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LONDON, United Kingdom — [Editor's Note: This article originally appeared on BusinessGreen.com, and is used with permission.]
IT industry experts are calling on the UK government to amend the imminent Carbon Reduction Commitment (CRC) energy efficiency scheme, warning that it will force participants to outsource energy-intensive IT infrastructure to offshore operators, which could drive up overall emissions from the sector.
The legislation comes into effect in April and will apply to about 5,000 large UK public and private sector organizations that consume more than 6,000MWh of electricity per year. As a result, many of the UK's larger data centers will be covered by the scheme and will be required to report on their energy use and attempt to improve their efficiency or face financial penalties.
The cap-and-trade scheme is intended to provide organizations with financial incentives to cut their carbon emissions by imposing financial penalties on those organizations that at least curb their energy use, and providing bonuses to those that successfully reduce energy use.
But according to Liam Newcombe, secretary of the British Computer Society's data center specialist group, one of the legislation's key flaws is that participants only purchase carbon credits under the scheme based on their own levels of in-house carbon emissions, not those generated by outsourcing providers on their behalf.
As a result, he is concerned that organizations will be provided with a " perverse incentive" to outsource their IT infrastructure, potentially to overseas operators, to avoid additional charges imposed by the CRC. "I'm already aware of a couple of organizations that are very interested in managing their CRC league table positions by outsourcing their IT assets," Newcombe said.
Such tactics could prompt accusations of "carbon laundering", but Newcombe predicted that firms could adopt a "slow and more creeping" approach, designed to avoid any suggestion that they are deliberately outsourcing their emissions to third parties.
For example, he said he expects to see participants increasingly install new or upgraded equipment into co-location or other third-party facilities rather than run them in-house, with a view to quietly massaging emission figures to demonstrate year-on-year improvements in emission reductions.
"Even if you're trying to play the game straight, you won't be able to do it because you can't report the CRC performance of your co-location sites," he warned. "So even if you're trying to be honest, you're forced into an obscure game of carbon management accounting."
The only real winners in this scenario will be the outsourcers and vendors selling carbon accounting software and services, Newcombe added.
Meanwhile, efficient and successful service providers that manage to grow their customer base could well end up being penalised under the initiative.
Relative Costs - CRC versus the costs electricity
Before moving offshore shouldn't data service providers undertake an assessment of their own capability to manage electricity consumption?
With the cost of a tonne of carbon dioxide generated from electricity use being somewhere around £150 shouldn't data service providers consider addressing the bigger issue of energy efficiency before threating relocation at the site of an extra £12 which will most likely be refunded minus a small penalty of less than 10%.
Oliver King
Senior Consultant
Energy and carbon Management Team
AECOM
London
renewable energy based IT services
Outsourcing service providers that use renewable energy based capacity, as is found in Iceland for example, could provide much needed relief to UK data center users. Iceland is an undiscovered and potentially valuable resource for the UK as it strives to manage its carbon emissions and searches for additional sources of clean power.