Are you Ready for Mandatory Carbon Footprinting?

Phil Wilcock from 1E writes: A new survey finds that only 25% of businesses here in the UK are measuring their Carbon Footprints. While that may not set alarm bells ringing in most other parts of the world, here in the UK it's a little more serious as it's only six weeks before the deadline for the CRC Energy Efficiency Scheme, a cap-and-trade program for large private and public organizations that are not covered by the EU Emissions Trading Scheme. This means organizations such as Universities, supermarkets and city councils.

The CRC will apply to around 5,000 large organizations that use more than 6,000 megawatt-hours of electricity annually. The UK's Environment Agency said last week that just 1,229 organizations had signed up to meet the Sept. 30 deadline. Those that take early action through various certifications, such as the Carbon Trust Standard, can earn a higher ranking on the CRC league table, which will eventually be made public so that poorer performing companies can be 'named and shamed'.

According to the report, most companies are now resigned to the fact that Carbon Footprinting (and paying for the emission of excess carbon) is going to become law sooner rather than later.

“The debate about whether or not carbon footprinting and payment will become mandatory for business appears to be over as far as finance heads are concerned," Harry Morrison, general manager of the Carbon Trust Standard Co., which conducted the survey, said in a statement. "Yet only a minority have taken action so far and these early movers have a clear advantage. Building carbon management into the DNA of the business now not only ensures preparedness for future compliance requirements but also brings immediate cost and efficiency benefits and competitive edge."

In another interesting report, it seems that even those companies that are recording sustainability stats aren't doing it so efficiently.

In a recent a US survey by iReuse Companies were polled to find out which sustainability metrics were being tracked, which were most important and how data was being managed. Responses came from a variety of people within these companies, but overall one of the main conclusions is that while managing and reporting electricity use is seen as critical, the systems used to record such data are usually quite basic. The report finds that Excel-based systems are most often used, but many are looking for solutions that are easier to use and more sophisticated in the interpretation of the data.

Luckily for them, both NightWatchman and NightWatchman Server Edition have sophisticated reporting engines which can be used to feed into a company-wide sustainability report. Here at 1E we believe that Carbon Management is just as important as financial management and should be firmly embedded in your company at all levels. With more and more legislation coming down the road in order to force companies to account for their energy use, now is the time to be looking to both report on and reduce your Carbon Footprint. With 1E's current Energy Management software and great free resources such as the Carbon Management Center from GreenBiz.com to get you started, help is at hand.

Use 30% less ink with Century Gothic Font

The University of Wisconsin, Green Bay, has changed its default font for Outlook across campus to Century Gothic. It seems that Century Gothic uses 30% less ink than Arial, the most commonly used default font. Ink costs the university around $10,000 a gallon, with toner cartridges and drums not far behind, and accounts for 60% of the cost of the printed page, so it’s potentially a significant saving across a university campus.

In this case changing the default option is an effective way of nudging people towards greener behaviour. There’s no force involved - the University made it clear that users can change back to a different default font if you wish. The university is also encourage everyone to switch to Century Gothic as their default font in Entourage for Macintosh, Word, and Excel.

If you want to go even further, there are specially designed green fonts. With Ecofont, for example, users can work with their usual font but for printing use its ink-saving variant. The green font has additional holes to reduce ink use with, apparently, no impact on legibility. Ecofont claims that its font is even more economical than Century Gothic. Preton has a solution that deletes unnecessary pixels from all aspects of a print job as well as providing the capability to eliminate unneeded text or graphics from print jobs and providing analysis of print usage and savings.

So there’s a lot that can be done to reduce the environmental impact, and cost, of printing – the above are just a few examples of what’s on the market. Read more on Green Printing at The Green IT Review

Whitepaper - Empowering Energy Efficiency in Federal Data Centers

This white paper discusses the Federal data center consolidation initiative and describes areas where greater energy efficiency and carbon reductions can be achieved using a number of quick wins. Don't be fooled by the title - this paper is not only relevant to Federal Data Centers, there's lots of great, usable info for anyone out there who is interested in Data Center energy savings, and more specifically how 1E's NightWatchman Server Edition can help.

Just to whet your appetite, some of the topics covered in this paper are:

IT Asset Utilization

Consolidation and Power Management

NightWatchman Server Edition - Quick Wins

Read the full document here:http://www.docstoc.com/docs/46793305/Empowering-Energy-Efficiency-in-Federal-Data-Centers

New white paper: Tools to assist with the CRC Energy Efficiency Scheme

Commencing April 2010 the CRC energy efficiency scheme is a cap and trade scheme for public and private sector organisations consuming more than 6000mwh of electricity a year. Compliance carries an administrative and financial burden; this burden can be reduced with the use of intelligent tools such as PC and Server power management. Download here.

Green IT: Good for business, good for the environment

So what is the main driver for developing a Green IT strategy? Is it for the green image? Is it driven by the green advocate from within? Or is it because the organization genuinely cares about the ever-increasing carbon footprint generated from the use of IT?

Sadly, it would seem that the main driver is not motivated by good intentions, but by the increasing cost of energy to business to meet growing computing demand and the capital cost of data centers, according to Kenneth Brill, Founder of the Uptime Institute.

The truth is, something has to be done before we run out of power. By 2011 data centers will consume 3% of electrical energy, three times what it was in 2000. In Ken Brill’s words “It's time that the nation's business and government leaders publicly commit their organizations to make enterprise IT and data center energy efficiency a strategic-level priority and set aggressive and quantitative goals for rapid improvement.”

The surprising thing is many C-level executives (for example CIO, CTO, CEO) still don’t understand the significant savings that can be made through the implementation of some relatively simple green strategies. [Look out for my future blog: Quick Wins For A Green Data Center Strategy] A greater understanding is required of where energy is being consumed and wasted in IT in order to make informed decisions to reduce costs and carbon, enabling organizations to move forward and make improvements.

The message is simple, by increasing efficiency, reducing energy consumption and complying with future regulation (UK: Climate Change Levy, US: Cap-and-Trade), your green strategies will offer costs savings benefits while transforming your organization.

[Read my carbon tax blogs for more information on the Climate Change Levy and Cap-and-Trade Program]

In a survey conducted by IBM & Info-Tech Research, 60% of respondent companies had realized benefits from Green IT in terms of decreased electricity and consumable use, decrease in investment, an increase in features and functionality and in meeting customers’ demands. Companies have also realized rebates from utility companies or Government.

So now that it’s been recognized and proven that green is good for your business and for your bottom line, it’s time to stop talking about it and start doing it.

The UK Tax Implications of High Energy Usage in Data Centres

A data centre with 1000 servers running at 13% utilization with a Power Usage Effectiveness (PUE) of 2 and an energy rate of 0.12p per kWh will pay £18k in CCL taxes per annum.

The following is a summary of UK Government legislation for energy and climate change.

Climate Change Levy (CCL)

Introduced on 1st April 2001 the CCL is a tax on the use of energy in industry, commerce and the public sector. The levy applies to industrial and commercial energy supplies in the following sectors: industry, commerce, agriculture; and public and service sectors.

Taxable commodities and rates:

Taxable commodity	Rate
Electricity	£0.00456 per kWh
Gas supplied by a gas utility	£0.00159 per kWh
Any petroleum gas, or other gaseous hydrocarbon, supplied in a liquid state	£0.01018 per kilogram
Any other taxable commodity	£0.01242 per kilogram

Source: http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageExcise_InfoGuides&propertyType=document&id=HMCE_PROD1_027235

Department of Energy & Climate Change (DECC)

The DECC was created to bring together energy policy with climate change mitigation policy. Climate change and energy policies are inextricably linked – two thirds of our emissions come from the energy we use. Decisions in one field cannot be made without considering the impacts in the other.

Carbon Reduction Commitment (CRC)

Starting in 2010 CRC is for all businesses not covered by a climate change agreement (see below) and the EU Emissions Trading System (See below). The policy has been developed with DECC, Energy Act 2008 and the Climate Change Act 2008. An estimated 20,000 organizations will be affected by the scheme and failure to comply will result in penalties.

How does it work? (Proposed)

• CRC will cover organizations with an annual energy bill of > £500k
• All energy other than transport fuels is included in the figure
• Carbon allowances will be allocated by auction
• Annual allowances will reduce over time
• Participants may be able to buy EU ETS credits to comply with emissions cap (see below)
• League tables published outlining best and worst performers in terms of carbon emission and reductions
• Self certification of monitoring, reporting and verification of emission
• Backed by independent risk based audit regime

European Union Emissions Trading System (EU ETS)

The rationale behind emission trading is to ensure that the emission reductions take place where the cost of the reduction is lowest thus lowering the overall costs of combating climate change.

How does it work?

• Government allocates (free) emissions allowances to participating companies·
• If the company goes over their allowance they can purchase additional allowances from the market·
• The additional allowances are sold by companies who have emitted less than their original allocation of allowances

Emissions trading gives companies the flexibility to meet emission reduction targets according to their own strategy; for example by reducing emissions on site or by buying allowances from other companies who have excess allowances. The environmental outcome is not affected because the total amount of allowances allocated is fixed.

Energy intensive sectors

Energy intensive sectors are a wide range of industrial sectors, from major energy intensive processes such as steel, chemicals and cement, to agricultural sectors, such as intensive pig and poultry rearing.

Climate Change Agreements (CCA)

Climate Change Agreements (CCAs) allow eligible energy intensive business users to receive up to an 80% discount from the CCL in return for meeting energy efficiency or carbon saving targets set by the Government.

CCAs have a two-tier structure:

• A sector-level agreement between Defra and the sector or trade association (known as an umbrella agreement)
• Individual agreements between Defra and the operator of the facility (known as underlying agreements).

Targets are set on a company by company basis and must be met in order to receive the discount.

Recommendations for Reducing Energy and Taxes:

Employ the use of a reporting tool for measuring and monitoring energy use and sever efficiency. This will aid decisions such as decommissioning underutilized servers and the reallocation of workloads to use servers more efficiently, all of which will reduce overall energy consumption including cooling costs.

Lower overall energy consumption = Lower taxes

Understanding US Government Carbon Tax: Cap-and-Trade

A data center with 1000 servers running at 13% utilization with a Power Usage Effectiveness (PUE) of 2 will be producing approximately 2000 metric tons of CO_{2 per year. If we estimate that each Cap-and-Trade permit (per metric ton) will cost $15, a 1000 server data center will pay $30k in Cap-and-Trade taxes per annum.}

The goal of Cap and Trade is to reduce greenhouse gas emissions including carbon dioxide throughout the economy using cost effective methods. The program is yet to be finalized.

What is The Cap?

Large emitting companies will have a limit on the amount greenhouse gases they can emit. Each ton of GHG emitted by the company must be covered by a permit. The number of permits will be reduced over time allowing less pollution until the crucial reduction goal is met.

What is The Trade?

A set number of permits are issued per year ensuring that the overall reduction of greenhouse gases is achieved. Efficient companies who successfully emit less than their target can then trade their remaining permits to companies who are not able to reduce their emissions, acting as a reward for the efficient companies.

What is a successful program?

A successful Cap-and-Trade program would limit the rise in global temperature to approximately 2.0 degrees Celsius / 3.6 degrees Fahrenheit above pre-industrial levels by 2050 as part of a larger plan to abate global warming. In order to achieve this, US Government will have to lower the cap until emissions are reduced to 80 percent below 1990 levels by 2050. Initially the government would auction off the permits for around $10 to $15 per metric ton of CO₂ or its equivalent[1].

The program is initially estimated to generate in the region of $50 billion rising to $300 billion. Revenues are expected to be used to help offset costs to businesses and shareholders of affected industries and to help low to middle income Americans cover the cost of energy price increases which may occur as a result of the switch to renewable energy sources. It will also be used in the development of green technologies and trading.

Recommendations for Reducing Carbon and Taxes:

Employ the use of a reporting tool for measuring and monitoring energy use and sever efficiency. This will aid decisions such as decommissioning underutilized servers and the reallocation of workloads to use servers more efficiently, all of which will decrease energy consumption including cooling costs, reducing your overall carbon emissions.

Lower carbon emissions = Lower taxes

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[1] Center for American Progress: Cap and Trade 101 (2008)