IBM Expands Efficiency Offerings

The computing giant is expanding its set of tools and services to help companies track and reduce energy use and the associated greenhouse-gas emissions.

by: Jeff St. John

February 13, 2009

IBM is getting strategic with its efforts to help clients track and reduce their energy use and greenhouse-gas emissions – and turn a profit in the effort.

The computing giant announced its "Strategic Carbon Management" consulting service Friday. Think of it as tying all of its energy and emissions reductions offerings – its Carbon Tradeoff Modeler tool, its "Green Sigma" consulting, its Environmental Product Lifecycle Management service and others – into one big package.

The promise is to measure any or all of a company's operations – from travel and transportation to data centers, offices and factories – for their energy and carbon dioxide "footprint," then help them figure out how to reduce them, said Eric Riddleberger, who heads IBM's corporate social responsibility consulting efforts.

So far IBM has named one client – United Kingdom-based construction group Morgan Sindall – for the service, though Riddleberger said others from around the world are signing up.

"The focus for companies is the ability to gain control over their operations ... to understand where they are and position themselves to reduce those costs, reduce those emissions, so their business is fundamentally sustainable," he said.

IBM has been making a big push in energy efficiency and carbon "footprint" reduction for years (see IBM Gives Extra Credits), but it's far from the only one doing so. For giants like Hewlett Packard and Microsoft and startups like Planet Metrics and Carbonetworks, helping other people cut carbon emissions is emerging as a growth business.

That makes sense, given that the push to cut emissions is increasingly backed with the potential for financial pain or gain. Europe has had a cap-and-trade system for years, and President Barack Obama has said he wants to institute one in the United States as well (see Carbon Tax a Better Idea?).

In the meantime, two regional cap-and-trade programs have emerged in the United States. And a number of private exchanges - the Chicago Climate Exchange and American Carbon in the United States and others around the world - are emerging to serve these government-imposed markets.

Overall, carbon markets grew to $118 billion at the end of last year, and could grow to $150 billion by the end of 2009 and as much as $500 billion by 2012, according to New Carbon Finance, a unit of market research firm New Energy Finance.

Beyond meeting regulated caps on emissions and greening a company's corporate image, cutting on energy use also saves money. For an average cost of $300,000 to $500,000, IBM's new consulting service can cut a company's overall energy use by 30 to 50 percent, he said.