Course:ECON371/UBCO2011WT1/GROUP 7 - c

Article

The Environmental Benefits of Cloud Computing - http://www.enn.com/sci-tech/article/43537

Summary

The article argues that the development of cloud computing can significantly reduce the energy consumption of large IT companies, thereby cutting emissions. It also predicts that the use of the technology will triple within the next two to three years. Some estimates claim that American companies can potentially save roughly $8 billion, while cutting carbon dioxide emissions by approximately 30 000 tonnes. The study was published by the Carbon Disclosure Project (CDP), along with the analyst firm Verdantix. The incentives for pursuing the cloud technology are that it has very low cost to integrate the technology into the firms existing infrastructure, and it continues to save money over time with significantly reduced maintenance costs. Furthermore, cloud computing reduces inefficiencies of transactions and is open to anyone with a connection to the internet. The drawbacks include concerns over security of private information, and also that it will lock users into proprietary systems and therefore create large monopolies.

Analysis

An illustration of cloud computing. Source.

The article here speaks to the larger issue at hand; climate change. Many people realize the damages of computers and hardware and their effects on the environment through the leeching of heavy metals and toxic chemicals, but few understand the impact that large tech corporations have on emissions and energy consumption. The technological age and the information age arrived hand-in-hand, with technology and hardware initially receiving the blame for its harmful effects. Today, however, there are millions upon millions of terabytes of information stored in servers all over the world that require a constant flow of energy to keep them running. The quantity of information has grown to the point where it requires massive warehouses with hundreds or thousands of servers with state of the art cooling systems.

According to this report from Data Center Knowledge, Google has roughly 900,000 servers worldwide, and according to other reports it processes over 1,000,000,000 search requests every day. Clearly, the energy required to run this operation is significant. With Facebook reaching nearly 700,000 million users, we can estimate that it cannot be far behind in its energy use. And these are only the two most prominent examples, as there are countless other companies who store and process staggering amounts of information.

"The results show that by 2020, large U.S. companies that use cloud computing can achieve annual energy savings of $12.3 billion and annual carbon reductions equivalent to 200 million barrels of oil – enough to power 5.7 million cars for one year." Carbon Disclosure Project

According to an article in the news agency "Reuters", the computer industry is quickly becoming one of the top emissions producers in the world, rivalling the aviation industry. The massive servers used by Facebook, Google, and Twitter, for example, store their software and countless terabytes of information and require huge amounts of energy to operate and keep cool. The basic logic is as follows: by using cloud technology these companies will require less hardware to run its systems, and therefore need less energy, thus reducing emissions. To better illustrate the concept of cloud computing, consider Apple's new cloud service. Many of us who own iPhones are already familiar with this. Last month, Apple unveiled its new Cloud software which atuomatically backs up its users information stored on their phones and other personal devices onto their Cloud, saving the user valuable space on their devices for other data such as songs or video. While the scale of personal information relative to massive corporations is nowhere near the same, the principle for large companies is comparable. It stores the information on the internet, rather than on its privately owned servers.

An interesting point can be made regarding the cost-beneft analysis of individual countries. Consider a country who has invested heavily in renewable energies such as wind or solar. The benefits of switching to cloud technology would be significantly diminished, as its emissions are already low, rendering the risk of exposing private information much more unappealing. On the contrary, a country that uses non-renewable and/or harmful energy such as coal or hydroelectric may benefit greatly from the transition. This adds an interesting fold to the argument of international policy formation, as it is directly associated with the internet, an entirely global phenomenon.

At this point, it is clear that private firms would be in favour of the technology, as it reduces cost of operation and has the benefit of facilitating transactions and access to information. The opponents of the technology, however, are unclear. Private citizens can argue that they do not want their private information to be stored in a cloud, which is more susceptible to hackers and identity thieves. However, the green movement is a very important issue and there will certainly be those willing to put their trust in this technology. The stance of the government is more uncertain. Government will always be in favour of reducing energy consumption, as it is both politically and economically desirable. However, when considering the needs of citizens and information like health records, bank records, transactions, credit card information, etc, the government has the duty to protect these things. The drawbacks of this system, as mentioned in the original article, is clearly the privacy issues, and is the crux of the cost-benefit analysis. Facebook is already familiar with this highly sensitive issue. The benefits of cloud computing are that it reduces emissions and saves the corporations money. The costs are that it puts in jeopardy people's private information, which could potentially lead to ugly and costly legal battles.

If the cloud technology proves reliable and safe, it will undoubtedly have positive environmental effects. A conservative government will most likely support its development for the economic benefits and encourage firms to pursue the technology through incentives in the form of tax breaks or subsidies to recycle its unused hardware systems. A more leftist government may tend to respect the private information over economic growth and implement policies that prevent firms from storing this information in the cloud system.

There are components of both costs and benefits that cannot have dollar signs assigned to them. For the costs, we cannot assign a dollar sign to people's worry, frustration, or anger of becoming a victim of fraud. For the benefits, we cannot assign a dollar value to the environmental benefits of improving air quality or to preservation of habitat. However, the components that can be assigned a dollar value or statistic are extremely valuable. To quantify the benefits of cloud technology, we simply need to refer to studies like the one done by CDP; a direct measure of the CO2 emissions prevented and dollars saved. To quantify the costs, we refer to the number of instances of fraud and violations of private information, which could also include the severity of the fraud committed measured in dollars lost to the victim.

A more middle-of-the-road approach would be the government endorsing renewable and sustainable energy resources in general, rather than only promoting more efficient technologies for the computer industry. This way the benefits are spread across all industries and it reduces the incentive of firms like Google to save money on energy costs while risking the information of citizens. Emissions are reduced and private information remains secure. However, as mentioned earlier, the issue of creating uniform international policy will be difficult.

Prof's Comments

Interesting idea that cloud computing can save energy. It is a tradeoff between privacy and related risks. A question is what is the best way to promote this. How would a price on carbon (a carbon tax) or a tradable permit system have. Could transferring to the cloud let a company claim a reduction in emissions?

7.5/10