The Fairfax Business Research Paper - How IT Professionals Should Respond to the
Carbon Reduction Scheme
Beverley Uther from Fairfax Business Research reviews the recently announced
Carbon Pollution Reduction Scheme in conjunction with market research conducted
by Fairfax Business Research in 2008 specifically to collect information from
Australian IT decision makers about environmental issues relating to IT.
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The Australian Government has committed Australia to reducing carbon
pollution by 60% of 2000 levels by 2050. In the shorter term, by 2020, the
reduction target is set at a minimum of 5%, and possibly by 15% (depending on
the outcome of global climate negotiations in Copenhagen at the end of 2009)
below 2000 levels.
Along with the imperative of the introduction of the Carbon Pollution
Reduction Scheme, with permits being auctioned as early as feasible in 2010,
there is increasing momentum within organisations towards being more
environmentally responsible in a wide range of aspects of their general
operations.
Those in the IT sector need to ensure that they can fulfil the requirements
for environmental deliverables that are within the scope of their role and
responsibilities, and demonstrate that they are doing so.
 In addition, the need to develop a greener technology strategy must now be
viewed through the prism of fiscal prudence. The recent downturn in the global
economy has led many IT decisions makers to plan for reduced IT budgets for
their organisation’s next financial year.
So, in a similar vein to the demands that faced them following the tech crash
at the start of the decade, Chief Information Officers are increasingly likely
be looking to do more with even less than usual. Ensuring this fits alongside
the need to respond to the environmental initiatives which organisations are
already enacting, and the coming introduction of an emissions trading scheme
will provide a significant challenge.
From the results of the research report commissioned for MIS Australia in the
first half of 2008, it would appear that those with responsibility for IT
operations already have some catching up to do when it comes to being ‘green’.
The study collected information from nearly 200 CIOs and senior IT management
executives. They represent organisations operating in all states, across all
industry activities and both the public and private sectors. More than four in
five respondents reported that their organisation had made some sort of change
towards being ‘green’. But this had not reached into the IT department to a
similar degree, with less than half of respondents reporting any specific
strategies for ‘green’ IT.
Despite many organisations striving to be greener, only a small proportion
had gone so far as to measure their organisation’s carbon footprint – so many
have no benchmark data on the impact (if any) any ‘green’ changes have had.
Respondents to the study, when asked to provide their own definition of
‘green’ IT, provided answers such as;
- “reduction of power consumption”;
- “recycling and/or use of recycled materials”;
- ” being carbon neutral or reducing carbon footprint “;
- “having an IT policy that incorporates environmental factors.”
However the majority didn’t provide a specific definition, preferring to give
a generic response about the need to be “more environmentally responsible”.
Specific ‘green’ initiatives generally require measurement and clear
understanding of actual consumption and input values, which, by the admission of
many of the survey respondents, is an exercise that has not often occurred.
The black and white requirements around these issues are, importantly, much
less ambiguous following Government announcements at the end of last year
The Federal Government’s white paper published on 15 December 2008 described
a carbon pollution reduction scheme that provides “… maximal practical coverage
of greenhouse gas emissions and sectors.”
It said the Scheme will cover around 75 per cent of Australia’s emissions and
involve mandatory obligations for around 1,000 entities. Given that there are
around 7.6 million registered businesses in Australia: the overwhelming majority
will not, therefore, face any direction obligations under the scheme.
“The Scheme will have broad sectoral coverage and will cover emission from
stationary energy, transport, fugitive, industrial processes, waste and forestry
sectors.” [for a description of these sectors please see endnote 3]
While the number of organisations directly impacted is small – the efforts of
the scheme to cover three quarters of all emissions means that inputs for every
business will be affected (provided you want to turn the lights on).
The commencement of the scheme is imminent, with the government envisaging
the first auction of Australian carbon pollution permits as early as feasible in
2010. Following that, the scheme should commence during the quarter ending
September 2010.
The government’s whitepaper, while being a comprehensive and detailed
document, has yet to pass into legislation, but is a clear signal to the
business community that the federal government will introduce a carbon pollution
reduction scheme, following its election promises made in 2007.
The question remains about what IT professionals need to do in response.
It seems prudent that a first step should be for IT decision makers to arm
themselves with knowledge about the environmental impact of their own
department. As the discussion of the whitepaper continues, they must continue to
build their understanding of the potential impact of the imposition of a carbon
pollution reduction scheme on industries that provide inputs (directly or
indirectly) to their own organisation generally, and specifically to IT.
Taking into account both our 2008 IT research, and a range of other research
initiatives conducted by Fairfax Business Research among senior Australian
executives, it appears clear that there is also likely to be a need for all
management to be able to better quantify a greater range of indices within their
organisation.
There has been a move towards far greater measurement of return on investment
on an organisation’s expenditure, particularly in the current economic climate,
and this has proved difficult for departments as diverse as marketing and IT.
Formal measurement principles must be applied to environmental issues, both
to forecast costs and to determine the impact or benefits of changes that occur
as a result of new initiatives. This is arguably an area in which some IT
professionals will need to expand their existing skills.
"Given that the survey showed a majority of respondents did not believe that
their team had the capability to deliver green solutions, understand their power
usage and cooling requirements or calculate the environmental impact of their
hardware purchases and use of consumables – these are some
increasingly
important areas in which IT executives must seek to extend their knowledge."
Although the recent government whitepaper may have altered the opinion of
some management teams, which hadn’t previously supported green IT initiatives,
there will be a need for successful IT leaders to communicate to their
management peers about ‘green’ issues at an intelligent level that takes
business driers into account.
Given the financial impact that changes to input costs will have, it will be
prudent for these IT executives to ensure they are part of the team that focuses
on ‘green’ issues for their organisation - and not just within the IT
department.
In the original survey many IT professionals saw ‘green’ IT as being
principally about being more power efficient, and/or reducing power consumption,
however the financial saving is the flipside benefit of this effort. If energy
costs grow as a result of the introduction of a carbon pollution reduction
scheme, the consequent savings will be multiplied.
Increased recycling, and use of inputs which have some portion of recycled
content might either contribute towards cost savings, or reduce the carbon
footprint of the organisation, and could ideally do both.
Finally, returning to the topic of the global economic crisis is unavoidable.
It has clearly been a considerably disruptive influence on all organisations
since the scale of the problems began to become apparent last year. As a result
IT management will be likely to reduce spending, in real or relative terms, in
most sectors.
The drive to become more knowledgeable about topics relating to ‘green’
issues may also assist in achieving this goal.
In addition to the traditional concerns of the CIO, such as stretching the IT
budget further, delivering on the strategic needs of the business,
maintaining/upgrading current systems and incorporating new technologies for the
changing workplace, “being greener” has become a tangible required addition to
the skill-set.
It is a significant opportunity for technology executives to be leaders
within their organisation, on an issue that impacts the business as a whole. All
organisations will eventually have to ask themselves the question “what will the
carbon pollution reduction scheme mean for us?” – being the executive around the
table who has already considered what the answer might be will stand you in very
good stead.
References
[1]
Australian
Government, Carbon Pollution Reduction Scheme Australia’s
Low Pollution Future, White Paper, Volume 1, December 2008, page xxviii
3
Stationary energy:
primarily carbon dioxide from combustion of fossil fuels for electricity
generation; from energy production in the petroleum refining, manufacturing,
construction and commercial industries; and for domestic heating
• Transport:
primarily carbon dioxide from combustion of liquid fuels for road and rail
transport, domestic aviation and shipping
• Fugitive
emissions: primarily methane, carbon dioxide and nitrous oxide emitted
during the production, processing, transport, storage and distribution of coal,
oil and gas
• Industrial
processes: primarily carbon dioxide from chemical reactions associated with
manufacturing processes, mineral processing, and chemicals and metal production
• Agriculture:
primarily methane and nitrous oxide from livestock and cropping
• Waste:
primarily methane and nitrous oxide from solid waste sent to landfill, from the
treatment of domestic, commercial and industrial waste water, and from solvent
and clinical waste incineration
• Land use,
land-use change and forestry: in this sector, only emissions from land-use
change activities—reforestation and deforestation—are counted towards Australia’s
Kyoto Protocol target
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