April 2009 Archives

That’s the premise behind an article in the New York Times’ special supplement, The Business of Green, today. According to the article:

During the first quarter of 2009, investment in green technologies by venture capitalists, who drive a disproportionate amount of financing in new technologies, shriveled.

How bad was it? Venture capitalists invested $154 million in 33 startup companies in the first three months of 2009, compared with $971 million invested in 67 companies in the last quarter of 2008. That’s an 84 percent drop in financing.

These numbers are important because they reveal the extent of the damage the credit crisis has wrought on venture capitalists. We all know that it’s harder now to get a loan to do anything, but venture capital has always staked out a different piece of the market. Venture capital firms are largely unknown to the public, preferring to stay incognito under names like Sequoia and Cerberus. Behind these unknown names are some pretty heavy brand names like 3Com and Avid Technology. When a company funded by venture capital becomes successful, the venture capital firm can make a lot of money by selling the company or going public. High risk, high reward.

By definition, venture capital seeks to invest in businesses that other investors would shy away from. A success rate of 10% (1 out of 10 businesses survive, the other 9 fail) would be considered an excellent rate of success for a venture capital firm. In other words, these guys (and women) invest in firms that fail, and they do it routinely! The only way that they can stay in business, however, is to access huge lines of capital. Sometimes the capital can come from other investors (so-called “angel” investors), but typically the capital comes from credit. The credit crisis has severely dried up the capital available, and venture capitalists are suddenly very cautious about where they invest their money.

Another interesting excerpt from the article:

More than half of clean-tech investments have been in alternative energy like solar and biofuels, which typically require building big factories. These projects depend on capital like project finance loans as well as tax equity investments, whereby corporations back green energy projects and reap the tax credits.

Indeed, the term “clean tech” is used loosely these days, and typically refers to solar and wind electricity production, huge projects with huge problems. What strikes me is how absent clean tech, as those of us in Green IT know it, is from venture capital’s radar. Wind, solar, and biofuel gets all the attention because it’s sexy and grabs headlines, but it seems to me that there are equally huge opportunities to be made in server virtualization, cloud computing, green data centers, client power management, and so forth. I can’t pinpoint as yet why Green IT has failed to ignite venture capital. If some of Green IT’s more aggressive ideas are to find breathing room, however, then we’ve got to start competing with solar and wind for those dollars.

I previously blogged about the Waxman-Markey carbon limit legislation in the House of Representatives. I wrote:

For IT techs around the country, the lesson is simple: carbon regulation is coming. It won’t come for another 12-24 months, but when it does, we are all going to have to figure out (1) how to measure the carbon footprint of our enterprise (including data centers, client workstations, everything), and (2) what to do if that footprint is larger than what the government says it needs to be.

I based my conclusion based on the fact that the Democrats do not have a filibuster-proof majority of 60 seats in the Senate, leaving the Republicans the ability to block the bill in the Senate.

Yesterday, Arlen Specter became a Democratic senator from Pennsylvania. His reasons for doing so are pretty transparent. Pennsylvania has steadily become a blue state, with more than 200,000 voters switching their party registration from R to D in the last election. If he ran as a Republican in the primary next year, he would have suffered a humiliating loss to another candidate, Pat Toomey, who is far more conservative than Specter, and who has the backing of what's left of Pennsylvania Republicans. The only way for him to have a chance to win re-election was to switch parties. Of course, switching parties doesn't mean that he'll switch positions and go along with the Democrats on all issues. In his press conference yesterday, he specifically re-stated his opposition to the Employee Free Choice Act (an important piece of legislation for Democrats), which would ease the process for unionization in the workplace. So the question on my mind this morning is: Will Specter's switch mean more likely passage of carbon cap and trade? That question is also tackled on the WSJ Blogs and Platts. I think both miss the mark.

My conclusion is that the answer is Yes, it's more likely. Here's why.

As a moderate Republican, Specter was never part of the party that denied the existence of global warming or that the government shouldn't do anything about it (unlike Palin, Jindal, Limbaugh, Boehner, etc). On the other hand, Pennsylvania is coal country, and Specter won't support any legislation that will hurt the coal industry even further. Here's his official stance on climate change legislation:

Much attention is currently focused on the issue of climate change, an issue that I have been following for some time. As early as 2001, I urged the President to address greenhouse gas emissions by having the United States , as the largest greenhouse gas emitter in the world, take a leadership role on climate change. During consideration of the Energy Policy Act of 2005, I introduced a bipartisan amendment with Senator Bingaman calling on the U.S. Congress to “enact a comprehensive and effective national program of mandatory, market-based limits and incentives on emissions of greenhouse gases.” The passage of this amendment on June 22, 2005, was a step forward and formed the basis for legislation we introduced on July 11, 2007, S. 1766, the Low Carbon Economy Act which would slow, stop, and reverse the growth of greenhouse emissions while protecting our economy and encouraging comparable action by our major trading partners and key contributors to global emissions.

The legislation is already under fierce attack from Republicans, and I believe that Democrats in Congress and President Obama will make some key concessions such as allowing free allowances to companies to address the cost issue. Democrats will not, however, yield on the heart of the legislation, carbon cap and trade. Since Specter has supported carbon caps in the past as long as the effect on coal jobs in Pennsylvania is addressed, I believe there's a good chance he will support the Waxman bill.

Even if he does not, however, Specter's defection is still good news for the bill. That's because he can still vote against the bill, but vote for cloture. Remember, the magic 60 number simply permits Democrats to cut off Republican debate and put the bill up for a vote. During the vote, a simple majority is enough to pass the bill. Therefore, it's conceivable that Specter will vote with other Democrats for cloture, and yet still vote No on the bill to show his voters that he cares for them. The end result is the same -- the bill passes assuming at least 51 Democratic Senators vote for it (and they will).

A lot still needs to happen. Al Franke from Minnesota still needs to be seated in the Senate (he will). The bill still needs to pass the House (it will). And finally, the bill still needs to pass the Senate. Before yesterday's defection, I would have given the climate bill a less than 50% chance of passing before the end of 2010. Today, I'm upgrading my assessment to better than 50%. For IT companies, the need to plan for a carbon-limited future just became a lot more pressing.

Earth Week last week, so there was a lot of Green Tech news. Here’s a sampling:

• An audit of Sprint’s internal IT operations led to a $20 million reduction in operating costs and reduced the company’s carbon footprint by 10,450 metric tons.

• IT hosting company The Planet unveiled a new facility in North Dallas that features a green design featuring high-efficiency water-cooled chillers. The green features added $2 million to construction costs.

• One-fifth of CIO’s polled by NetworkWorld plan to spend on Green IT in 2009 despite the recession.

• The Environmental Defense Fund recognized Google, Cisco, HP, GridPoint, and IBM for their Green IT efforts.

• Logicalis, a technology solutions provider, has created a website that allows visitors to input the number of IT equipment their company operates, calculates the carbon footprint of the enterprise, and potential virtualization savings.

• Extended Producer Responsibility, the European Union’s euphemism for end-of-life recycling, is coming to Canada. And they’re looking forward to it.

• Think the U.S. has earmarked a lot of money in the economic stimulus for green jobs? South Korea’s stimulus package sets aside a whopping 81 per cent (2.6 percent of GDP) for green projects.

• The U.S. Government can set an example of Green IT practices by adopting energy efficient equipment and conducting energy assessments. Dell would like to help.

• InfoWorld released their annual list of Green IT leaders of 2009.

• Citi announced that its new data center in Frankfurt is the first to achieve LEED Platinum rating.

• Microsoft has released a paper highlighting its owns practices for creating energy efficient data centers.

In 2007, while I was taking a short sabbatical from University work, I had the chance to work at the Supreme Court of the United States. It was a wonderful experience, and one of the perks of being an employee is being able to watch any oral argument from the employee section. The most memorable case I heard that year was Massachusetts v. EPA. In that suit, the state of Massachusetts (along with several other states) sued the EPA for its failure to regulate carbon dioxide and other greenhouse gases. One of the legal issues in the case was standing. If Massachusetts could not link carbon dioxide with global warming, which then caused the erosion of shore lines and other environmental damage, then Massachusetts couldn’t bring the suit in the first place. The case therefore became a legal referendum on whether carbon dioxide causes global warming. In a close (5-4) decision, the Supreme Court sided with the states, and ruled that greenhouse gases are “pollutants” covered by the Clean Air Act, and ordered the EPA to determine whether greenhouse gases from new motor vehicles cause or contribute to air pollution. The case was a stunning defeat for the Bush administration, which had ordered the EPA to specifically not regulate greenhouse gases.

More than two years later, the other shoe dropped when the EPA answered the Court’s question. Last week the EPA issued a proposed finding that carbon dioxide is a pollutant that endangers public health and welfare. Furthermore, the EPA issued a proposed finding that the combined emissions of new motor vehicle standards contribute to atmospheric concentrations of these gases and therefore the threat of climate change. You can read more about the EPA’s finding in the press release here. At this point, the finding is a proposal and the EPA is accepting written comments from the public for 60 days, as well as holding two public hearings on May 18 and May 21. More information about submitting feedback to the EPA can be found here.

The reaction from conservative Republicans has been fierce. Senator Christopher S. Bond said, “The Obama administration’s actions today will do more to endanger families, farmers and workers with new energy taxes and lost jobs that it does to protect the environment.” In today’s editorial, the Wall Street Journal excoriated the finding, saying the EPA has “put a gun to the head of Congress and play cap-and-trade roulette with the U.S. economy.” The editorial blasts the EPA’s finding and future rules under the finding as “taxation without representation.”

The EPA’s ruling is limited for the moment to motor vehicle emissions. If the ruling is adopted (and there’s no reason to think it wouldn’t), then we can expect to see the car industry adopt carbon caps for the first time (I mentioned this earlier in the week). For the time being, there’s no talk about the EPA implementing carbon limits on any other industries such as power generation or IT. However, the ruling does lay the foundation for such rules if they become necessary.

Politicians and pundits are wringing their hands over this ruling and the possibility that carbon caps may come without Congressional action. Setting aside partisan hyperbole for a moment, though, the EPA is simply doing what Congress asked it to do decades ago – ensure our environment is clean. Congress recognizes that it doesn’t have the scientific expertise to manage day-to-day or industry-specific emissions levels, so it creates agencies such as the EPA, SEC, and FCC to handle the task. The EPA has been ordered by the Supreme Court to investigate greenhouse gases, and to no one’s great surprise, the EPA has concluded that the science points towards greenhouse gases leading towards climate change.

While the carbon cap-and-trade legislation works its way through the halls of Congress, it’s worth keeping the EPA in mind as well. Even if the legislation fails, the EPA is armed with the Clean Air Act. With these findings in hand, the EPA may be able to implement carbon caps on many industries, including IT and data centers. Time will tell if that becomes necessary.

As I previously mentioned, the House of Representatives began debate on the Waxman-Markey energy bill Wedneday. The House Energy and Commerce Committee is hearing 67 witnesses this week, and will begin subcommittee work next week. Even if the bill manages to pass the House, the Senate is not scheduled to start work on it until this fall.

The bill has several provisions including mandates for renewable electricity and carbon capture in burning coal (for an explanation of this process, and the gloomy results of trials so far in the Netherlands, click here. The most important part of the bill, however, is carbon cap and trade. If implemented, the bill would limit the amount of carbon dioxide the U.S. produces and eventually reduce it significantly. A market for carbon allowances would allow companies to buy more than their fair share of emissions from other companies that use less than they need. The bill is currently silent on how many allowances the government will give away for free versus selling at auction, and what the government plans to do with the billions raised by selling allowances.

Carbon cap and trade is, of course, controversial. House Minority Leader John Boehner described the effort to paint carbon dioxide as the source of climate change as “comical”, reasoning that cow flatulence contributes carbon dioxide to the environment. At yesterday’s hearings, Representative Fred Upton (R-MI) called the legislation a proposal that would “kick working families when they’re down.” Even the Obama administration has apparently stopped short of endorsing the bill as written. The EPA, however, has released an analysis of the bill. The EPA concludes that carbon prices will trade in the $13-$17 per ton range by 2015, and up to $22 a ton by 2020.

It’s still highly unlikely that Congress will take any action on the Waxman-Markey energy bill until after the 2010 midterm elections next year. The battle in the Senate will be significantly more difficult for Democrats to win unless (as I predict will happen) they add more seats in their column next year. For at least 24-36 months, I would predict that the IT industry, including data centers, will not have to worry much about carbon caps or buying allowances.

As you no doubt have noticed, I’ve stayed away from blogging too much about Earth Day. Like Earth Hour, I confess that I don’t get it. It just seems like our planet deserves more than an hour, or a day, of our attention. So if you want to do something meaningful all year round, why not head to Grist, where they’ve got all kinds of tips for being earth-friendly. Until tomorrow, they’ll also give you a free download of their book, Wake Up and Smell the Planet. Or you could pay $10 for it on Amazon. I think the download is more earth-friendly though. And did I mention it’s free?

Now, on to more serious matters. A couple weeks ago I mentioned the proposed carbon cap legislation introduced in Congress. Congress resumes its session this week, and the carbon cap legislation is on the agenda for debate. I still don’t think legislation will pass this year. There are too many factors working against carbon caps right now, including a fear that caps will slow the economy down by raising prices for businesses.

That hasn’t stopped the White House from pushing for quick action, however. The urgency is driven partly by the United Nations negotiations scheduled for December in Copenhagen, sort of a follow-up to the Kyoto conference that gave us the Kyoto Protocols. The Kyoto Protocol expires in three years, and the Copenhagen conference aims to replace it with a new treaty to reduce greenhouse emissions, and this time to include the United States and (hopefully) China.

Representing the White House is climate czar Carol Browner. If you haven’t heard of her before, you should become familiar now (here’s a quick profile). Although action on the Waxman-Markey bill may not be as fast as the White House wishes, there are other items on Browner’s agenda that can be pushed without Congressional action. One area that I think we’ll see some legislative action on is greenhouse emission regulation for the auto industry. California is already planning on implementing caps on greenhouse emissions for cars, and the EPA is probably going to issue rules that follow California’s lead. The industry is in serious trouble, of course, and these rules will add significant technological and financial burdens to already-weakened companies. I suppose the silver lining here is that the U.S. is now heavily involved in the domestic industry through its GM and Chrysler bailouts and is not likely to support any emissions plans that will tip the industry into a bottomless abyss. Later on this week I’ll blog a little more about the EPA and how it can play an important role in prodding a reluctant Congress to act on carbon cap and trade. Stay tuned.

• Don Tennant, Senior Editor-at-Large at Computer World argues that it’s going to take regulation in the form of cap-and-trade to make meaningful changes in the power consumption of data centers. By the time regulation arrives, data center managers may be caught unaware.
• Frank Hayes, his colleague and senior news columnist, argues that measures like turning off the PC at night is a band-aid approach to Green IT. Real changes need to come from hardware and software developers. Some interesting points here.
• Google ( has posted videos of its much-vaunted container-based data center on YouTube, along with three seminars from a data center energy efficiency conference.
• According to a new report from Forrester Research (http://www.eweek.com/c/a/Desktops-and-Notebooks/Interest-in-Green-PC-Software-Rising-Study-Says-652687/), interest in PC power management software is growing thanks to the recession.
• Gartner reports that 60 percent of European firms are planning green initiatives, and one third will dedicate over 15 percent of their IT capital budgets to green programs.
• Congresswoman Doris Matsui concluded a week-long tour of Sacramento-area clean energy and green technology businesses and announced the creation of the Green Jobs Caucus in Congress.
• Applying lean methods such as reducing inventory and overproduction can reduce the toxic waste stream produced by IT equipment ().
• Here are ten steps that any IT department can take, today, without any cost, to begin greening the department. While you’re over there, check out the other features in the Green IT Special Section, including a list of top Green IT vendors and success stories (with cash savings) of Green IT efforts.

For the vast majority of power customers in the U.S., paying the electric bill is based on a meter reading taken every month or so by the utility company. Current reading minus last month’s reading equals number of kilowatt hours used, multiply by current rate of electricity cost per kilowatt hour, add in taxes and fees, and voila, your monthly electric bill. There are some fancy things utility companies can do, of course, such as take the meter reading from a van via wireless meters and spreading out the cost of the bill over an average year so that the “shoulder” spring and fall months take up some of the costs from the winter and summer months. There is nothing very smart or sophisticated, however, in the billing itself.

This may change very soon. “Smart grids” use wireless cell networks (the same ones you use to make calls, check email, download Kindle e-books) to continuously report on energy consumption. This data can then tell the utility company and the customer how much is being used at what times of the day and week. Cell companies are very interested in so-called smart metering, believing that there is an opportunity here to add another monthly customer to their base. The federal stimulus package includes $4.5 billion to push the technology forward.

The stimulus is also being used to push another environmental dream of the Obama administration, and of anyone who’s ever ridden on the Shinkansen in Japan or TGV in France. The President announced last week a plan to spend more than $13 billion ($8 billion from the stimulus bill, plus an additional $5 billion over the next five years) on high-speed rail networks in the United States. Various tracks are being considered, including one between Los Angeles and San Francisco, St. Louis and Chicago, Tampa and Orlando, and the Northeast Corridor. In all, there are 10 potential corridors that could some day see trains traveling at more than 150 miles per hour. According to the White House, if all ten corridors were developed, greenhouse gas emissions could be cut by about 3 million tons per year. At least one observer is less than impressed.

Last week I blogged about the confusion surrounding certification for environmentally-friendly products. That confusion can have a real bottom-line impact for companies that deal with the federal government, which is a huge purchaser of IT equipment and services, but has buying guidelines that are often less than clear.

Since January 2007, under Executive Order 13423 signed by former President Bush, 95 percent of any agency’s IT budget for computers and monitors must be spent on EPEAT-compliant devices. The Executive Order is administered by the Office of the Federal Environmental Executive (http://ofee.gov/about/modified.asp). EPEAT (Electronic Product Environmental Assessment Tool) is an independent certification that computers and monitors meet certain criteria to be labeled Bronze, Silver, or Gold.

According to the Federal Times the government is now looking to expand EPEAT to include cell phones, PDAs, copiers, printers, and televisions. While the new standards may take a year to implement, agencies are already starting to include contract clauses that require EPEAT compliance for future purchases of these devices. Of particular interest to our readers is renewed attention on data centers, which will also be targeted for EPEAT treatment. The data center for the House of Representatives is already “green” by virtue of using technologies such as virtualization and power management, and has resulted in a 35 percent cost savings.

These are encouraging moves. EPEAT is a “real” standard, not some fluff certification for sale. EPEAT Gold, in particular, is tough to meet. Government agencies are increasingly going to insist on EPEAT compliance in IT purchasing (San Francisco recently required all computers and monitors to be Gold compliant), and having an external standard will make it easier for both manufacturers and customers to work off the same sheet to achieve the goal of environmental protection.

I remember when the first LCD monitors became available for use with computers. They were only 14 or 15 inches, and they were expensive (nearly a thousand dollars), but they were thin and sleek, and compared to a CRT monitor, there was absolutely no comparison. It took a couple years to take off, but these days virtually all desktop computers come with LCD monitors, and prices have come down dramatically (I’m looking at my 24” LCD that I picked up for $200 as I type this).

The same flat revolution has taken over in the television market. The “original” 42-inch plasmas cost many thousands of dollars and were limited to commercial applications like airports and conference centers, and to very high-end consumer stores. Today, flat-panel plasma and LCD screens dominate over the poor CRT screen.
Unfortunately, while the flat panels looked svelte and thin, it turns out their appetite for power is much higher than tube-based monitors (why can’t the human body follow the same rule?). California’s Energy Commission is now taking aim at gluttonous plasma and LCD screens by proposing new standards on power consumption.

According to the article, a CRT monitor takes 193 kilowatt hours per year to operate. A typical LCD monitor jumps to 275 kilowatt hours (42 percent higher than CRT), while a typical plasma monitor consumes a whopping 688 kilowatt hours per year (256 percent higher). The Commission estimates that a typical plasma screen consumes more energy than a large refrigerator.

The proposed rules would place mandatory energy limits on plasma and LCD televisions. Currently only 25 percent of televisions sold in California meet the standard. The proposed rules would take effect from 2011 to 2013, and eventually reduce television energy consumption by half. For individual consumers, that means a savings of $18 to $30 per year.

The proposal is strongly opposed by the Consumer Electronics Association, which estimates California will lose $50 million a year in lost tax revenue and 4,600 jobs. Interestingly, Vizio, which already sells a line of televisions that meet the 2013 standards, and the LCD TV Association, support the proposal.

This is a development to watch. California is a huge market, and manufacturers tend to dislike making multiple models for different states, so if this proposal goes through it will likely affect plasma and LCD televisions sold throughout the United States. The new rules will undoubtedly increase the cost of producing LCD and TV televisions, and presumably that means higher prices for consumers and businesses as well. For now, the rules exclude computer monitors. As computer monitors grow in size, however, the power consumption of monitors will no doubt also attract scrutiny. I wouldn’t be surprised if regulators took aim at computer LCD monitors next. The industry may head off such regulation, of course, by simply incorporating the energy saving technology from televisions into computer monitors. Time will tell.

It’s Monday, and that means it’s time for the Monday News Roundup! Here’s what’s happening in the world of green tech.

• According to a survey by IDC, 68 percent of IT executives rated energy efficiency as “top of mind” when thinking about green IT, while 51 percent said their organization’s approach to green was directly tied to cost savings. The bad news? 78 percent said that their organizations have no budgets in place for Green IT.
• Blogger James Governor thinks that outrage at companies for failing to meet corporate sustainability goals will lead to companies managing expectations rather than tackling environmental problems.
• Victoria University (that’s in Australia for the geographically-challenged) expects to save A$300,000 over the next 10 years by consolidating all its servers into two green data centers. That’s about $218,000 USD for the foreign exchange-challenged.
• In an interview with Investors Business Daily Dell exec Albert Esser claims virtualization is the key to greener data centers, and its own internal efforts have saved $52 million in costs the last three years.
• What to do with old computer and server equipment? Dian Schaffhauser explores this in the educational setting.
• Phase One of Silicon Border has been completed. The science park, located on the U.S.-Mexico border in Mexicali, hopes to attract green tech companies involved in the specialized needs of solar cell and semiconductor process technology.
• The Uptime Institute IT Symposium: Lean, Clean & Green kicks off today in the New York Hilton. Are you there?
• The Green Grid announced a free online tool and maps designed to help North American data center and facilities managers easily determine how much outside air is available for individual data centers. The tool is free, and the cooling to your servers is free too!
• The BICSI Winter 2009 meeting, held in January, attracted more than 4,800 attendees, including IT professionals examining Green IT initiatives.
• • IBM will help businesses and government agencies develop guidelines for their suppliers to ensure those suppliers are green and ethical.

Last week Representatives Waxman and Markey introduced their draft energy and climate bill (The American Clean Energy and Security Act of 2009) in the House. Here is a five-page summary of the bill. There’s a lot in the bill. Highlights include a mandate to transition electricity towards renewable sources. By 2012, 6 percent of the country’s electricity must come from renewable sources such as wind, biomass, solar, and geothermal. By 2025, 25 percent of electricity must be generated through those renewable sources. The bill contemplates the continued use of coal, but through carbon capture and sequestration, a process that involves injecting carbon dioxide from burning coal into the ground rather than permitting it into the atmosphere.

There’s also provisions in the bill relating to fuel efficiency standards and building “smart grids” to measure utility peak loads and demand response applications. (No word on whether these “smart” grids can withstand hacking from foreign governments which is apparently a real possibility).

The most significant part of the bill is carbon emissions. The bill sets up a cap-and-trade program to reduce U.S. greenhouse gas emissions by 20 percent of 2005 levels by 2020, and an 83% reduction from 2005 levels by 2050 (President Obama campaigned on this promise). To ensure that industries stay below these limits, the bill establishes a system of “allowances” that companies must possess in order to emit carbon. These allowances are tradeable, i.e., they can be sold by companies with an excess, or purchased on an open market (much like the stock exchange) by companies that need them. In case carbon allowances rise in price too quickly, the government will create a strategic reserve of about 2.5 billion allowances to create a cushion (presumably to release into the market to bring prices down).

One notable absence in the bill is whether the initial allocation of allowances that each company will get is free, or whether all allowances must be purchased at auction prices. This is a critical point – if the allowances need to be purchased, it will immediately impose costs on businesses, much like a new tax would. The Republicans in Congress, de-fanged as they are, will obstruct such a model as much as they can. Pieces like this from today’s New York Times make the point that the legislation will eventually make electricity more expensive. Today, the White House indicated it was moving away from its 100 percent auction model towards more flexibility, including permitting free allowances at first.

The bill will obviously need more work before it’s ready for prime-time. Although debate will begin this spring, don’t expect a final version until after the midterm elections next year. If the Democrats continue their winning ways, the bill should contain all the elements the White House wants. If the Democrats lose ground, the White House will have to re-think what battles it can win. Working outside all of this is the Supreme Court’s 2007 decision in Massachusetts v. EPA, essentially ordering the EPA to start regulating carbon, and the White House’s commitment to the international community to curb U.S. greenhouse gas production, a commitment the rest of the world wants to see us take seriously.

There’s no such thing as a free lunch. If we are serious about tackling global warming, we have to change the way we live. This hard lesson will become very evident for all Americans as we lurch our way back on to the global stage. No one wants to pay more for energy, but it’s hard to see how we can reduce greenhouse emissions without a corresponding reduction in demand. For IT techs around the country, the lesson is simple: carbon regulation is coming. It won’t come for another 12-24 months, but when it does, we are all going to have to figure out (1) how to measure the carbon footprint of our enterprise (including data centers, client workstations, everything), and (2) what to do if that footprint is larger than what the government says it needs to be.

OK, I realize this blog is targeted at Green IT, but hey, even IT professionals have to drive to work, right? And I’ll bet while there’s no “standard” vehicle type for IT folks, the one thing we all have in common is that we love the smell of a new car. Only packaging peanuts falling from new server equipment could smell better.

Well, as you may or may not have heard, the car industry is in a mess right now. In a good year, the industry is worth between 16 to 17 million units a year, and in a so-so year, maybe 14 to 15 million units. So far in 2009, Americans are on track to purchase less than 10 million new vehicles, far below a sustainable and profitable level. GM and Chrysler are begging for help from Washington, and even healthy carmakers like Toyota and BMW are feeling the pain.

Some in Congress have suggested the government step in to stimulate car sales through a coupon program. The so-called “cash for clunkers” program would provide a financial incentive for consumers to trade in old cars for new models. There are various plans being floated out there, and they all require consumers purchase a relatively fuel-efficient model in order to qualify for the cash. A similar proposal in Germany raised car sales over 20 percent. These proposals have been floating for a while, but before he left for his European trip, President Obama expressed his support for the concept, so the wheels are spinning (metaphorically of course) in Washington to get this done.

Craig Cather, in an op-ed in the Cleveland Plain Dealer recently, pointed out that 78 percent of U.S. annual vehicle sales are to replace older cars, and the population of 1997 and older cars is 86 million vehicles, so there’s a lot of potential here to take a chunk out of that number and replace them. If only 5 percent of those older cars were replaced, it might cost the government $13 billion in cash incentives (a relative bargain compared to the cost of industry bailouts) and lift the industry volume to a sustainable level. It would also reduce greenhouse emissions by about 12 million tons a year.

Therefore, in one program, the government can stimulate car sales and at the same time, take a lot of older gas-guzzling vehicles off the road and replace them with fuel-efficient models, thus reducing our consumption of foreign oil and helping the environment at the same time. What’s not to like? Well, the devil, as always, will be in the details of whatever proposal Washington ends up adopting.

If the government simply gives you cash for dumping or scrapping an older vehicle, the problem is that the government’s payment may be less than what your trade-in is actually worth. Joseph White explored this vexing problem in in the Wall Street Journal yesterday. One bill gathering a lot of attention comes from Rep. Betty Sutton (D-Ohio).

Her proposal, the Consumer Assistance to Recycle and Save Act of 2009 (get it – CARS Act) would give a $5,000 voucher to anyone who purchases a U.S.-made vehicle getting over 30 mpg on the highway. If you are interested in seeing what vehicles would qualify, you can search the EPA’s database (http://www.fueleconomy.gov/feg/advancedSearch.htm). I did just that today. The search criteria I used was 2009 models, all vehicle types other than vans, SUVs, and pickups. Highway EPA mileage had to be above 30 mpg. There are 94 models that qualify. Under Sutton’s bill, only vehicles assembled in the U.S. would qualify, and by my count, that’s a distinct minority of vehicles on this list. As far as the Detroit 3 are concerned, the models covered are the Pontiac G3, Chevrolet Malibu, Saturn Aura, Pontiac Vibe, Chevrolet Cobalt, Pontiac G5, and Ford Focus. I don’t think the Chevy Aveo would count because it’s basically a Daewoo from Korea. Of course, foreign carmakers also assemble in the U.S., so vehicles such as the Camry and Altima hybrids would likely qualify.

However, this morning’s Wall Street Journal reports that the White House is pressing for a program that would replace about 2 million cars and cost taxpayers $4 billion to $6 billion. More significantly, in order to avoid annoying our trading partners, place of assembly will not be a factor in deciding which vehicles count.

I have mixed feelings about this. On the one hand, my free-trade instincts tell me that any time the government launches a program like this, it distorts consumer demand and forces producers into artificial business models that are ultimately unsustainable, and can have unpleasant and unintended consequences. All this talk about money for trading in cars, for example, must surely be causing potential car shoppers to take a wait-and-see approach for the details of the plan to emerge, which causes car sales to sink even lower. On the other hand, the idea that we can take this crisis as an opportunity to get rid of gas-guzzling SUVs and replace them with fuel-efficient cars is appealing. Ultimately, I think that regardless of its ideological merit, this program will cause a LOT of people to trade in their cars and will be quite successful.

Start planning now – what flavor will your new car smell come in?

• Western Blue and BigFix team up to provide a power management solution that enables managing up to 250,000 PCs with a single server to automate power management, saving up to $50 per PC per year over and above any Microsoft operating system settings.
• CSC’s Virtual Desktop Services enables users to access their desktop and work from anywhere, helping “deliver on green agendas.” Sounds interesting.
• Can coal be saved? These and other challenges are splitting apart the modern environmental movement, according to the WSJ.
• The first carbon-neutral NBA games was played on Tuesday last week, offsetting 449 tons of carbon dioxide with a waste recovery project in India, a waste gas project in Germany, hydroplants in China and solar water heating systems in India.
• If you did not turn off your computer, router, switch, or server during the Earth Hour last weekend, you were not alone. Apparently there was no measurable difference in Internet use during the hour.
• Google’s data centers are at least 3 years ahead of EPA standards in terms of being green.
• Could a bad economy help environmental push (link to http://telephonyonline.com/business_services/news/telecom-providers-environmental-concerns-0403/)? Perhaps. This article explores how U.S. telecommunications providers are beginning to explore savings in data centers and tele-working services to cut costs and help the environment at the same time. Most telling subplot: “An AT&T spokesperson said the company doesn’t offer anything specifically to help enterprises go green.”
• Wireless technologies can help save the environment, especially in managing smart power grids, according to Al Gore, speaking at CTIA 2009.
• The $787 billion economic stimulus package presents a “once in a lifetime” opportunity for tech firms to spend on energy infrastructure updates, including smart grids and energy-efficient data centers, according to USA Today.

I love coffee. I’m a three-cup-a-day person, minimum. I’d drink more, but I’m also one of those people who can’t drink caffeine after 4 pm if I have any hope of getting a good night’s sleep. Working at a university, I’m fortunate to have a student-run coffee shop in Miriam Hall, right where my office and classrooms are. The Blend Express, as the coffee shop is called, only serves “FairTrade” coffee, meaning the coffee beans have been purchased at a price from farmers that allow the farmer to have a sustainable farming lifestyle.

At least, that’s what I think it means.

How do I know how much the farmer who grew the coffee beans in my coffee this morning was paid? And how do I know if what that farmer was paid is sufficient? I have no idea. I have to rely on some organization, using standards I don’t know anything about, to say that one particular coffee bean is “FairTrade,” and others without the label are presumably grown by evil warlords hiring crippled ten-year-olds to pick the coffee beans in between hourly beatings.

In spite of my self-professed ignorance, third-party certifications are important to us as consumers. FairTrade coffee. Organic food. UL-certified appliances. Energy Star appliances. Vista Ready. Chartered Financial Analyst. Certified Public Accountant. ISO 9000. Consumer Reports Best Buy. These certifications surround us, and help assuage both our desire to consume as well as our guilt in doing so.

Yesterday, Wendy Bounds published a story in the Wall Street Journal exploring “Eco-Seals,” certifications about a product’s environmental friendliness. There are many of these certifications running around, from the EPA’s “Energy Star” program to Home Depot’s “Eco Options.” Some of these certifications cost companies money to obtain, while others are free. Obtaining at least one green certification seems to be easy enough – one interviewer in the article indicates that “if you want green certification bad enough, you can get it.”

The result is consumer confusion on a massive scale. No one really knows what the labels mean any more, and some consumers are angry. One consumer interviewed for the article would prefer a “universal” green seal. She says: “We can only do so much as a consumer. The government needs to come up with a stamp and someone needs to check the product, and there needs to be liability if they aren’t telling the truth.”

This got me thinking about the possibility of a universal green seal. While it no doubt would be helpful to consumers, I think that ultimately such a program is not workable, for one simple reason: there is too much disagreement on what it means to be “Green.” Now, I understand that all certification programs are ultimately subjective, and that reasonable people can disagree on what is organic enough, safe enough, or high quality enough. When it comes to environmental impact, though, where would such a program even begin? Carbon footprint? Carbon reduction potential? Power savings (and if so, over what baseline)? Barrel of oil impact? Impact on drinking or soil water in production? Recyclability? Hazardous or toxic waste? Bio-degradability? The possibilities seem almost as endless as the possible permutations of “Eco,” “Green,” “Choice,” “Terra,” with “Certified,” “Standards,” and “Seal.”

In spite of the challenges, I worry that without government regulation, green certification will spin out of control as more companies seek to cash in on consumer desire to minimize environmental impact. In general I don’t believe consumers are dumb, and as more eco-seals proliferate, consumer fatigue and numbness will surely follow. So what do you think? Should the government think about regulating these eco-seals (like the FDA regulates the “organic” label), or should consumers just stop being lazy and do their own homework before making a purchase based on environmental concerns?

On Tuesday, the House of Representatives passed the Edward M. Kennedy Serve America Act, formerly known as the Serve America Act and renamed in honor of Sen. Ted Kennedy. The Senate passed its version last week, so as soon as President Obama returns from London, it will be signed into law. The law, which will cost approximately $6 billion over the next five years, will greatly expand the number of positions in AmeriCorps from the current 75,000 to 250,000 by 2017.

Significantly, the law creates the Clean Energy Service Corps, an idea long backed by national environmental organizations such as Green for All. Under the bill, any recipient of federal funds (up to the maximum Pell grant for college students) can use those funds on projects that identify and meet “unmet environmental needs.” Some of the activities listed in the bill include weatherizing housing units for low-income households, building energy-efficient housing units in low-income communities, conducting energy audits for low-income households, providing clean energy-related services in rural communities, educate students and youth about ways to reduce home energy use, assist in the development of local recycling programs, and various projects related to state and national parks.

How does this affect green IT? First, if your organization recruits college grads, it’s important to know that the national service program has been greatly expanded, and if green tech is important to your firm, you can specifically identify grads from this program for recruitment. Second, if your organization is looking for ways to establish some green credentials, partnering with a college or university to offer internships or co-ops to students in the Clean Energy Service Corps can be a terrific way to get your foot in the door early with developing tech and applications. Finally, this program is real. It’s being signed into law, and the federal government is dead serious about funding the Clean Energy Service Corps. Unlike other pie-in-the-sky proposals, if your firm can get in on this on the ground floor, you could be part of a renaissance in public-private cooperation in applying green tech to underserved communities.

I wanted to blog about this last week, but ran out of time as other news grabbed the headlines. It’s surprising to me that this story hasn’t received more airtime, because it’s a significant indicator of how serious the Obama administration is about environmental protection and energy independence. By now, we all know that the administration’s “HEE” (Health, Energy, Education) priorities are being spelled out at every opportunity. They won’t be caught ranking those three priorities, but it’s clear at this point that Energy (and environmental protection) is not the least important.

So here’s the news that seemed to have slipped beneath many radar screens: In Congressional testimony a couple weeks ago, Energy Secretary Steven Chu stated this: “If other countries don’t impose a cost on carbon, then we will be at a disadvantage, and we would look at considering perhaps duties that would offset that cost.”

Translation: If (and it’s a very big If) Obama’s carbon cap and trade program is implemented to begin reducing greenhouse emissions produced by the United States, American companies may be at a competitive cost disadvantage compared to other countries (say, oh I don’t know, how about China) that don’t have similar carbon caps. One way to address or eliminate that cost disadvantage is to artificially raise the price of goods coming from that country by imposing import taxes on it. Which is exactly what Secretary Chu proposed in his testimony.

Using import duties to level an uncompetitive playing field, of course, is not new. The U.S. regularly imposes tariffs when it believes a foreign country is dumping goods in the U.S. below the cost of production, or as retaliation in a trade dispute (we are getting ready to tax the heck out of French cheese because the French won’t eat our hormone-treated beef). Other countries do the same to us (Mexico recently imposed a slew of tariffs for our alleged NAFTA violations including not permitting Mexican trucks on too U.S. highways). These tariffs are entirely the prerogative of the U.S. President under U.S. law (it helps if there’s data to back it up, typically from the Department of Commerce and the International Trade Commission), and do not require Congressional enactment or approval. In other words, this could really happen.

The response to Secretary Chu’s proclamation has been swift and largely negative, and comes largely from trading partners such as China and Australia, as well as conservative-leaning think tanks (which, let’s be honest, never met a tariff they liked). The Wall Street Journal roundly condemned the idea in its editorial pages yesterday. At this point, it’s probably all a storm in a teacup, because the U.S. won’t think of imposing these tariffs until it’s passed carbon cap emissions, which many experts now think may not happen until 2010 at the earliest. However, this is a development to watch. A tariff on products from China (which probably includes virtually all your IT and data center equipment) would be very big news indeed.