Microsoft Places a Price on Carbon

In a significant move, Microsoft is doing what the federal government should do – place a price on carbon to drive rapid increases in efficiency.

Beginning on July 1, Microsoft announced it will be carbon neutral in all its direct operations including data centers, software development labs, air travel, and office buildings worldwide.

That’s no small feat for a company with 92,000 employees spread across 100 countries.

In his blog, Chief Operating Officer Kevin Turner says, "We are hopeful that our decision will encourage other companies large and small to look at what they can do to address this important issue.

The centerpiece of the plan is set an internal price on carbon, which will infuse "carbon awareness" into every part of the business, creating accountability in all business divisions. That will incentivize greater efficiency, increased renewable energy purchases, better data collection and reporting, and an overall reduction in environmental impact.

The carbon price will be based on the market prices for renewable energy and carbon offsets. Microsoft will purchase renewable energy and carbon offsets for any emissions they can’t eliminate through efficiency measures.

"We believe climate change is a serious challenge requiring a comprehensive and global response from all sectors of society. This carbon charge-back model is one way we seek to both reduce our impact and test new approaches which we hope are broadly useful for other organizations," says Turner.

Other steps Microsoft is taking:

After doing a smarter buildings pilot on Microsoft’s Redmond campus, they learned that buildings can become dramatically more efficient by introducing software to better use current building systems. A capital-intensive retrofit isn’t necessary.

By integrating powerful analytics that add intelligence to existing building infrastructure, our buildings got smarter, more efficient and less costly to operate, they say.

Software solutions are projected to save $1.5 million dollars in energy costs in FY 2013, with an 18-month payback.

Microsoft is working with CarbonSystems to implement an Enterprise Sustainability Platform, which automatically captures and extracts environmental data from multiple sources, uncovering more opportunities to reduce its carbon footprint.

A whitepaper outlines ways the IT industry can think about where energy is used and potentially wasted as a first step to drive efficiency throughout the industry.

Earlier this month, Microsoft was recognized as the third largest purchaser of renewable energy in the US by the U.S. Environmental Protection Agency. The 1.5 billion kilowatt-hours (kWh) of power a year is enough offsets 46% of its electricity use.

Read Microsoft’s Blogs:

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