How "Cap & Trade" Could Affect Data Centers 

 

"If you operate large data centers (or anything else that uses lots of electricity), its a good time to take stock of your electricity usage and where you're getting it from.", according to Environmental Leader's July article.

Obama's Administration has a pending "Cap and Trade" Energy Program that is intended to make carbon dioxide emissions more expensive and ultimately economically unsustainable. Companies will be required to purchase emissions credits to compensate for their inefficiencies in carbon management. According to AFCOM's July newsletter, "Consequently, data centers must decrease consumption, increase efficiency, and enhance productivity."

 

Cap and trade (or emissions trading) is defined as an administrative approach used to control pollution by providing economic incentives for achieving reductions in emissions of pollutants.

A government or international entity sets a limit (or cap) for each company on the amount of pollutants that can be emitted. Companies are issued emission permits/credits, which give them the right to emit a specific amount of pollutants.

The total amount of allowances and credits cannot exceed the cap, limiting the companies total emissions to that level. Companies that pollute more than allowed must buy credits from companies that pollute less. This transfer of allowances is referred to as a trade.