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Thursday, August 7, 2008

So What is the Market Worth ?

Tony Chan at Green Telecom Live wrote a great review of the report, “Communicating Green: Telecommunications Value in Promoting Environmental Improvement, 2008-2013,” on his blog. The report notes that the telecommunications industry has the potential to abate as much as US$1.2 trillion worth in carbon emissions in the next five years.

I was interested in how the forecasts of "Communicating Green" compare with SMART 2020, about which I wrote on June 27th. SMART 2020 reports that ICT services have the opportunity to abate 7.8 GtCO2 in 2020.

I spoke with Daniel Bauer, program director at Insight Research Corp, and one of the primary researchers and authors of the report. “Communicating Green’ forecasts the opportunity for the ICT industry to abate 9.8 GtCO2 in 2013. This is pretty bold compared with SMART 2020. However, as I identified in my June 27th post, SMART 2020 is one of the more conservative reports so far.

By trying to estimate a market value for green ICT services, this report has certainly moved the ball forward from previous reports. We do need to take market values with a pinch of salt because so much depends on what you include. Case in point, a service that BT provides to a customer that stands on it own two feet commercially, like the wireless devices in vending machines that I wrote about on July 30th. Now, we identify a carbon footprint benefit to that solution, too. Does the whole value of the solution get attributed to the market for green ICT services, some proportion of it, or perhaps none as the solution existed anyway?

That difficulty, though, doesn’t negate the importance of trying to attribute a market value. "Communicating Green" attributes a value by tying a price of carbon to emissions abated. So, whichever way you look at it, as the report from Insight Research Corp. shows, there is a market out there and it is big. That market value represents the cost of carbon to government, corporations and consumers if they don’t take action. So beware any ICT company, or for that matter any IT department, that is not building this into their strategy.

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