Profiting from reduced IT energy dependency

The EU's Emission Trading Scheme provides a lucrative market for companies committed to reducing their carbon footprints

I spoke with Ryan Martens, CTO of Rally Software Development, a company that appears to be committed to being green even if it costs them.

Martens' admits, however, that his company buys those RECs "to support the claim that our hosted operations has a zero carbon footprint."

Rally pays Native Energy a dollar per hundred kilowatts, which by the way does decrease its bottom line to some degree.

This costs Rally only $200 per quarter to cover the power and cooling costs. But Rally is also paying extra to buy recycled and compostable materials using a green catalog form Corporate Express and to have its trash hauler pick up compost from its site twice a week.

"I hope to find a new model with the City of Boulder and the University of Colorado where those RECs actually go into a fund to build solar on our building," says Martens, whose heart is obviously in the right place.

Native Energy is putting wind plants on the ground in Native American lands. Companies such as Rally pay Native Energy -- and similar organizations -- for RECs, which enable Native Energy to put up more windmills. That's how it works in theory. How many windmills they actually put up will take some looking in to.

EU offers carbon credits and carbon trades

The EU set up an emission trading scheme that many say is preferable to a carbon tax. If you can reduce carbon emission below a certain cap you can trade it in the European market. There are enforcement and monitoring issues, of course, but carbon trades still seem to me a better idea than our RECs.

Each company in the EU is given a permit for the number of metric tons it can spew out. If the company goes over that cap, it has to buy those extra carbon permits from a company that is under the cap and can therefore sell its earned credits.

According to David Simchi-Levi, chief science officer at ILOG, a supply-chain company that helps companies green up their supply chain, a company can sell its permits at 14 euros per metric ton. Therefore, if your company has a cap of 2 million metric tons of carbon and reduces that by 10 percent, it has 200,000 permits to sell at 14 euros per ton.

Last year, Simchi-Levi says the permit market saw 40 billion euros changing hands from those who can't reduce carbon emissions to those that can.

Adding those kinds of numbers to any company's bottom line could be the right kind of incentive to convince major spewers of carbon emissions to clean up their act and, in so doing, clean our air and our dependence on fossil fuels.

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