Cloud Computing: Google Apps cloud has a relatively high carbon intensity

Cloud

I have been researching and publishing on Cloud Computing for quite some time here. Specifically, I’ve been highlighting how it is not possible to know if Cloud computing is truly sustainable because none of the significant Cloud providers are publishing sufficient data about their energy consumption, carbon emissions and water use. It is not enough to simply state total power consumed, because different power sources can be more, or less sustainable – a data center run primarily on renewables is far less carbon intensive than one that relies on power from an energy supplier relying on coal burning power stations.

At Greenmonk we believe it’s important to get behind the headline numbers to work out what’s really going on. We feel it’s unacceptable to simply state that Cloud is green and leave it at that, which is why we’ve been somewhat disappointed by recent work in the field by the Carbon Disclosure Project. We would like to see more rigour applied by CDP in its carbon analytics.

Carbon intensity should be a key measure, and we need to start buying power from the right source, not just the cheapest source.

I was pleasantly surprised then yesterday when I heard that Google had published a case study ostensibly proving that Cloud had reduced the carbon footprint of at least one major account.

However, it is never that straightforward, is it?

The Google announcement came in the form of a blog post titled Energy Efficiency in the Cloud, written by Google’s SVP for Technical Infrastructure, Urs Hölzle. I know Urs, I’ve met him a couple of times, he’s a good guy.

Unfortunately, in his posting he heavily references the Carbon Disclosure Project’s flawed report on Cloud Computing, somewhat lessening the impact of his argument.

Urs claims that in a rollout of Google Apps for Government for the US General Services Administration,

the GSA was able to reduce server energy consumption by nearly 90% and carbon emissions by 85%.

An 85% reduction in carbon emissions sounds very impressive – but how does Google calculate that figure? Also worth considering is the age of the server estate – any data center that decommissions older servers in favour of new ones is likely to see an efficiency bump. Assuming the GSA servers running Microsoft apps were more than five years old, they would have seen a considerable efficiency bump simply by running the apps on new servers, on premise or off. Without disappearing down a rathole, its also worth noting cradle to cradle factors in server manufacturing – supply chains consume carbon.

We looked at a whitepaper titled Google Apps: Energy Efficiency in the Cloud [PDF], where the search company shares some of the methodology behind the blog post. We would like to see a lot more detail about assumptions and methods.

The key reference to how Google calculated carbon emissions is this line:
The following summary tallies up every GSA server dedicated to email and collaboration across 14 locations in the continental U.S. and applies the appropriate PUEs, electricity prices, and carbon intensities for each location

Here’s the table:
Google Apps GSA case study

The data in the table above is interesting but if you look at the carbon information, you start to notice something strange – here’s a slightly different view on Google’s data:

Google Apps carbon intensity

While it is no real surprise that Google’s servers produce less CO2 per annum than the GSA’s (4.75 vs 7.69 tons), what is very surprising (to me at least) is the fact that Google’s facilities are significantly more carbon intensive than the GSA’s were (14.5 vs 10.63 tons of CO2 per kWh).

In simple terms, carbon intensity is a measure of the amount of CO2 released in the generation of electricity. The data above, clearly show that the data centres hosting the Google Apps Cloud are not optimised for reduced emissions (the best way for data centers to optimise for reduced emissions is to source electricity generated from renewable sources).

I guess the good news is that, while Google has helped the GSA to reduce its carbon emissions, there’s plenty of room for improvement!

I reached out to Urs for a response to this and because he’s traveling at the minute, the only answer I received pointed out that since 2007 Google’s net emissions are zero. And, in fairness to Google, they do fund some worthwhile offsetting projects, as you can see in the video below (check out the farmer towards the end, he’s just awesome!).

Cloud photo credit mnsc

Microsoft System Center Configuration Manager R3 has Power Management functionality built-in

Microsoft recently released in Beta the R3 version of its System Center Configuration Manager 2007.

Microsoft Corporate VP Brad Anderson, introduced it at the Microsoft Management Summit 2010 saying

The most significant change to the System Center Configuration Manager in R3 is the new power management set of strategies.

By way of background Brad talked about how an increasing number of RFP’s being received by Microsoft were requesting information on what Microsoft was doing to reduce its footprint. According to Brad, reducing your energy footprint is now an imperative to doing business, not just a way of saving the company money.

Microsoft System Center Configuration Manager 2007 R3

System Center Configuration Manager 2007 R3 config screen

Microsoft’s System Center Configuration Manager allows systems administrators to centrally control all kinds of policies on client servers and PCs on a network. Everything from what appears in the Start menu right through to security management policies can be deployed using this software (aside – as a sysadmin of a small co. back in the early 00′s I used the config manager to set people’s wallpaper on their PCs to a html version of the co. phone book!).

The ability to control the energy policies of client PC’s is hugely important because that’s where the maximum number of CPU’s is in most organisations. The Ford Motor company, for example, recently announced that by rolling out 1E’s Nightwatchman PC energy management application it was going to save

$1.2 million and reduce its carbon footprint by 16,000-25,000 metric tons annually

1E are a Microsoft partner and their NightWatchman product goes significantly further with PC power management according to Microsoft’s Rob Reynolds, Director of Product Planning for System Center, who briefed me on the new System Center Configuration Manager (config manager will only put PC’s into Sleep Mode, for example, whereas NightWatchman can shut them down completely and NightWatchman has significant power management controls for XP clients which config manager is missing).

The new software gives you

  • The ability to see and set how and where the power is being used
  • The ability to see what your user activity looks like
  • A set of recommendations on policy to show you how to reduce your power consumption and
  • Tracking and reporting on how much carbon you have prevented from being released as a result of your power management capabilities

On the server front, Rob outlined a scenario where based on reduced demand (overnight, say), virtual machines can be re-provisioned onto fewer hosts and then some of the servers could be put into a low power state. Then as demand picks up once more (following morning) the servers in low power mode can be woken back up and the virtual machines moved back onto them.

While many products such as NightWatchman already exist with this functionality, having it built into Configuration Manager will now put this within easy reach of all Microsoft customers and that can only be a good thing.

Curt Johnson, Chair of Diversey, talks RoI of Sustainability, “CO2 is Waste” and energy savings

Diversey invited me to attend their Climate Change Summit in Amsterdam earlier this week. I went along and was very pleasantly surprised by Diversey’s commitment to corporate sustainability.

Towards the end of the day I had a chat with Curt Johnson, the Chair of Diversey, about their sustainability initiatives. Some of the highlights of the conversation:

  • Sustainability goes back to Curt’s grandfather leading an expedition into the Amazon in the 1930′s! – 1:00
  • Curt’s father (Sam Johnson) banned CFC’s as propellants from all SC Johnson products before there was any legislative requirement – 1:20
  • A cost/benefit analysis shows that being sustainable produces ROI – 2:40
  • Diversey are tripling their target and now aim to reduce CO2 emissions 25% by 2013 over their 2003 baseline – 3:56
  • Diversey’s experience is that for every $1 invested in emissions reductions, they get $2 back – 4:30
  • Diversey are tripling their target and now aim to reduce CO2 emissions 25% by 2013 over their 2003 baseline – 3:56
  • CO2 is a waste by-product of our operations… if you can reduce CO2 it is inevitable that you will create a more efficient system that is more cost effective – 4:40
  • CO2 is waste, so if you minimise CO2, you minimise waste and you maximise efficiency and increase profits – 6:00
  • Diversey’s sustainability initiatives have a huge influence on employee morale, engagement and retention – 6:31

Some other great tidbits which were left on the cutting room floor were:

  • Diversey participate in the EPA’s SmartWay program to reduce the impact of shipping
  • Diversey intend to be the first company to publish the carbon footprint of all of their products on the products
  • Diversey have converted to a daylight office cleaning regime for a one-off cost of $100,000. This move is now saving Diversey 8% on their annual energy bill and
  • Diversey actively works with their customers to help them to reduce their chemical usage!

Should FaceBook’s investors be worried that the site is sourcing energy for its new data center from coal?

Mountain-top removal

Photo credit The Sierra Club

Should FaceBook’s investors be worries that the site is sourcing energy for its new data center from primarily coal-fired power?

FaceBook is fourth largest web property (by unique visitor count) and well on its way to becoming third. It is valued in excess of $10 billion and its investors include Russian investment company DST, Accel Partners, Greylock Partners, Meritech Capital and Microsoft.

FaceBook announced last month that it would be locating its first data center in Prinville Oregon. The data center looks to be all singing and dancing on the efficiency front and is expected to have a Power Usage Effectiveness (PUE) rating of 1.15. So far so good.

However, it soon emerged that FaceBook are purchasing the electricity for their data center from Pacific Power, a utility owned by PacifiCorp, a utility whose primary power-generation fuel is coal!

Sourcing power from a company whose generation comes principally from coal is a very risky business and if there is anything that investors shy away from, it is risk!

Why is it risky?

Coal has significant negative environmental effects from its mining through to its burning to generate electricity contaminating waterways, destroying ecosystems, generation of hundreds of millions of tons of waste products, including fly ash, bottom ash, flue gas desulfurisation sludge, that contain mercury, uranium, thorium, arsenic, and other heavy metals and emitting massive amounts of radiation.

And let’s not forget that coal burning is the largest contributor to the human-made increase of CO2 in the air [PDF].

The US EPA recently ruled that:

current and projected concentrations of the six key well-mixed greenhouse gases–carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6)–in the atmosphere threaten the public health and welfare of current and future generations.

Note the wording “the public health and welfare of current and future generations”

Who knows what legislation the EPA will pass in the coming months and years to control CO2 emissions from coal-fired power plants in the coming months and years – and the knock on effects this will have on costs.

Now think back to the litigation associated with asbestos - the longest and most expensive tort in US history. Then note that climate change litigation is gaining ground daily, the decision to go with coal as a primary power source starts to look decidedly shaky.

Then GreenPeace decided to wade in with a campaign and FaceBook page to shame FaceBook into reversing this decision. Not good for the compay image at all.

Finally, when you factor in the recent revolts by investors in Shell and BP to decisions likely to land the companies in hot water down the road for pollution, the investors in FaceBook should be asking some serious questions right about now.

Do risk and compliance have a part to play in reducing pollution?

Do risk and compliance have a part to play in reducing pollution? EQ2 certainly thinks so.

Steve Burt, the founder and CEO of EQ2, is a former economist having worked at senior levels with Dun & Bradstreet and British Petroleum. His approach, which he calls Granular Resource Economics (GRE), enables companies to quickly see at a glance the entire spectrum of their emissions down to parts per million.

Why is this important?

Well, consider one of the verticals Steve is looking at – the aviation industry (see EQ2‘s excellent Sustainable Flying Report – PDF) . As Steve says, a single flight taking off from an airport, in pollution terms, is not a significant event. But when an airport handles hundreds of flights per day. What is the accumulated pollution from all the flights, incoming and outgoing, it has ever handled? Now project this forward for all the flights it is going to handle…

When you think of pollution from planes, you typically think in terms of CO2. EQ2 go well beyond that though and in the case of aviation, for example, you will also see the numbers for SOx, NOx, and other constituents emitted from jet fuel such as mercury, selenium, arsenic, particulates, etc. When you start to run those numbers for even moderately sized airports, the results can be quite sobering. For airports located near water this could be especially troubling.

And it is not just airports – all organisations need to find out what their liabilities are with respect to their accumulated emissions. A recent report for the UN has found that the world’s top firms caused US$2.2 trillion of environmental damage in 2008 alone. This is obviously unsustainable and is merely a preface to more restrictive pollution controls being enacted which:

is likely to argue for abolition of billions of dollars of subsidies to harmful industries like agriculture, energy and transport, tougher regulations and more taxes on companies that cause the damage

Imagine for a sec if communities in the vicinity of Drax or Kingsnorth coal-fired power plants in the UK decided to sue for the environmental damage wrought on them by these power plants. The kind of information EQ2 can provide would be invaluable in helping these facilities reduce their emissions and minimise the increasing risks associated with being a polluter.

With that in mind, how many firms can afford to remain ignorant of the full spectrum of their emissions?

Nice Dutch project using ‘waste’ heat and CO2 to increase greenhouse yields!

Greenhouse

Photo credit przemion ?

Came across a great story on pressreleasefinder today via Twitter about a project in the Netherlands called WarmCO2.

What is WarmCO2?

It is a project which takes residual heat and CO2 from Dutch fertiliser manufacturer Yara and using infrastructure supplied by partner company Visser & Smit Hanab, pipes them to vegetable growers in the nearby Terneuzen commercial greenhouse project.

From the release:

WarmCO2 will be redistributing up to 84MW of residual heat and 70,000 tons of purified CO2 per year. The CO2 is used by growers to enrich the greenhouse atmosphere and encourage crop growth. Normally they would use a natural gas fired boiler to produce both CO2 and heat throughout the growing season, or a combined heat and power installation that supplies heat, CO2 and electricity, which is then fed back to the national grid.

As a result of the Terneuzen greenhouse project the redistribution of heat and CO2 from Yara via WarmCO2 will save some 52 million m3 of natural gas, which translates into a 90% reduction in fossil fuel consumption. This makes Terneuzen one of the most sustainable commercial greenhouse developments in the Netherlands.

This is being made possible by the “Green Projects” initiative of the Dutch ministries of Health & Environment, Agriculture and Treasury. This initiative offers fiscal benefits to ‘green’ investors and savers, which in turn allows banks to offer financial loans at lower interest rates. Under the Green Projects initiative a maximum of € 25 million can be made available per project.

ABN AMRO are the banking partner in this project and they stumped up the maximum €25 million (out of a total investment of €80 million in the project).

To protect and serve who again?

British riot police confront 'dangerous' protestor

I don’t get it. Really, I don’t.

Climate change is destroying the planet. Oceans are becoming warmer and more acidic, the glaciers and polar ice caps are shrinking faster then even the most pessimistic projections, South Sea islands like the Maldives are becoming inundated by sea level rise and we are in the middle of a man-made mass extinction event where scientists predict that one-half of all species of life will be extinct by 2100.

This is all pretty horrific to contemplate, right?

And yet, when people try to protest peacefully against the polluters who are damaging the planet beyond all recognition, when people try to highlight and bring a halt to this madness so we can save some shred of our decency, as well as some of the lifeforms on the planet, what happens? They are confronted by lines of police in riot gear, at best, or battered and thrown in jail on trumped up charges, or worse.

Look up civil disobedience in Wikipedia and you see a photo of Gandhi! Other famous proponents of civil disobedience are Martin Luther King, Nelson Mandela and Henry David Thoreau.

Why then, when people are looking to better our planet and by extension our lives, are they attacked and frequently imprisoned by the police, the very force who are supposed to protect and serve us? Obviously it is not us whom the police are protecting and serving. Shame on them.

Then today, I see a report that the provincial government in Alberta, Canada is threatening to unleash its counterterrorism plan if activists continue using civil disobedience to protest the tar sands. No really.

From the report:

Canada’s tar sands will singlehandedly produce more greenhouse gas emissions than Denmark, Ireland, Austria or Portugal by 2020 if the development continues expanding at its current rate, according to a recent report written by award-winning business reporter Andrew Nikiforuk

However,

“We’re going to be working very closely with industry and our solicitor general will be reviewing all of the guidelines we have in place,” said a visibly irritated Premier Stelmach in early October.

Fred Lindsay, the solicitor general, went a step further, suggesting the province might use its counterterrorism plan against future protests.

Now people trying to protect life on this Earth are terrorists? Seriously, it should be the people extracting oil from the tar sands who are subject to counterterrorism plans, if anyone.

When will we see the forces of law and order arresting executives of mining companies for their lack of concern for human rights, or lack of concern for the planet?

Photo credit clearbrian

Fufitsu’s 0 Watt PC really does draw 0 Watts when shut down!

I have been creating a series of little videos on the energy efficiency of various items you might find around the home or office (computers, mobile phone chargers, games consoles, printers, and a microwave oven for example). The video of the computer was particularly revealing because even when the computer was shut down (note completely shut down, not put to sleep, not hibernating) it was still drawing 3W of electricity.

However, Fujitsu sent me a PC to try out. The computer they sent me was one of their Esprimo P Series (model 7935) which is supposed to draw 0 Watts of powere on shutdown. They also sent me one of their P-Line Displays which is also, according to them 0 Watt rated.

I was unconvinced but decided to try it out.

As you can see in the video, the computer consumes a hefty 86W when in operation. This is not that unusual for a desktop but compared to my laptop, which only consumes 32W for example, it is quite high. When it is put to sleep, it consumes 1.7W which is quite good for a desktop in sleep mode. However, when I shut it down, the power draw from both the computert and monitor went completely to 0W. If you check out the mobile phone charger videos I posted, you can see that the sensitivity of the power meter I used was 0.1W

I have to admit to being really impressed by this. Still, just how likely is this to fly commercially?

The other computer I tested drew 3W when shut down. It is easy to say 3W but what direct impact does that have on people or businesses?

Well, the ESB in Ireland charge €0.16 (incl. VAT) per unit of electricity (where 1 unit = 1kWh = 1,000W for 1 hour)
So 3W for 1 hour = 3Wh
3W for 1 week = 168 hours x 3W = 504Wh
3W for 1 year = 504Wh x 52 = 26208Wh or 26.208kWh
26.208 units x €0.16 = €4.19 per annum

So if my maths are correct, a 3W trickle of electricity costs around €4.20 a year.

I don’t have any pricing information on the 0 Watt PC but I don’t imagine €4 per annum will swing a purchasing decision either way, even if it is a purchasing decision for several thousand devices. Where it may make a difference is if companies are interested in reducing their carbon emissions.

In the short term, this is a nifty way of reducing energy draw when computers are not in use. Longer term this problem will be resolved by offerings like Cisco’s Energywise whereby sockets can be powered off remotely, on a schedule or when an office is vacated, obviating the need for 0 Watt PCs.

On a larger scale the real problems with regard to energy production and heightened greenhouse gas emissions occur during the working day when computers are typically turned on. Reduce the amount of electricity a computer requires to run, as well as the amount of power it draws when shut down for the real win.

September 21st GreenMonk Energy & Sustainability show

Here is the chatstream from today’s Greenmonk Energy and Sustainability show:
03:30 Tom Raftery: About to kick off the show Info
03:31 cminion: Afternoon
03:31 Tom Raftery: Do we have working audio/video
03:31 cminion: very quiet here
03:31 marilynpratt: sound is a bit off
03:32 yellowpark: morning
03:32 marilynpratt: good
03:32 marilynpratt: yes great
03:32 yellowpark: yes
03:33 Tom Raftery: http://www.colorado.edu/news/r/f6f88ba8825d16175be07468e0d47fc3.html
03:34 dahowlett: hello peeps
03:35 yellowpark: hi dennis
03:35 Tom Raftery: http://www.wired.com/wiredscience/2009/09/gallery_glaciers
03:36 yellowpark: makes for big paddling on the bright side
03:36 monkchips: ah feck tom you trying to depress us again?
03:36 Tom Raftery: http://www.guardian.co.uk/environment/2009/sep/17/bluefin-tuna-fishing
03:36 dahowlett: @monkchips – @tom’s mission in life is to be more curmudgeonly than me
03:36 Tom Raftery: http://www.time.com/time/world/article/0,8599,1921177,00.html?iid=digg_share
03:36 monkchips: ;-)
03:37 monkchips: yay!
03:37 Tom Raftery: http://www.guardian.co.uk/environment/blog/2009/sep/16/climate-change-beer-quality
03:37 marilynpratt: good news from US- is it suspect?
03:37 cminion: ??
03:37 dahowlett: @tom must be ‘pissed’ off
03:38 Tom Raftery: http://www.guardian.co.uk/business/2009/jun/28/bp-alternative-energy
03:38 Tom Raftery: http://blogs.zdnet.com/green/?p=7343
03:38 cminion: Short term goals
03:39 monkchips: i am watching. have been tweeting!
03:40 monkchips: Landis and SAP http://www.landisgyr.com/en/pub/media/press_releases.cfm?news_ID=4012
03:40 yellowpark: @monkchips multi tasking!
03:41 marilynpratt: thanks :-)
03:41 monkchips: there is so much hideous fud in this space
03:41 Tom Raftery: http://www.treehugger.com/files/2009/09/boulders-smart-grid-city-goes-mostly-live.php
03:41 monkchips: this week the story was smart meters to cost consumers £300 each
03:41 dahowlett: Doesn’t @monkchips know? Multi-tasking is said to be unethical. Personally I think that’s a crock
03:41 monkchips: currentcost should be so lucky!
03:42 monkchips: i mean- we know they dont cost that much
03:42 monkchips: absurd!
03:42 Tom Raftery: http://www.guardian.co.uk/science/2009/sep/08/carbon-capture-north-sea
03:43 dahowlett: That’s one giant brain fart
03:44 monkchips: i will happily keep it in my shed
03:44 Tom Raftery: http://www.marcgunther.com/2009/09/20/fpl-americas-no-1-wind-power/
03:44 marilynpratt: so the sea will become a hazardous waste dump
03:45 monkchips: @marilynpratt the sea already is.
03:45 marilynpratt: and we know that never happens in above ground storage
03:45 monkchips: this would actually make use of the big holes from all the oil we sucked out
03:47 monkchips: tom- you got a better idea?
03:47 Tom Raftery: http://en.cop15.dk/news/view+news?newsid=2117
03:48 Tom Raftery: http://www.scientificamerican.com/article.cfm?id=lithium-ion-batteries-hybrid-electric-vehicle-recycling&sc=CAT_TECH_20090916
03:48 monkchips: VERY interesting news from Frankfurt
03:48 monkchips: the electric vehicles were all taken off their stands etc when it opened to the public!
03:49 monkchips: that is – the EVs are all concepts for industry insiders…..
03:51 Tom Raftery: http://solveclimate.com/blog/20090911/aussie-activists-target-world-s-most-polluting-coal-plant
03:52 Tom Raftery: http://in.reuters.com/article/oilRpt/idINB47611720090913
03:52 Tom Raftery: http://www.ptinews.com/news/279619_Victorian-govt-to-export-brown-coal-to-India–Report
03:52 yellowpark: Interestingly, E.On announced today they have produced an electricity menu
03:52 monkchips: ah ****
03:53 monkchips: so much for tech transfer.
03:53 monkchips: they also sell paper to japan
03:53 monkchips: ******* idiots
03:54 Tom Raftery: http://www.snp.org/node/15664
03:54 dahowlett: @tom – where’s the beer?
03:55 Tom Raftery: http://www.forexyard.com/en/reuters_inner.tpl?action=2009-09-16T103243Z_01_LG56714_RTRIDST_0_EU-GRID-NORTHSEA
03:55 dahowlett: them jocks are strapping
03:55 dahowlett: @tom – my head is still on the beach
03:55 monkchips: jocks? you mean “sweaties…”
03:56 Tom Raftery: http://homecamp.org.uk/2009/09/18/adventures-in-home-energy-monitoring-or-how-i-became-the-energy-enforcer/
03:57 monkchips: did you see the comment from his dad?
03:57 monkchips: CLASSIC!
03:57 dahowlett: wonderful!
03:58 marilynpratt: As a parent ROFL
03:58 cminion: Oddly enough for us, my gf pays the elec bill and im the one who is trying to reduce it
03:58 Joe Garde: spend most of my time running around after my kids to turn off lights!
03:58 monkchips: the really crucial point about joe
03:58 monkchips: and energy management
03:58 monkchips: is that he doesn’t believe in anthropomophic climate change!
03:58 marilynpratt: Brilliant
03:59 dahowlett: yes Tom – you are a horrible energy dictator
03:59 Tom Raftery: http://www.newscientist.com/article/mg20327251.300-better-world-redefine-the-bottom-line.html
03:59 marilynpratt: same applies for gas at pump in the states
03:59 dahowlett: Living in Wigan: electricity cost £144/month. Andalucia €50/month
04:00 monkchips: ah shite i have to bank out now. but sarkozy is my man of the week- beyond GDP http://blogs.wsj.com/economics/2009/09/14/sarkozy-adds-to-calls-for-gdp-alternative/
04:00 Joe Garde: WINDPOWER OUTLOOK 2009 PDF http://www.awea.org/pubs/documents/Outlook_2009.pdf
04:00 Tom Raftery: http://news.bbc.co.uk/2/hi/business/8266200.stm
04:01 marilynpratt: just look at the health record in the US – poor
04:03 dahowlett: Wind famrs expanding in Sierra Nevada/Alpujarra
04:03 yellowpark: thanks tom
04:03 Joe Garde: Thanks Tom, glad you made it this week
04:03 marilynpratt: Excellent show Tom
04:04 Tom Raftery: Thanks everyone for your time and interest
04:05 Tom Raftery: (and all your excellent contributions obviously!)

What price carbon emissions?

Excess

Photo credit Pinot & Dita

One of the reasons we are facing a climate crisis is because people have not been paying the full economic price for their carbon consumption. Had they been, we’d be living in a very different world today. A quick comparison of average car fuel efficiency in the US versus the EU (where fuel has typically been priced at 2-3x the US price) bears this out.

When people have to pay a higher price for their emissions, they are less likely to pollute (if only to save themselves money!).

This brings us onto the trickier question though of what is a realistic price for carbon. The recent price of carbon emissions in the EU Emissions Trading System (ETS) has varied from €30 to €10 while today as I write this, it has a spot settlement price of €15.31. That may be current, but is it realistic?

What is a realistic price for carbon emissions?

Well, the reason we are charging for carbon emissions in the first place is to counter the damage being done to the environment by those very emissions – the polluter pays principle. In other words, the price to emit one tonne of CO2 into the atmosphere should be equal to the price of extracting one tonne of CO2 from the upper atmosphere.

And how much is that?

I have no idea to be honest! I have asked several people in this space and no-one has been able to tell me – principally because the technologies to extract CO2 from the upper atmosphere don’t yet exist! You can be sure that it is significantly more than €30 per tonne though.

As global CO2 emissions continue to rise and the effects of climate change become even more pronounced, the price being charged for CO2 emissions globally will need to trend closer to the price of extraction and away from the current €15.

If nothing else, this will encourage us to move to a less carbon intensive lifestyle – manufacturers of carbon intensive products beware!