Carbon tax turns eyes to energy, datacentres

Green datacentres and keeping an eye on reducing energy consumption will be key to keeping costs in control, the information and communications technology industry has said of the government's plans to introduce a carbon tax for the top 500 Australian polluters.

On Sunday, Prime Minister Julia Gillard revealed the full details of the Federal Government's plan to introduce a carbon tax starting at $23 per tonne to be paid by the top 500 polluters in Australia from 1 July 2012.

The collected funds will then be passed back to lower income consumers in tax cuts to compensate for price hikes, and will also go to fund renewable energies.

The Australian Information Industry Association (AIIA) CEO Ian Birks said the announcement was a "bold but necessary and balanced approach".

"The ICT industry has long promoted the importance of developing sustainable industry, and we see this as an important step forward," Birks said in a statement. "There is now a clear impetus to act and a framework to act within. Taking action now will be less costly and disruptive than taking action later."

Although the AIIA did not have a position on whether the tax was the best method to reduce carbon emissions, Birks said that now the scheme had been announced, it would provide certainty for the industry.

"The encouraging outcome here is the understanding that ICT will help secure a clean energy future for Australia. The fact that a pricing mechanism on carbon is only one part of the broader package to help transition our country to a clean energy future is a sure sign that the government understands the role of ICT in enabling this transition pathway," he said.

Vodafone Hutchison Australia said it was reviewing the government's plans and looking on how to best manage its energy consumption.

"We have thousands of network base stations across the country, several datacentres and larger network hubs, around 600 stores and several corporate office sites. In our view, gaining a clear and accurate understanding of our energy use and carbon emissions is just part of good and responsible management practice for our company," Vodafone said, adding that the company had set up an energy management team in January to review the company's energy use.

"Now that the bulk of our operational changes have been completed post-merger, we're in a position to set targets for energy and carbon emissions, which we'll be completing this year. The EMT is tasked with identifying, assessing and implementing energy efficiency initiatives, reporting progress regularly to our executive team."

Optus said it was committed to reducing its greenhouse gas impact.

"Like all members of the industry, Optus is impacted by the wider industry issue of rising electricity costs," the telco said. "Optus continually looks at ways to become more energy efficient as part of our ongoing commitment to reducing our greenhouse gas impacts. This also enables us to manage and decrease costs associated with energy consumption."

IT services company Fujitsu Australia's director of sustainability Chris Seale welcomed the government's carbon tax plan.

"Fujitsu supports a carbon price as a market-based mechanism that will be the most effective way to achieve the required reductions to CO2 emissions," he said. "The carbon tax is one of many different approaches to drive change."

The company would likely be hit with additional costs due to electricity price rises, Seale said, but the company would address this through its energy saving projects.

"The biggest area for cost increases will be in the cost of electricity, which will increase by around 20 per cent based on our existing consumption," Seale said. "We are working on initiatives to decrease energy usage for the company to balance the projected increase in costs."

Datacentres will also have a role to play in reducing carbon emissions, he said.

"Fujitsu has implemented a robust sustainability program on a worldwide basis that is focused on reducing the overall footprint for our customers and for our own operations. This includes the commissioning of world-leading datacentres that employ the latest technology in power management and cooling," he said.

"Fujitsu has also placed a great deal of focus on cloud, which has the overall effect of lowering the net carbon footprint."

Australian Computer Society president Anthony Wong said that technology would be key to offsetting carbon.

"Australian businesses will now have to invest in renewable technologies and practices. Long-term practices will need to be established to provide solutions for everything from waste management, such as how businesses will get rid of old computers, to datacentres and how servers will be cooled."

NextDC CEO Bevan Slattery told the Australian Financial Review yesterday that the carbon tax would drive businesses to use datacentres that are energy efficient, but warned that the increased costs of electricity for running datacentres would be passed onto customers.

The Internet Industry Association (IIA) said that because hosting was a global market, datacentres that are not subject to a carbon tax overseas may potentially have an advantage on price alone. However, IIA added that Australia may have the advantage for people concerns about data hosted overseas.

"It's hard to tell at this early stage which way that dynamic will play through," the IIA said. "One would hope the underlying drivers here would be to accelerate moves towards greener datacentres in Australia."

The IIA said there was still a lot of political uncertainty around the carbon tax, with the Opposition "intent in its opposition to the policy". The carbon tax had much more political uncertainty than the controversial National Broadband Network project, which had already had a number of contracts signed and legislation passed for it, the IIA said.

Steve Hodgkinson, research director for Ovum, said the announcement gave businesses clarity over why they should invest in technology to reduce carbon emissions and systems to monitor energy consumption. Hodgkinson said that IT would be well placed to implement any changes required before the start of the tax next year.

"The speed of technology obsolescence in the IT industry is such that large IT providers have strong commercial incentives anyway to invest in the latest technology, which is also the most energy efficient," he said. "The Climate Change Plan may create additional incentives for economies of scale and M&A activity to consolidate facilities towards the highest standards of energy efficiency."