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Green IT Revisited

Paul Krugman has just posted an alarming article updating the consensus of reputable scientists and economists on global warming. Along with a book about which I recently did a blog post, it provides a 20,000-foot view of the increasing clarity of global warming’s likely future effects and of the paths that the world will take as they seek (or fail to seek) to mitigate (not eliminate) those effects.


A very broad-brush summary is that spending on “green” carbon-dioxide-emission reduction can take one of three paths:


  1. Do nothing. In that case, businesses of all stripes will need to decide what to do about urban areas no longer supported by their physical infrastructure (because the traditional climate will have migrated northward/southward with little ecosystem/farm ability to adapt); about serious droughts and more extreme weather events with much greater damage to the economy, especially in emerging markets; and about much greater political friction, as haves and have-nots quarrel more bitterly over changes that will disproportionately affect the have-nots.
  2. What Krugman calls the gradualist approach, in which government-led cap-and-trade or carbon-tax initiatives are slowly phased in, probably with loopholes, over the next 15-30 years. In that case, businesses should anticipate spending much energy ensuring that the resulting phase-in is as favorable as possible for a given industry – but also, there is a good possibility that they will still face the dilemmas outlined in Path 1, in slightly less dire form, over the next 30 years.
  3. What Krugman has dubbed the “big bang” approach, in which cap-and-trade or carbon taxes go into full force in the next 2-3 years, worldwide, with special attention paid to reducing coal emissions and production sharply. This might result in a global temperature increase of “only” 4 degrees Fahrenheit, which would avoid most of the dire effects cited in case 1. However, businesses will find it less productive to advocate for particularly industries in that case, as their time will be fully taken up by figuring out how to handle the new industry pecking order and minimizing the additional “tragedy of the commons” costs.


But what does this mean for IT, here and now, in the middle of struggling to get out from under the worst economic crisis since the Great Depression?


Let’s start with the way these three approaches will affect what business requires of IT, over, say, the next five years. If the “do-nothing” approach is adopted, and carbon emissions continue to increase as in the last 40 years, it is likely that the worst consequences will not take place until after 5 years’ time. Thus, businesses content to maximize profits in the short run will demand little change from IT in the next five years, while proactive businesses will seek to virtualize their IT infrastructure as rapidly and comprehensively as possible, to reduce its dependence on a particularly global physical location.  IT should also consider decreasing outsourcing to particular emerging-country political hot spots, as these will be increasingly risky places to do jobs such as programming.

The “gradualist” approach shares with the “do-nothing” approach a significant likelihood that the worst will happen – but probably not until after 5 years’ time.  Therefore, as before, pure short-run businesses will not demand climate-related changes in their IT, while proactive ones will seek faster virtualization. However, businesses will also have to compete with businesses in other industries to minimize the relative effect of caps or taxes. IT will play a key role in that effort, since it is the most effective place to monitor (and possibly adjust) emissions to minimize these effects. That is, IT will provide the emission sensors; the business will decide what to do, based on the sensor data. Thus, IT should anticipate a greater need for green-specialized data-analysis software, energy-efficient data centers, and grid-based physical-plant monitoring software and hardware.


In the “big bang” approach, there is much less need to prepare for climate change, but much greater need to prepare for changes in the industry pecking order that cannot be avoided. IT should be prepared for much more rapid transition of the business into less energy-intensive or carbon-dioxide-releasing fields than we have ever seen before. Increased agility, even as a coal business transforms itself into a water-power one or an oil company into a solar/wind-power colossus, is demanded of IT. That means applicability of business-critical software to new accounting methods and decreases in the cost of merging with other companies’ IT.


The flip side of what business requires of IT is what IT can supply to the business in order to aid carbon-dioxide-emission reduction. As noted above, there is no immediate need to carry out these “reduction actions,” and the “tragedy of the commons” ensures that the business will bear few of the long-term costs. However, failure to carry the reduction actions out now will mean some additional costs later, as well as a clear handicap in the marketplace compared to smarter rivals.


The key fact to keep in mind in this area is that while industries are nominally not the source of increasing carbon emissions – at least not lately (according to some figures, emissions from companies’ internal processes, overall, have been increasing by about 0.6-1% per year, far less than “consumer” emissions) – they are also judged by consumer usage of their services; and that varies by industry. An oil company’s manufacturing processes may be far more energy-efficient than 10 years ago; but lower relative oil costs and economic growth translate into rapidly increasing use of gas in transportation, which in turn leads to a strong political focus on automotive gas mileage and on the role oil companies play in auto emissions.  Internal IT, by contrast, has seen a much faster ramp-up in energy use in the typical company; but, so far, it remains a far less visible symbol of consumer excess.


IT’s role in being part of the solution, not part of the problem, is therefore the same no matter what political approach is adopted. The future holds increasing carbon-dioxide concentrations in the atmosphere, whatever the approach; and, no matter what the approach, every business with consumer-emission-affecting products and services needs to do everything possible in mitigating the effects of these products.


IT’s approach to helping a business do something about climate change, therefore, is (a) focused on consumer products and (b) industry-specific. If an industry such as aerospace, travel, or utilities has a large impact on consumer emission-affecting behavior, IT needs to help the business help the customer to reduce emissions, as part of the products and services. Thus, IT needs to help set up customer-emission-monitoring software, ways of making the product more energy-efficient (rationalizing and fine-tuning the electrical grid, or figuring out more energy-efficient vacations that are still satisfactory to the consumer), and measurements of energy emissions that enable both internal and external improvements.  Moreover, these software solutions need to be far more global and extra-organizational than ever before, because it is very easy to “flow emissions to the least regulated spot”, which accomplishes nothing while seeming to the business to solve its problem.


One final point: even during the recession, total computing-related emissions appear to have continued to climb at a rapid rate – somewhere between 20% and 50% yearly worldwide. While some of this climb can be excused as a byproduct of moves to decrease other/larger emissions, somewhere around 10 years down the line IT itself will see more stringent energy limits that cannot be outsourced to developing countries or traded for advances in other areas such as transportation. A global, cross-organizational and cross-market approach to a business’ emission profile may not pay dividends until then; but it will indeed pay dividends.


Overall, then, this economic “perfect storm” that IT and the business are now seeing as a reason to downplay green efforts is, in fact, more like the fable of the mythical frog who is placed in water that is gradually heated, and who fails to notice the increase at any point until it is dead and cooked. Whatever the political approach, climate change pain is already baked in, and quicker IT adjustment is better than failure to notice the increasing heat over the next 5 years.  What the IT strategy should be, depends on the political approach, industry, and consumer; that there should be an IT green strategy, does not.

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Wayne Kernochan