How green is the Valley? California's energy crisis reveals that tech firms aren't environmentally pure
By Joshua Kurlantzick
US News & World Report
4/30/01
In a swank neighborhood of Palo Alto, Silicon Valley's high-tech community gathered earlier this year for an "Eco-salon" put on by Environmental Entrepreneurs, a group that raises funds for green causes. The February evening began with tours of an environmentally friendly house, built to kill as few trees as possible. Then, the "new economy" titans, outfitted in the Valley's jeans-and-sweater uniform, listened to energy analyst Ralph Cavanagh preach about environmentally conscious ways to boost California's electricity supply. The assembled group murmured agreement with Cavanagh's core message: The IT community can help save both the economy and the environment.
But for all its good intentions, the tech sector has probably contributed more to California's rolling blackouts than to the preservation of its greenery. True, technological breakthroughs make it possible to produce more and pollute less. But California's electricity crisis signals that the high-tech industry may find it hard to make good on its boast that it can do what "old economy" businesses never managed: Be clean and green, and turn a profit.
In theory, the tech economy should be a greener economy. The Internet can save energy by allowing people to work at home, reducing vehicle fuel consumption and the need for commercial office space. E-commerce saves energy, paper, and other commodities, since a warehouse is a more efficient place to stock goods than a retail store. New technology also lets firms operate with lower inventories, which also reduces waste. The "relationship between energy use and economic growth has been transformed by new-economy technology," says Joseph J. Romm, director of the Center for Energy and Climate Solutions.
And the economy does appear to be more energy efficient. Romm points to these numbers: Between 1992 and 1996–before use of the Internet was widespread–the U.S. economy grew about 3.2 percent a year and demand for energy grew 2.4 percent. Then came the Internet boom. Between 1996 and 2000, according to Romm's research, the economy expanded by more than 4 percent per year while energy demand grew only 1 percent.
The trouble is that while the tech-aided economy seems to be more efficient, technology itself is an energy glutton. "The Internet and Internet-related equipment use a sharply increasing amount of energy," says Mark Mills, coeditor of the Huber Mills Digital Power Report, a monthly investment newsletter about power technology. "Every generation of microprocessors consumes more energy than the previous one, and server farms that power the new economy are huge energy users." What's more, Mills says, new innovations prompt Americans to purchase more and more devices, such as PCs, resulting in drastically increased home electricity usage.
Down the drain. The high-tech power drain is obvious in California. Peak electricity demand in Silicon Valley has grown roughly 6 percent per year since 1994; in contrast, demand has been flat in Los Angeles, which has far fewer server farms. The electricity-hungry cluster of Internet data centers in Santa Clara, south of San Francisco, uses as much power as 12,000 homes. Each server farm, which requires electricity around the clock, consumes 85 to 100 watts of electricity per square foot–a typical office uses about 5 watts of electricity per square foot–and requires permanent air-conditioning to keep the machines from overheating. That's one reason why Karl Stahlkopf, vice president for power delivery at the Electric Power Research Institute in Palo Alto, argues that "the current electrical system was not ever designed for the Internet economy."
The server farms, which got their name from their croplike rows of identical terminals, are increasingly unpopular in energy-starved California. The Silicon Valley Toxics Coalition, an activist group that analyzes the environmental performance of new-economy companies, led a campaign against a massive server approved this month for San Jose. It would use as much energy as 180,000 households.
Diesel dirt. The energy crisis is also pushing some new-economy businesses further off the eco-friendly track. Already, several companies desperate to avoid blackouts are purchasing diesel power generators, which are major polluters. And a coalition of Silicon Valley companies, including Intel Corp., is opposing regulatory efforts that would make it harder to get permits for diesel generators and restrict their use.
Tech companies aren't just big energy consumers; they also risk becoming big polluters. Because of the speed of innovation in the tech field, personal computers and other consumer electronics become obsolete quickly. So an increasing number of PCs–many of which contain lead, mercury, toxic gases, and other dangerous materials–are finding their way to landfills, incinerators, and junkyards. When lead leaches out of landfills into water supplies, it can cause serious damage to nervous systems and kidneys, while mercury released into water supplies can cause chronic brain damage. A National Safety Council study estimates that over 315 million computers will become obsolete by 2004, and by 2005 one computer will become obsolete for each new one sold.
Yet there are few public or private computer recycling efforts; nationwide in 1998, fewer than 6 percent of CPUs and monitors were reused, according to the NSC study. That's not the case overseas. The European Union has developed a program under which computer producers help recycle their discarded PCs. But U.S. electronics trade associations have resisted a similar initiative.
Even the eco-credentials of E-commerce companies are being questioned. A recent Carnegie Mellon study pointed out that Amazon.com's overnight delivery of Harry Potter and the Goblet of Fire "probably set a record for the quantities of empty shipping boxes and packaging that would wind up in a landfill," since Amazon sent many of the Harry copies by FedEx, in individual boxes.
Until recently, many high-tech leaders did not have to address questions about their environmental policies. "Growing electricity demand is not necessarily a bad thing, but up until the California energy crisis, many new-economy companies didn't even acknowledge that their server farms use tons of energy," Mills says. Indeed, a recent survey of technology workers conducted by Forum for the Future, a British environmental-issues think tank, revealed that while 65 percent of respondents thought the environment was important, 75 percent believed their businesses had no significant impact on it.
Positive influence? Now that California's energy crisis has highlighted the tech industry's power-gobbling ways, IT leaders still maintain that their net contribution to the environment is positive. "Over time, concrete analyses are showing and will show that new-economy technology will allow a sizable overall gain in energy savings and resource conservation," Romm says.
Nor have they abandoned their claim that environmentalism is good for the bottom line. "Companies that are still wedded to old ways of business, who don't realize that conservation will be one of their biggest money savers, will find themselves behind the eight ball," says Nicole Lederer, cofounder of Environmental Entrepreneurs. And, indeed, classic old-economy businesses are enduring some shocking lessons in energy conservation (read related story).
Some new-economy companies have already found ways to profit and satisfy environmentalists. RYNO Technology, a small company in the San Francisco suburbs, for example, sells "thin client" terminals that replace PCs and are linked to a central server; the terminals use less than one quarter the energy of a standard desktop. Quad/Graphics, a high-tech printing company with more than 8,000 employees, has created a new printer-recovery technology that recycles the chemical solvents used for printing. The process saves money and reduces air pollution. At industry giant Intel, senior management "has its minds focused on environmental issues, down to minute details," insists David Stangis, Intel's manager of corporate responsibility.
They might do well to stay focused. A study by two economics professors at Dickinson College in Pennsylvania found that companies with strong environmental and social records also perform well financially. There may be greenbacks in being green, after all. |
