Lawyer Bait

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Friday, July 24, 2009

The Politics of Carbon

I have read two articles this week that point to the same thing from different angles - The Politics of Carbon.

The first article I read - The Green Gotcha - was written by Michael Bullock for his blog at In this article he lays out something that I believe to be true -

The US Government will start taxing those organizations who do not contribute to reducing carbon emissions in their data centers. It is called Cap and Trade. What will likely happen is that data center operators will be taxed on their emissions. It is anyone's guess as to how this will happen but rest assured the US Government needs revenue and this is low hanging fruit. It is feel good legislation - we can encourage/force businesses to be green and if they choose not to - we'll make money off of them in the form of tax revenue.

It also targets a big business segment that is vital to worldwide communications, commerce, and national security. It is also a business that is capital intensive, meaning it is not easy to just change operational models and equipment and go green - the stuff that makes a data center run is expensive and in the capital markets of today - it won't be easy for a company to just go green, or for utilities to just stop producing electricity generated by coal to serve their customer bases.

So what I believe will happen is that data center operators and their customers will need to adapt and 'go green'. This can take the form of utilizing wind power and/or striving for the lowest PUE available to mitigate a tax liability that will no doubt be substantial.

Those that can't and don't will be hit with tax burdens that will no doubt be painful - at least in the short term - because at the end of the day it's customers that will foot the bill in one way or another.

Michael Manos has ecoed what has been said for months - that we as an industry need to have a say in how this cap and trade will go into effect. Legislators who know nothing about data centers, electric utilities, and the way the business of data centers works will wind up telling the entire utility and IT community and industry how we ought to be doing things.

The second article - in the Eithiopian Review says:

The federal government is very unlikely to issue strict green regulations related to data centers... The current administration is very technology-savvy — after all, the current Secretary of Energy Steven Chu was recently the director of the Lawrence Berkeley National Laboratory, whose work was heavily dependent on its data center. Chu did some great work related to Green IT when at the labs. He knows what can and can't be done — and will make sure that data centers aren't hamstrung with unnecessary regulation

If there is tax revenue potential in these regulations (and there is or the Government could care less) then you better believe they will hamstring anyone who can put money into coffers. Besides, the LBNL is funded by the Department of Energy - that takes money. Money that will no doubt come from data center operators (and others).

I for one am not for someone who knows nothing about how an industry works (Legislators) telling me how it ought to be run. Well unless the data center industry and the companies who build and maintain the internet want to be the next GM, Citi, or _______________. That worked out pretty well. NOT!

We do need to form a cohesive trade group and ultimately form a lobby that sets up a PAC or two to insure our interests are protected. If we do not do this as an industry, Our Senators and Congressmen will be running data centers.

I don't think that's such a good idea. Do you?

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