CRC Study

Possible Leadership Roles for CRC in Developing National Green IT Strategy Bill St. Arnaud [email_address] Unless otherwise noted all material in this slide deck may be reproduced, modified or distributed without prior permission of the author

Executive Summary-1 Federal Government under serious fiscal restraint because of need to reduce deficit A “Green” strategy could reduce overall government costs by as much as 28% - saving jobs and program $800m to $1 billion per year (based on Obama’s program) Estimate IT represents 30% of energy consumption i.e. $300m per year In Canada that means if IT reduced energy consumption by 28% would equal savings of $100m An incentive program to reduce waste is believed to be more effective than dictating that departments reduce energy and heat If departments could capture some of these savings in money for jobs and programs then there would be a lot more interest in reducing energy waste from IT Departments have control over IT and travel expenditure

Executive Summary-2 Unfortunately heat and power usage are under control of PWGSC Besides very little an individual department can do about lighting and heat Further complicated by the fact that PWGSC has outsourced building management to third parties Estimated that data centers alone cost government $100m per year Biggest challenge is transferring savings in IT energy savings from facilities (PWGSC) to individual departments that control IT CRC is unique in that it manages and controls its own energy usage and is large consumer of computing CRC would be ideal organization for a pilot To assess actual energy costs of computing To assess an incentive mechanism where departments are rewarded advanced virtual computing and applications (e.g. video conferencing ) by reducing physical computers and travel

Study Objectives & Methodolgy This report was commissioned by the Communications Research Centre (CRC) as a scoping study to investigate what future roles the CRC could play in an evolving Green IT strategy for the Government of Canada. The scoping study involved telephone interviews, meetings and e-mail exchanges with Green IT officers and CIOs at several Canadian businesses and universities as well as provincial governments. TD Bank, BMO, BC Government, Ontario Government, UBC, US Government CIO office, Canadian Government CTO, Cisco Canada, Cisco Europe, UCSD, etc In addition the author researched extensive material and background information from various sources around the world.

Background According to Canadian Government CTO: There are 325,000 employees in the federal government, 140 departments (all with their own CIO), 124 networks and 144 data centres across the country And 120,000 Wintel and Unix servers use less than 10 per cent of their capacity The Canadian Federal Government is one of the largest CO2 emitters and energy consumers in the country The US Federal Government spent more than $24.5 billion on electricity and fuel in 2008 alone. Obama has committed to a 28% reduction in US government which is equivalent to a cumulative total of $8 to $11 billion in avoided energy costs through 2020. “ Assuming 10:1 ratio for Canada Canadian expenditures are about $2.5 billion on electricity and fuel

Climate Forecasts MIT MIT report predicts median temperature forecast of 5.2 ° C 11 ° C increase in Northern Canada http://globalchange.mit.edu/pubs/abstract.php?publication_id=990 Last Ice age average global temperature was 5-6 ° C cooler than today Most of Canada was under 2-3 km ice With BAU we are talking about 5-6 ° C change in temperature in the opposite direction in less than 80 Years

Climate Change is not reversible Climate Change is not like acid rain or ozone destruction where environment will quickly return to normal once source of pollution is removed GHG emissions will stay in the atmosphere for thousands of years and continue to accumulate Planet will continue to warm up even if we drastically reduce emissions All we hope to achieve is to slow down the rapid rate of climate change Weaver et al., GRL (2007)

Climate tipping points USGS report finds that future climate shifts have been underestimated and warns of debilitating abrupt shift in climate that would be devastating. Tipping elements in the Earth's climate - National Academies of Science “ Society may be lulled into a false sense of security by smooth projections of global change. Our synthesis of present knowledge suggests that a variety of tipping elements could reach their critical point within this century under anthropogenic climate change. “

Earth’s Climate is Rapidly Entering a Novel Realm Not Experienced for Millions of Years “ Global Warming” Implies : Gradual, Uniform, Mainly About Temperature, a nd Quite Possibly Benign. What’s Happening i s : Rapid, Non- U niform, Affecting Everything About Climate, a nd i s Almost Entirely Harmful. A More Accurate Term is ‘Global Climatic Disruption’ This Ongoing Disruption Is: Real Without Doubt Mainly Caused by Humans Already Producing Significant Harm Growing More Rapidly Than Expected” John Holdren, Director Office of Science and Technology Policy June 25, 2008

Federal Climate Regulation October 2009 The EPA Mandatory Greenhouse Gas Reporting Rule (March 2009) in response to Public Law 110-161 (08 Appropriations) 25,000 Tons or More Must Report to EPA. Waxman-Markey H.R. 2454 passes the House in July 2009 by a vote of 219 Ayes, 212 Nays, 3 Present 17% CO 2 Reduction by 2020. Federal Cap and Trade System. Kerry-Boxer Clean Energy Jobs & American Power Act More aggressive CO 2 reduction targets then Waxman-Markey (20% by 2020 over 2005, 80% by 2050). Cap and Trade becomes “Pollution Reduction & Investment”. NYT, 9.30: Best guess is as of September 30 there are about 45 yes votes for the legislation.

State Leadership on Climate STATES 2009 -72% Have Climate Action Plans -42% Have GHG Reduction Targets -66% Are Experimenting with Cap & Trade SOURCE: Pew Center on Global Climate Change, Climate101-State Actions, January 2009 Source: Jerry Sheehan UCSD- CALIT2

Trends: Policy and Legislative Changes Provincial/Territories: -BC (Bill 44, 31) -AB (Climate Change and Emissions Management Act (2007)) -Saskatchewan Bill No. 95) -Manitoba (The Climate Change and Emissions Reductions Act (June 2008)) -Ontario (Draft Bill) -Quebec (Bill 42) -Atlantic Canada – targets set in climate change plans Government of Canada's proposed GHG Offset System July 8, 2009 - Statement of G8 on energy and climate

Bill 44-2007 was introduced in 2007 and enacted into law in 2008. The law is known as the Greenhouse Gas Reductions Target Act. The Act establishes greenhouse gas emission target levels for the Province. 2020 BC GHG will be 33% less than 2007. 2050 BC GHG will be 80% less than 2007. Bill mandates that by 2010 each public sector organization must be carbon neutral. If a public sector organization can not achieve carbon neutrality then they are required to purchase offsets at $24/ton GHG Regulation in British Columbia SOURCE: “Greenhouse Gas Inventory Report 2007”, Ministry of Environment, Victoria, British Columbia, July 2009 Source: Jerry Sheehan UCSD

The Global ICT Carbon Footprint is Roughly the Same as the Aviation Industry Today www.smart2020.org But ICT Emissions are Growing at 6% Annually! ICT represent 8% of global electricity consumption Projected to grow to as much as 20% of all electrical consumption in the US ( http://uclue.com/index.php?xq=724 ) Future Broadband- Internet alone is expected to consume 5% of all electricity http://www.ee.unimelb.edu.au/people/rst/talks/files/Tucker_Green_Plenary.pdf

The Global ICT Carbon Footprint by Subsector www.smart2020.org The Number of PCs (Desktops and Laptops) Globally is Expected to Increase from 592 Million in 2002 to More Than Four Billion in 2020 Data Centers Are Low Hanging Fruit Telecom & Internet fastest growing PCs Are Biggest Problem

Huge jump in carbon footprint from telecom and Internet Huge jump in carbon footprint from telecom and Internet http://bit.ly/4MVcET About 37 percent of the carbon footprint of the entire information and communication technology sector (ICT) in 2007 was due to the energy consumption of telecom infrastructure and devices, according to the Climate Group (14 percent came from data centers, and 49 percent came from PCs and peripherals). Contrast that with telecom’s carbon footprint figure in 2002 which was 28 percent of ICT’s carbon footprint.

IT biggest power draw Heating, Cooling and Ventilation 40-50% Lighting 11% IT Equipment 30-40% Other 6% Sources: BOMA 2006, EIA 2006, AIA 2006 Energy Consumption Typical Building Energy Consumption World Wide Transportation 25% Manufacturing 25% Buildings 50%

Carbon Costs for the University of British Columbia SOURCE: UBC Sustainability Office, August 2009 SOURCE: http://climateaction.ubc.ca/category/emission-sources SOURCE: UBC Climate Action Plan, GHG 2006 Inventory UBC Greenhouse Gas Liability 2010-2012 2010 2011 2012 Carbon Offset $1,602,750 $1,602,750 $1,602,750 Carbon Tax $1,179,940 $1,474,925 $1,769,910 Total $2,782,690 $3,077,675 $3,372,660

Policy Frameworks - 1 Carbon tax e.g. BC Economists claim that this is the fairest and most easily implementable solution. But in the case of Canada any carbon tax would imply a huge transfer of wealth from Alberta to the rest of the country. Carbon Intensity e.g. Alberta These programs are intended to reduce the amount of CO2 per unit energy. They don’t reduce the overall growth of CO2 emissions, but just slow down the rate of growth. Mandated Carbon Neutrality e.g. BC. This initiative is very popular with governments and is being looked at by many jurisdictions. It allows governments to demonstrate a commitment to reducing CO2 without imposing any taxes or other hardships on voters Energy efficiency Mechanisms e.g. UK. The UK’s CRC Energy Efficiency Scheme (formerly known as the Carbon Reduction Commitment) is that country’s mandatory climate change and energy saving scheme

Policy Frameworks-2 Cap and Trade e.g. European ETS This is the current favourite instrument being deployed by many governments around the world. Cap and trade systems can be easily gamed and developing meaningful measurable, verifiable and enforceable offset standards may be very tough. Cap and Dividend is a relatively new concept and works on the similar principle as cap and trade except that all monies used to purchase offsets by large emitters are paid in dividends to consumers. The big advantage that jurisdictions with large emissions are not penalized as the money spent on offsets is returned to the constituents in that jurisdiction. There is currently a cap and dividend bill in the US congress. The proposed cap and trade bill in California is also evolving along these lines. Cap and Reward is a variant of cap and dividend where instead of paying cash dividends from the sale of offsets the money is earmarked for the purchase by consumers and businesses of low carbon products and services such as ICT. This creates a virtuous circle where the money earned by the sale of offsets is used to further promote the reduction of CO2 emissions in a given jurisdiction.

Transferring Alberta’s Wealth to the rest of Canada PM Harper has committed reduction of 20% CO2 by 2020 from 2006 baseline Government will need to collect $40 -$70 Billion in carbon taxes or cap and trade About half the revenues will go to purchasing international offsets www.td.com/economics

Carbon Rewards rather carbon taxes – “Cap and Reward” Although carbon taxes or cap and trade are revenue neutral, they payee rarely sees any direct benefit No incentive other than higher cost to reduce footprint Rather than penalize consumers and businesses for carbon emissions, can we reward them for reducing their carbon emissions or energy consumption? Carbon rewards can be “virtual” products delivered over broadband networks such movies, books, education, health services, collaborative education and research technologies etc Carbon reward can also be free ICT services (with low carbon footprint) such as Internet, cell phone, fiber to the home, etc

TD Bank Has achieved 100 % carbon neutrality through mostly relocating servers and computers from USA to Canada and purchasing RECs Over 11,000 bank branches in USA Intends to reduce purchase of offsets because of problem of finding high quality offsets Have implemented a charge back, cap and reward system, but have not defined rewards Managers for the time being are assigned credits to be applied in a future cap and reward system

BC Government One of the first jurisdictions to mandate carbon neutrality in public sector Has resulted in huge boost in morale for government employees as they are all engaged in finding solution Plan to implement a full charge back and cap and trade system Currently all travel and IT energy expenditures must be recorded in GHG management database Government expects to save between 700k- 1000K mTCO 2 e this year = approx $25 million in savings Additional savings in energy and travel

Cisco Europe Ultimate aim is to create carbon dashboard for each employee showing their instantaneous carbon emissions Currently have a carbon scorecard for each country and major department in Europe Managers are measured against both financial and carbon budgets Strategy is to represent a tonne of carbon in more easier understood terms such as liters of gasoline, flight numbers etc Biggest savings are from travel avoidance and energy reduction as opposed to CO 2 reduction Planning to implement a cap and reward system in the near future

US Government President Obama's Executive Order 13514 the Federal Government is pursuing at least a 20% reduction in green house gas emissions by 2020. Federal CIO Council and agency CIOs may take on the challenge of reducing the impact of agency computing equipment, but so far there has been no concrete progress . Most significant government efforts have revolved around consolidated data centers. The electricity costs for servers and data centers for the US government has grown $450 million in 2006, and it apparently is doubling every five years. That means the cost of the electricity for the federal government’s data centers could, in theory, be $900 million next year. A 1998 survey of federal agencies identified 432 agency data centers. The US government is beginning the largest data center consolidation in history, hoping to dramatically reduce IT operations that are currently distributed among more than 1,100 data centers.

Analysis Most green programs are in their infancy – lots of experimentation Most organizations are moving away from purchasing external carbon offsets to establishing internal markets Finding high quality external offsets is extremely difficult Most companies are achieving carbon neutrality through purchase of RECs and internal savings Most organizations are looking to energy consumption, travel and IT as the primary ways to reduce CO2 Most organizations are starting to implement charge back mechanisms and allocate carbon & energy costs to individual departments Major challenges is that facilities people (heat and lighting) are largely responsible for most energy consumption and there is no tools to allocate per department Often building management is contracted to 3 rd parties e.g. Federal government uses SNC – Lavalin Third party management may, or may not have incentive to reduce energy Most IT costs are buried within overall electrical consumption and difficult to extract separately Cap and reward systems and Green IT are just starting to be explored Hindered by lack of quantitative information on energy & carbon savings of different strategies

Recommendations Develop strategy for cap and reward Focus on energy consumption and travel as the major cost savings for department charge back mechanisms as opposed to carbon emissions But keep track of carbon as carbon neutrality or zero carbon is still the ultimate goal Develop mechanisms and measurement techniques to accurately measure IT energy consumption independent of overall building consumption Try to get an estimate of IT’s contribution to energy consumption as a percentage of entire consumption Try to negotiate with PGWSC a credit mechanism for measurable and verifiable energy reduction through use of GreenStar Network, virtualization, clouds etc

Estimated that IT consumes 30% of government electricity and maybe 50% at labs Suggest that CRC establish pilot program to host CRC (and maybe other government applications) on GreenStar Network Also CRC offer to host some virtualization and use commercial cloud? CRC staff undertake to do baseline energy consumption and CO2 emissions of participating servers and computers Use micro power meters for energy consumption Cisco and others may be interesting in partnering CRC develops tracking database ( or initially spreadsheet) to keep track of energy consumption Need database of detailed metrics of energy consumption and savings of different IT solution CRC negotiates with PGWSC for financial credit on measured energy reduction through ISN (Indepartmental Settlement Notice) Users who give up physical server are guaranteed larger virtual server Suggested “Cap and Reward” Pilot for CRC

Carbon Calculators www. cleanair-coolplanet.org https://www.openeco.org/

Other roles for CRC Partnering in development of 5G green wireless network Becoming a national and international certification body measuring Co2 impact of IT Equivalent to Lawrence Livermore Energy*Star certification program Become centre of expertise on Green IT for Federal Government Work with SMEs under new $40 million showcase program to demonstrate effective Green IT solutions Use CRC as a testing and showcase facility for SMEs to demonstrate IT capabilities under $40m program

New SME Showcase From last budget… … the Government will support innovation in Canada’s small business sector by launching a new Small and Medium-sized Enterprise Innovation Commercialization Program, a two-year pilot initiative through which federal departments and agencies will adopt and demonstrate the use of innovative prototype products and technologies developed by small and medium-sized businesses. Budget 2010 provides $40 million over two years to support up to 20 demonstration projects. To help small and medium-sized businesses take advantage of this initiative, the Government will organize regional trade shows so that companies can showcase their innovative concepts to federal departments. Further details regarding this initiative will be announced later in the spring of 2010.

Conclusions Climate Change is real Sooner or later Federal Government will have to implement a green program Major driver could be cost savings, especially energy consumption and travel Cost allocation to individual departments with incentives will be essential for successful reduction Department managers have little control over heat and lightning. IT is the only infrastructure in which they have control Green IT will be a major component of any such strategy CRC could be resource center for Federal Government on assessing and evaluating different strategies A business case Green IT pilot is important Many issues with respect to earning credit for reduction of energy emissions

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