In the business world, nothing induces a healthy round of hand-wringing and cold sweat like the specter of governmental regulation. For better or worse, lawmakers in the United States and beyond have passed such regulations as HIPAA (the Health Insurance Portability and Accountability Act) and Sarbanes-Oxley, acts that have forced organizations to change the way they run their operations. IT departments have certainly felt the pain as they've struggled to ensure their organizations are in compliance -- and, at times, struggled to play catch-up when certain regulations have seemingly caught company executives flat-footed.
If your organization has at least one datacenter, it's time to prepare for a new round of regulation, such as the United States' Waxman Markey bill, warns Jim Smith, CTO at Digital Realty Trust, owner and operator of datacenters around the globe. Carbon taxes or cap-and-trade systems both in the United States and abroad will cause fluctuation in energy prices; plus, they'll force companies to measure and report greenhouse gas emissions. Further, even companies headquartered in the United States might feel the regulatory sting from the United Kingdom.
[ Digital Realty's Mike Manos has urged datacenter operators to unite to ensure regulations actually make sense. | Another reason to cut carbon emissions: the threat of lawsuits. ]
"There is regulatory risk heading our way as energy efficiency and other global climate change and economic issues have come to the forefront," cautions Smith in a recent video in which he discusses the impact of carbon regulation. "[I]n the last maybe 18 months, I have spent a good third of my time dealing with this topic."
Brace for volatile energy prices
Among the effects of a cap-and-trade system or a carbon tax, it's "going to change the face of power economics in the United States," Smith says. "It's going to have an intersection of carbon as a price -- carbon externalities will be priced in the power market -- and it's going to have a collision with the state of deregulation in the United States."
The level of utility regulation varies from state to state, Smith notes: "You've got markets like the ERCOT grid in Texas that are highly deregulated and functional, very well deregulated markets that are primarily driven by gas. And these are in contrast to some of the East Coast markets that are primarily coal-driven and heavily regulated."