How do Google and Microsoft compare on climate?

Background - 28 April, 2010
While no two IT companies are identically structured or provide the same exact products and services, it's good to take a closer look at the actions of close competitors. In the first in a developing series of comparisons, we look at the action of Google and Microsoft on our different climate criteria -- how they stack up on climate advocacy, as well providing IT solutions to climate change and how they take care of their own environmental footprint.

Summary

Google

Google is one of the largest “cloud” based IT companies. Its business model is to put all of the world’s information online, an endeavor requiring large and energy voracious data centers. With the self-chosen motto, “Don’t Be Evil,” Google knows it has a huge carbon problem if the current electricity grid remains heavily dependent on fossil fuels.

However, Google has steadfastly refused to release any meaningful data on its own energy use or carbon emissions, citing concerns over disclosing information that could be used by its competitors, even though its arch-rival Microsoft is significantly more transparent on this issue. Google’s explosive growth through Gmail, YouTube, and its soon-to-be online library are ultimately driving emissions higher, not lower, and creating a greater demand for coal and other fossil fuels. While it has been one of the most thoughtful policy advocates among IT companies, Google’s advocacy would be much more credible if it admitted that it has a carbon problem and called for the necessary policy changes to solve it.

Microsoft

As the largest software company in the world, Microsoft has unparalleled reach into homes, businesses, and governments. Microsoft has only recently begun to show an interest in leveraging this reach to empower significant energy savings beyond the operational footprint of the PC. While Microsoft has traditionally had a lower greenhouse footprint than others in the sector due to its focus on software development, the rapid shift Microsoft is making to “cloud” based software solutions, in competition with Google, will fundamentally change its emissions profile and is likely a significant reason behind its refusal to adopt an absolute emissions reduction target.

Policy Advocacy

Google

Among the IT companies, Google has been the strongest in advocating government policy changes that would drive low carbon sources of electricity, including support national renewable energy and energy efficiency standard and in the United States, greater government R&D investment in clean energy technologies, as well as support for a national cap on carbon (though Google appears yet to be convinced on the efficacy of cap and trade).

Google continues to be among the strongest of the IT companies in advocating government policy changes to drive low carbon sources of electricity at several levels within the U.S. Google has also shown recent leadership in calling for the need for consumer access to information on their energy consumption, such as the data to be generated from smart meters. However, despite its rapidly growing global presence, Google does not appear to direct its climate and energy policy leadership efforts in countries outside of the United States.

CEO Eric Schmidt has publicly articulated a compelling business and environmental case for the transition away from fossil fuels and to a clean energy economy on multiple occasions, drawing from Google's Clean Energy 2030 Proposal. Though he needs to make this case more frequently and to key decision makers, linking it more directly to climate policy, it is at least a transformational vision.

Microsoft

Microsoft has become one of the largest contributors to political campaigns over the last 10 years, and has averaged nearly US$9 million in lobbying expenses each year from 2003-2008. Despite its significant political influence and access, Microsoft has not demonstrated regular leadership in calling for policymakers to adopt the policies necessary to reduce emissions and drive deployment of renewable energy solutions or energy efficiency technologies.

Microsoft did take a small step forward in advance of the UN Climate negotiations in Copenhagen last year, supporting a call to President Obama to reach a deal in Copenhagen that would have resulted in a legally binding agreement.

Despite former CEO Bill Gates recently coming forward to speak forcefully in favor of a transformation to our energy system, Microsoft CEO Steve Ballmer has, thus far, failed to effectively articulate the importance of climate protection and clean energy transformation, or the need for strong government policy to drive this transformation. The strongest example offered was a internal email to Microsoft's employees detailing how Microsoft was working to help reduce its environmental footprint and those of its customers. Craig Mundie, Microsoft's Chief Research & Strategy Officer did make a speech before electric utility executives focused on the need to transition to a zero carbon economy, but lacked real urgency.

IT Solutions

Microsoft has a much broader mix of solutions in its climate solutions development pipeline than Google, as Google's direct solutions offerings are limited to PowerMeter at present. However, as many of Microsoft's solutions are apparently not mature enough for Microsoft to provide data on their impact, we will limit our comparison to a common solutions offering: energy use software.

Google

Google, PowerMeter is a free electricity usage monitor, which can provide live data from either a smart meter or a monitor attached to your meter. By leveraging live data, PowerMeter provides consumers detailed insight on the actual electricity footprint of appliances and other products in the home.

Because it requires additional hardware to work, PowerMeter is directed to a more limited audience currently, but could help establish important precedent on the impact of empowering the consumer by making the data directly available, not necessarily a priority among electric utilities. To Google's credit, they have included consumer access to information into their policy advocacy. Many utilities are highly resistant to Google's efforts to enter this market or having access to their customer's smart meter data, as they do not want Google to become in-between them and their customers.

Microsoft

Microsoft, Hohm serves more as an online energy advisor and manager, allowing consumer to input (or eventually import) their utility data and build a profile on information on your home energy use. Hohm will take this information to make recommendations to save energy drawing upon best practice from energy experts.

Because Hohm does not require additional hardware, it has a significantly larger potential audience than PowerMeter currently. However, without or until the inclusion of live energy use data, its potential for empowering customers to change their behavior would appear to be less than PowerMeter. Microsoft appears to be offering this as part of a potentially more integrated solutions software offering that would create a bi-directional data bridge between consumer' and electric utilities.

IT Solutions Metrics

Google

Though Google does not have any solutions of their own toward using Plug-In vehicles (though see PowerMeter, above), the analytical work done in house by Google as part of the ReChargeIT initiative to quantify the greenhouse savings from using plug-in hybrids is a solid contribution to the debate, providing real world data and metrics for measuring the potential impact of plug-in hybrid development.

Microsoft

The carbon footprint analysis on digital music delivery that was funded by Microsoft and Intel was also a very good example of analysis needed to get more specific in the level reductions that can be achieved through "demateralization" solutions such as digital music delivery, and helpful to unpack the assumptions that are to be used in such an analysis. We strongly encourage Microsoft to conduct similar analysis to other solutions, particularly those with higher GHG reduction potential.

IT Carbon Footprint

Google

Google has steadfastly refused to release any meaningful data on its energy use or carbon emissions, citing concerns over disclosing information that could be used by their competitors. However, Google is one of the few IT companies that does not disclose its GHG emissions. Google does not have a greenhouse reduction target, opting instead to become "carbon neutral," which it has apparently reached at least in part through the purchasing of carbon credits from offsets.

The difficulty in being "carbon neutral" is clearly demonstrated by Google. Its US$600 million datacenter in Lenoir, NC operates in Duke Energy service territory, which is 50 percent coal powered. Even if Google is buying the lowest carbon electrons on the grid, the energy demand of this datacenter has fundamentally changed the demand in this load center, and in turn increasing demand for coal fired power. Similarly, while Google can be rightly proud of its advances in engineering that have significantly improved the efficiency of its data centers, the dramatic growth the company is experiencing that despite its energy efficiency gains, it is still ultimately consuming more electricity.

Microsoft

Microsoft has adopted an intensity goal, rather than an absolute goal, to reduce its carbon emissions (30 percent below 2007 levels by 2012, by unit of revenue). While Microsoft has traditionally had a lower greenhouse footprint than others in the sector due to its focus on software development, the rapid shift Microsoft is making to "cloud" based software solutions to compete with Google and others will fundamentally change its emissions profile, and is likely a significant reason why it has refused to adopt an absolute emissions reduction target.

Renewable Energy

Google

Google has demonstrated an entrepreneurial, even venture capitalist approach to supporting development of renewable electricity technologies under its RE-C initiative, whose stated goal is to develop utility scale renewable energy cheaper than coal. Google has thus far reported investments US$35 million in innovative renewable energy technology projects, which is commendable, not to mention understandable given Google's voracious demand for electricity. Google's recent approval of its status as a wholesale buyer and seller of electricity by the U.S. Federal Energy Regulatory Commission (FERC) at the beginning of this year is a potentially notable development, as it could allow Google greater control over its electricity supply, including the purchase of greater amounts of renewable energy for its growing fleet of datacenters. However, without any data points on Google's energy use, its greenhouse gas emissions, or the potential renewable electricity generated from these investments or electricity purchases, it is impossible to evaluate them in terms of actual climate leadership.

Microsoft

Microsoft has reported purchasing 24 percent of its energy from renewable resources, substantially meeting its goal of 25 percent by 2012.

 

Specific Comparison of Climate & Energy Advocacy

 

Google

Microsoft

Copenhagen 

No Advocacy Reported

Joint Letter to President Obama

National Climate/Energy Policy

Joint Letter to US Senate

Letter to President Obama on Energy information

Jt letter to President Obama on Clean Energy Finance

 

DESC Letter to US Senate

Testimony

Dan Reicher: House Energy & Commerce(4/23/2009)

Dan Reicher: Senate Energy & Natural Resources (4/28/2009)

 

Ads/Speeches

Eric Schmidt's-Washington DC,

Eric Schmidt'-Commonwealth Club, SF

Craig Mundie's Speech to Edison Electric Conference

Rob Bernard's Speech, OECD Conference

Other

California PUC Comments on Smart Grid

 

Members of

President's Council of Advisors on  

Science & Technology (PCAST): Eric Schmidt

US Chamber of Commerce

President's Council of Advisors on Science & Technology (PCAST): Craig Mundie.

US Chamber of Commerce

Digital Energy Solutions Campaign.

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