Are cloud carbon calculators full of 'hot air'? We asked the experts.

  • AWS, Google Cloud, HPE, IBM and Microsoft each offer some kind of cloud carbon emissions calculator tool. 

  • Confidence in sustainability reporting is low, a recent IBM survey found. 

  • Cross-cloud calculations still appear to be missing from the market, creating a potential slowdown in uptake.

IBM became the latest tech giant to cash in on the sustainability craze, announcing general availability of a new IBM Cloud Carbon Calculator tool. Its offering joins similar products from the likes of Amazon Web Services (AWS), Microsoft, Google Cloud and HPE. But as IBM itself has noted, confidence in corporate sustainability reporting has plummeted. So, we can’t be blamed for asking – are carbon calculators and the hype surrounding them a load of hot air? 

Most of the tools appear to leverage reporting standards set by the Greenhouse Gas Protocol, a group which provides tools and guidance to help enterprises and government entities track emissions. But Silverliners need to know what they are calculating and how. 

Here’s how carbon calculators work 

An AWS spokesperson told Silverlinings that to calculate a customer’s carbon footprint, it’s tool “utilizes AWS's Scope 1 and Scope 2 carbon emissions, allocated according to customers' AWS service usage metrics.” Scope 2 specifically includes inputs such as AWS service energy consumption, grid carbon intensity and Amazon’s renewable energy generation, the spokesperson added. 

To estimate emissions savings, the tool factors in Amazon’s renewable energy procurement (a.k.a., the wind and solar power it buys) as well as calculations from 451 Research reports.  

Briana Frank, VP of Product and Design for Cross Portfolio at IBM Cloud, told Silverlinings by email its new tool works in a similar way.  

“We track electricity consumption at the physical and virtual machine level to determine energy consumption for all our cloud services,” she explained. “Using advanced algorithms, we use billing information to allocate the energy for a given service, to specific account(s) in proportion to how much of the service that account has consumed in a specific time-period and for a given location.” She added it also factors in power usage effectiveness and carbon intensity by location. 

“Customers consume different Google Cloud product SKUs and are billed based on SKUs,” a Google Cloud spokesperson explained by email. “So, it can allocate the emissions to a customer based on the customer's consumption of the product SKUs.” 

Microsoft also covers Scope 1 and 2, but recently added new calculation methodologies for Scope 3 emissions, a representative said.  

Building trust 

Frank noted “In today’s world, sustainable computing is no longer a ‘nice to have’ but rather a ‘must-have’ for enterprise customers.” Tools like IBM’s new carbon calculator are designed to help enterprises visualize their greenhouse gas data in a few clicks to “identify emissions hotspots,” but ultimately, it’s up to them “to act on the data,” she said. 

But how can organizations be sure that these calculations are honest and accurate?

AWS said its overall carbon footprint data is “assured annually by a third-party auditor,” who looks at “whether AWS has included all applicable sources of energy consumption, and that AWS has correctly applied the proper methodological hierarchy to determine the carbon emission factors when calculating carbon emissions.” 

One big problem 

There is, however, one big problem: though enterprises today are increasingly operating in a multi-cloud environment, the carbon calculators each appear specific to the cloud provider offering them. For instance, both IBM and Amazon said their calculators only covered emissions generated by their respective clouds and services. That means that organizations must pull and compile their emissions data from multiple sources instead of relying on a single source of truth.  

Hot air or not?

Dell'Oro Group Research Director Lucas Beran told Silverlinings he believes today's carbon calculator tools are "early iterations, but directionally correct. Over time, the quality of inputs will improve which will increase the quality of the outputs, particularly as the data center industry embarks on measuring Scope 3 emissions.

"I do believe there is some level of 'hot air' associated with these tools," Beran noted. This is because when hyperscalers report their own emissions, they tend to use carbon offsets (like renewable energy credits and power purchase agreements) to artificially lower their Scope 2 numbers.

He explained that this kind of accounting doesn't reflect the reality that the grid a data center draws power from isn't always the same one where the renewable energy has been purchased.

"This is something that is currently being investigated by GHG Protocol with potential changes in the future, to right size the benefit of such offsets," Beran said.

AvidThink's Roy Chua had a similar take, noting today's tools vary in scope, accuracy and granularity. Some early calculations were based on "aggregates and averages, versus per location, or per data center — which matters because sources of energy in each location come with different environmental impact." 

Regardless, he said such tools are increasingly needed to comply with enterprise reporting requirements and "it's just a matter of pushing the cloud providers to improve the accuracy, ease-of-use and timeliness of reporting over time," he concluded.

"These tools definitely do help and are needed, especially since cloud services are an increasing part of any enterprise IT [environment]," he concluded.

Read more about cloud and sustainability in our sustainability channel here.