Carbon pricing & your IT Infrastructure - What to do now?

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20 July 2011 | Helen Clarke

Customers of Australian data centres should review the terms of their service agreements, and consider the extent to which their service providers may be entitled to pass on additional operational costs such as electricity, by increasing service charges.

Now that the Greens and key independents have confirmed their support for the principal elements of the Carbon Price scheme, it is likely that legislation to implement the scheme will pass through Parliament later this year.

Draft legislation is set to be released for comment by 31 July 2011, and the Carbon Price scheme is scheduled to commence on 1 July 2012.

Customers of Australian data centres should review the terms of their service agreements, and consider the extent to which their service providers may be entitled to pass on additional operational costs such as electricity, by increasing service charges.

Customers should also look at addressing the following issues when negotiating new (or re-negotiating existing) services arrangements with data centre providers:

  • Ensure any “carbon tax” or Carbon Price permit fees cannot be passed on to the Customer (noting that the distinction between the two is important);
  • Secure an overall commitment by the service provider on lowering the carbon footprint of the data centre;
  • Include commitments by the service provider around implementing the latest technology in power management, electricity reductions and data centre cooling;
  • Elevate the sustainability program for discussion in governance forums established under the services agreement; and
  • Provide for specific benchmarking of carbon reductions during the term of the services agreement.

For the reasons outlined above, customers should also remember that moving to an offshore IT infrastructure provider to avoid cost increases in Australia may not be the easy answer – and that they may actually face additional operational costs of understanding and meeting various regulatory and legal compliance requirements in other jurisdictions.



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Helen Clarke

Partner. Brisbane
+61 7 3228 9818

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