Can Competition Between IT Companies Stop Climate Change?

Competition in the tech industry is notoriously intense. It’s what has driven unparalleled iteration and innovation, spectacular feats of design and function, and the transformation of seemingly far-fetched concepts into now indispensable tools for running our lives and businesses. So what if IT companies, like Google, Microsoft, IBM, and HP, were to apply the same competitive tenacity to solving the climate crisis?

Policies and incentives are desperately needed to usher in an era of rigorous efficiency, renewable energy, and massive emissions reductions. If we hope to put the right conditions in place for a clean energy transformation to occur, bold policies will require strong advocates.

The following comparison is the first in a series of posts that size up tech competitors — not for their market share or latest product designs — but for their responsibility and leadership in applying their considerable influence toward the fight against climate change.

Google Versus Microsoft

Google: Search Giant

Google is one of the world’s largest cloud-based IT companies. Its model is to organize the world’s information online, moving personal and enterprise data to virtual servers that form the “cloud”. Google’s forays into consumer and business applications has hastened the entire industry’s move, including Microsoft, from desktop software to cloud-based web services.

Google’s exponential growth and and self-decreed motto, “Don’t Be Evil”, have earned the company media attention and public scrutiny.  While Google’s rapid growth and increasingly voracious demand for electricity to power its cloud offerings is a serious concern due to its associated growth in demand for coal, Google displays few signs of “evil” in relation to its policy advocacy leadership on climate change.  Thus far, Google has been ahead of the class when it comes to advocating for critical government policy changes in the U.S that would drive clean energy and IT solutions, although we have yet to see similar advocacy in other countries that Google operates in.  

Google has shown vision and leadership by articulating a transformative clean energy pathway, actively pushing for policies such as renewable energy and energy efficiency standards, greater government R&D investment in clean energy technologies, and a national cap on carbon.  However, Google has not always remained a visible player in key debates, and much of Google’s best advocacy, particularly at the CEO level, is well over a year old. To maintain its leadership position in policy advocacy, Google must step up its involvement, both in the U.S. and internationally, and significantly within the energy policy arenas of the countries in which it operates.

Microsoft: Software Giant

Microsoft invested more than any other IT company to build its political lobbying clout in Washington DC and Brussels. In the U.S., Microsoft has become one of the largest contributors to political campaigns over the last ten years, and averaged nearly US$9 million in lobbying expenses each year from 2003-2008.  Despite its significant political influence and access, Microsoft has not demonstrated consistent leadership in calling for policy changes necessary to reduce emissions and drive deployment of renewable energy solutions or energy efficiency technologies.

Although former CEO and Microsoft Board Chair, Bill Gates, recently made news with an appeal to increase government R&D spending on clean energy innovation, current CEO, Steve Ballmer, has thus far failed to effectively articulate the importance of climate protection or the need for strong government policy to drive an energy revolution. The strongest example of Steve Ballmer’s interest in the climate is an internal email to Microsoft's employees, which detailed how Microsoft is working to reduce its environmental footprint and that of its customers.

Other Microsoft representatives, such as Craig Mundie, Chief Research and Strategy Officer, and Rob Bernard, Microsoft’s Chief Environmental Strategist, have spoken publicly about the role of IT technologies in making a shift to zero carbon energy sources. However, Microsoft’s policy advocacy and the priorities of its lobbying team do not demonstrate significant leadership in the driving of policy changes needed to address climate change and unlock the clean energy business opportunities that Microsoft and other IT companies could deliver.

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. The letter urges, “We must put the United States on the path to significant emissions reductions, a stronger economy and a new position of leadership to stabilize our climate. The costs of inaction far outweigh the costs of action."  

Microsoft’s statement sounds pretty good until you compare it to the rhetoric of some of the biggest and dirtiest coal-burning utilities and discover that there’s little distinction.  If Microsoft wants to differentiate itself as a leader in the climate debate, it must clearly articulate and push for specific climate and energy policy goals to back up its general declaration of support.

How Microsoft and Google Can Drive the Clean Energy Economy:

Greenpeace’s Energy [R]evolution, a blueprint for global energy transformation, highlights policy positions that require immediate support from industry giants like Microsoft and Google in order for swift change to occur. Here is how the political advocacy efforts of competitors Google and Microsoft compare on these critical climate measures:

Government needs to put its money where its mouth is.

Google’s CEO, Eric Schmidt, has publicly articulated a compelling business and environmental case for the transition away from fossil fuels and toward a clean energy economy on multiple occasions, drawing from his company’s Clean Energy 2030 Proposal. Schmidt tackled power generation and transportation in a speech at the Corporate EcoForum in September of 2008, calling for 100 percent of energy to come from renewable sources by 2030 and to replace half of the national vehicle fleet with plug-in hybrid electrics.

Schmidt has been critical of governmental climate leadership, and once went as far as to decry, “We have a total failure of political leadership, at least in the U.S., and perhaps the world.” In a 2009 Wall Street Journal interview Schmidt pointed to the relative cost of wind power versus coal, matching a critical Energy [R]evolution principle with his assertion that government must shift subsidies away from fossil fuels in order to prioritize rapid and widespread clean energy deployment.

Make the grid smarter and cleaner.

In order to replace fossil fuels with renewable energy without an increase in nuclear power, we will need to improve power distribution networks and provide better consumer access to information about energy consumption. In California, a state which has been at the forefront of smart grid development, Google has more than once intervened in the Public Utility Commission’s rulemaking on smart grid technologies. The company also sent a letter to President Obama in April, 2010, calling for incentives for technologies that give households and businesses feedback on their electricity use.

Google’s own Powermeter technology stands to benefit from policies that bolster advanced grid metering infrastructure. Microsoft, despite having its own product offering, Hohm, which measures home energy use and efficiency, has not meaningfully stepped into the policy debate around access to smart meter data.

Increase Clean Energy R&D.

In January, 2010, Google provided testimony to the U.S. Senate finance committee and signed onto a letter to President Obama in support of the inclusion of a “green bank” in the federal jobs bill. Its request for the creation of a Clean Energy Deployment Administration to finance emerging clean energy technologies is aimed at spurring employment in the emerging clean energy sector.

In June, 2010, Microsoft founder, Bill Gates, released “A Business Plan for America’s Energy Future”, a report that calls for government investment in energy innovation to triple. Gates contrasts his proposal to status quo energy policies favoring fossil fuels, “Most of the technologies that underlie the current energy system were invented decades ago and are increasingly costly, brittle, and incompatible with a clean future.” Gates, a strong supporter of nuclear energy, disappointingly includes nuclear in his definition of “renewable” rather than calling exclusively for truly renewable sources, such as wind and solar.

Establish Bold and Binding Energy & Climate Policy.

Energy Efficiency: In a letter to Congress dated April 23, 2009, Google’s Climate Change and Energy Initiatives Director detailed the company’s support for an energy efficiency resource standard. Microsoft signed onto a letter to the U.S. Senate in September 2009 in support of energy efficiency provisions in two pending energy bills.

Renewable Energy: Google supports a national renewable energy standard, following the lead of states that have adopted a requirement of 25% of energy sold to be supplied by renewable by 2025. Google’s “Clean Energy 2030” prescribes a slightly more aggressive target: two-thirds of U.S. electricity generation to come from renewables by 2030.

A Cap on Carbon: Google has been supportive of putting a legally binding cap on carbon pollution, as demonstrated by its backing of the primary climate bills debated in the U.S. House and Senate in 2009.  On the other hand, Google needs to put forward a vision that links its transformational Clean Energy 2030 vision to international climate policy and apply its ideas in the international arena. Microsoft has been largely silent on U.S. domestic cap and trade climate legislation, though the company did sign onto a letter in December, 2009, urging President Obama to reach an international agreement on emissions reductions at the Copenhagen climate negotiations.

Cool IT Leaderboard: Advocacy Score Comparison

Google: 25/35 points

Microsoft: 12/35 points

Check out Google and Microsoft’s complete scores, and see how they compare to other IT companies on the Cool IT Leaderboard.