphin Software’s proprietary software and chemical information allows users to record and track chemicals used and stored at their facilities.

Expect to see more of this. As demand for environmental-based advice and solutions grows, so companies that have niche expertise will be snapped up by the large consultancies and IT players looking to benefit from the opportunities. The early buyers will get the bargains, because the price can only go up.

California - Dreaming of Green

In a blog last week (US Commitment on Greenhouse Gas Reductions?) I pointed out that the states are ahead of the federal government in the US in driving green policies. I singled out California, which leads the way with CARB, which is developing regulations to reduce the state’s greenhouse gas emissions to 1990 levels by 2020.

They’re not having it all there own way, though. According to Reuters, on Friday the Bush administration rejected California's bid to set its own tailpipe emissions standard to reduce global warming. The laws the state wanted to introduce would have forced car makers to achieve higher fuel mileage from next year, reducing emissions. Apparently there were 18 other states queuing up to adopt the same legislation.
What can you say?

Climate Savers Computing Initiative at Cebit

Well it’s that time of year again. Cebit “the world's No.1 marketplace for digital solutions, trends and innovations” as the blurb says, is in Hannover from Tuesday for the rest of the week.

This year there’s a bit of a green focus, with 140 exhibitors showing their green IT solutions (although that’s only about 5% of the total!) centred around a Green IT Village in Hall 9, which could be interesting. The 140 are all companies and organisations that are able to make a contribution towards reducing CO2 emissions in the ICT industry.

One of the exhibitors is the Climate Savers Computing Initiative (Stand A40). This is the group of IT vendors pulled together by the World Wildlife Fund (WWF) with the aim of reducing power consumption, and hence CO2 emissions, from the operation of computers by 50% by 2010 (I’m not sure what year they are measuring against). It has some significant members, including AMD, Dell, eBay, EDS, EMC, Fujitsu, Google, Hitachi, HP, Intel, Lenovo, NEC, Microsoft and Sun Microsystems. If you’re there it might be worth taking a look (and don’t forget your comfortable shoes).