How Google can save the planet

[As many of you who have been following my Green Broadband Blog I have long argued that there are 2 approaches on how the Internet can help reduce global warming. The first and most obvious is reducing the direct energy consumption of the Internet and ICT (information, communications, technology) industry itself. There is a lot of good work in this area with more energy efficient computers, green grids, zero carbon data centers and so forth. Google and other companies like IBM are exemplary corporate citizens in this regard. But even if the entire Internet industry reduced its carbon footprint to zero, the impact would be fairly negligible on the overall global CO2 output.

The second and more important benefit of how companies like Google, Yahoo, Microsoft Amazon, eBay, etc can have a significant impact on CO2 emissions is through trading "bits and bandwidth for carbon". This is not "pie in the sky" thinking but a common marketing tool that already exists with resale gas and electric companies. But surprisingly the concept has not been taken up or implemented by the Internet industry.

Many gas and electric resale companies have a number of product offerings where customers can get free hot water tanks, furnaces, appliances and other services if they sign up for long term contracts with a fixed price for their rate of energy consumption. Direct Energy for example offers 300 free minutes of long distance per month for those customers who sign up for a 5 year contract of a fixed guaranteed utilization price for gas and/or electricity. With a fixed price per utilization (e.g. 10 cents per kilowatt/hour) customers are free to reduce their overall energy consumption and yet still enjoy the benefits of the free service or product. As far as I know none of the electric gas resale companies have positioned these offerings as a way for consumers to reduce CO2 emissions.

Companies like Google, Yahoo, Microsoft and others have been focusing on the advertising market as their main source of Internet revenue through "click-ad" and products like Ad-Sense etc. While the innovations in this market have been spectacular, they do have limited total revenue potential. The entire advertising market - radio, TV, Internet - is very small part of the overall economy. Even with 100% capture of this market it will not enable the next billion dollars of revenues for companies like Google, Microsoft, Yahoo, eBay, Amazon, etc

But imagine if you could combine the power of click ads and on-line purchases with electric and gas re-sale products and services. Imagine a real time Internet service where customers could buy all sorts of products and services over the network where the cost of the product and/or service is included as part of their overall electric/gas utilization rate (but NOT consumption).

For example a customer could click on an iTunes song and rather than being billed on their credit card, the charge instead would be applied to their electric utilization rate increasing it for example from 10 cents per kilowatt/hour to 10.1 cents per kilowatt/hour for the next 5 days, or something to that effect.

Customers would be encouraged to reduce their energy consumption during that period, so that the net cost of such a purchase could very well end up being zero. The purveyors of the products and services, and the electric/gas resellers can protect and guarantee their profits from the sale of the product or service through forward purchases of energy or averaging out the base utilization rate.

The same marketing concept can be applied to automobiles as well where customers with leases or service plans agree to pay a "utilization" fee based on their mileage they put on the vehicle. Products and services such as music, cell phone charge, congestion charges, etc could be charged to this utilization fee. Again the less the consumer drives the car, the more they benefit in terms of effective zero next cost for the product and/or service.

In many ways trading of "Bits and bandwidth for carbon" is in effect a carbon tax. But rather than governments applying such a tax where there are no direct benefits to the consumer, this mechanism will have the same effect of encouraging consumers to reduce their carbon footprint, but where they are directly rewarded for this behaviour.

Internet companies like Google, Yahoo, Microsoft, eBay, Amazon would have a new marketing tool and a potential source of significant new revenue. At the same time they can be leaders in addressing the biggest environmental challenge facing this planet.

Virtually anyone can become an electric/gas reseller. It is important to note that you DON'T have to be a utility to be an electric/gas reseller. The licensing costs imposed by most states and provinces are less than $2000.00. Throughout North America and the rest of the world there are wholesale energy markets where licensed resellers can purchase energy for resale to consumers and businesses. Most utilities are obligated by law to do the billing and customer collection on behalf of any licensed reseller and then remit monthly the energy charges to the reseller directly. This means that any small innovative Internet companies who want to institute "bits and bandwidth for carbon" marketing schemes can easily become energy resellers and get into the market without huge costs of billing and collection.

For more details see http://green-broadband.blogspot.com