A text transcription follows.
This transcript is for anyone with a hearing impairment or who for any other reason cannot listen to the MP3 audio file.
The following is the text spoken by OUT-LAW journalist Matthew Magee.
Hello and welcome to OUT-LAW Radio, where we hope to keep you up to date with the latest news and the most fascinating features from the world of technology law.
My name is Matthew Magee, and this week we look at the UK's innovative carbon trading scheme and ask whether, despite its good intentions, it could do fatal damage to Britain's data centre industry.
But first, here are some of the top stories from OUT-LAW.COM, where you can read breaking technology law news throughout the week.
Commission mulls general data breach law
and
Government commits to court oversight of file sharing net disconnections.
The European Commission will consider passing new laws forcing organisations that lose personal data to go public with that loss. The commission has until now been opposed to the creation of wide ranging data breach notification requirements.
The Commission and European Council insisted that a data breach notification in a recent telecoms package of reforms only apply to telecoms companies, but the Commission has now said that it will investigate the passing of new EU wide legislation forcing all kinds of organisations to notify any data breaches to the relevant authorities and the people affected.
The UK's privacy regulator the Information Commissioner's Office (ICO) has never fully backed data breach notifications. They have become law in many US states in recent years.
Supporters of such schemes say that the fear of public recriminations for data loss will improve companies' performances, while opponents fear that if every breach is revealed the public will become desensitized to the issue of data loss.
UK internet users will not be disconnected from the internet for illegal file sharing without a Court's involvement, a government minister has pledged. Culture minister Ben Bradshaw has told MPs there would be a "strict" process involving the Courts.
The government belatedly added the possibility of disconnection into a pre existing consultation on the Digital Britain report on how the UK should deal with emerging technologies.
The report had not backed the disconnection of the internet access used by people suspected of illegal file sharing but the government later extended the consultation process and asked for views on exactly that.
Bradshaw reassured MPs that no disconnections will happen without the involvement of a Court.
‘It wouldn't just happen on the basis of an accusation’ he told the House of Commons Culture, Media and Sport Committee last week. Firstly there would need to be a Court order for any of the technical measures.
‘The suspension would be as a very last resort for serial and serious infringement; it would be subject to a strict two-stage process,’ he said.
Those are some of the top stories from this week's OUT-LAW News.
The internet has long been totally reliant on massive data centres. But now that cloud computing is all the rage for businesses, the entire infrastructure of business is dependent on the smooth operation of industrial caverns full of whirring, blinking servers.
But one trend is colliding with another. As we increasingly process more and more data in these power hungry warehouses, governments are trying to reduce the amount of energy businesses use.
The UK government is doing more than most. Its programme of carbon reduction commitments, or CRCs, will oblige businesses that use a lot of power to use less of it every year, starting in 2013. It is part of the first programme of legally binding carbon reduction measures put into law anywhere.
But what does this admirable forward thinking mean for data centres? Will they flee abroad to avoid the energy squeeze? Perhaps, but not necessarily, says one industry expert.
But first, an expert in the law surrounding the scheme explains how it works. Helen Peters is from Pinsent Masons, the law firm behind OUT-LAW.
Helen Peters: In 2008 the Government introduced the Climate Change Act. So what that Act says is that the UK is going to reduce its greenhouse gas emissions by 26% by 2020 and then by a total of 80% by 2050 and that is compared to our 1990 levels. From 2011 organisations are going to be required to participate and that participation is going to be judged on their 2008 energy use and that is going to require them to asses their energy. Their electricity use be converted into carbon units and they will have to buy each year from 2011 onwards carbon allocations and sell them the following year and then in a phased process each participating organisation is going to have its carbon emissions capped and gradually reduced over time.
The whole scheme, she says, is designed to change the behaviour of energy intensive companies.
Helen Peters: So the big energy users that are not already regulated as far as their energy use is concerned. It is getting them to understand their energy use and then gradually over a period of time starting in 2013 reduce their energy use through implementing energy efficiency measures.
The short term impact will be that companies will have to pay out for the right to produce carbon emissions. They will get some of that money back, or even more than they paid in, depending on their performance. Data centres use so much power to operate the computers and to keep them cool that they definitely count as high energy users, said Peters.
Helen Peters: By their very nature they have to be I mean there is nothing that you can, you cannot walk from that. That is, you know running those types of organisations are going to involve a lot of energy. There is a gap between the period in which they have to buy their carbon allowances and then when the recycling payment comes back in, so to them, so there is going to be a financing aspect to this because the recycling payment that comes back is going to be adjusted according to the energy efficiency and the performance of that company against others on the performance league tables that the Government will create. So if it is a very energy efficient business in comparison then it is going to have a reward back and make money from the recycling payment so, it is you know it is going to have a benefit. Whereas if it is an energy inefficient business comparatively then it is going to have a financial loss.
If businesses were run by honest, altruistic boy scouts then all would be well, but says Liam Newcombe of the British Computer Society's Data Centre Specialist Group, this isn't the case. Companies will try to play the system, and the system, he says, is eminently playable. For a start, it allows companies very easily to farm out all their carbon emitting activity so that not a stain blots their copy book.
Liam Newcombe: There are some problems with CRC in its conception. It only covers your physical owned asset emissions. The problem with this is that very few industries or businesses in our 21st century world physically own all of their activity. Most of them have some sort of specialist provider who delivers aspects of the business to them which are non core and not a profit centre. So for many operators this includes things like for example office space and ICT provision, particularly data centres. As soon as you put a contract in between you and the carbon it is quite effectively laundered from a league table and public ranking perspective.
In fact, Newcombe says that far from being a disaster sending data centre companies scurrying to the other side of the world, the CRC scheme could provide them with a marketing opportunity.
Liam Newcombe: Whilst there is a financial penalty in terms of having to procure emissions entitlements which have a specified cost which is capped to the EU Emissions Trading Scheme cost, that is not actually a very large part of the up cost off the data centre if you are large scale data centre operator. So, it could actually turn around to the point where an operator who had no brand value concern about where they came in the league table could actually use a low position in the league table as a sales feature and say 'hey, worried about CRC?', let’s say you are a large retailer who has invested millions in your brand and your customers' perception of you and your sustainability is a key part of that, do you want to try and fix your data centre and understand what you might be able to do with it or would you rather just give it to us instead and we will just make the carbon disappear from your brand value and league table perspective.
There will though be some offshoring to places where carbon is not so scrupulously counted, said Newcombe. And the trouble with some of those countries, he said, is that systems are not as efficient and more carbon is emitted there than here for every megawatt of power produced.
Peters, though, says that while there could be some data centre flight out of the country, other nations and trading blocks will probably soon adopt measures just like Britain’s.
Helen Peters: The emissions trading system that we now have across Europe that was a scheme that was introduced by the UK unilaterally which then a few years later the European Commission introduced legislation and introduced it Europe wide. So, the fact that we have just here in the UK a carbon reduction commitment that is going to start next year does not mean to say that in one, two, three years times is not going to be across Europe or it does not mean to say that the other jurisdictions are not going to follow suit. I would have thought that you are going to see similar pieces of legislation coming in in the next decade as well.
Newcombe, though, says that the whole system takes not nearly enough account of the complexities of business, trading and computing. In its British league table simplicity it misses some vital opportunities to really save on carbon emissions, he says.
Liam Newcombe: If we look at the various observations we have had from the World Wide Fund for Nature, Smart 2020, and any number of European worldwide reports they suggest that while ICT is somewhere around the 2% plus mark, the reduction of carbon available through use of ICT is in the 15% to 20% range. So, really we may actually make the choice that we want to slightly increase total ICT carbon because we are gong to take such a big bite out of other carbon and if we disaggregate ICT from the impact of ICT and we disconnect the consumer of the service from the impact of the service, I do not believe we are going to see the sorts of changes that this legislation looks for. An economist would refer to this as an inefficient market. Unfortunately the market transformation attempt, we think, may actually make the market substantially less efficient, rather than more efficient.
That's all we have time for this week, thanks for listening. Why not get in touch with OUT-LAW Radio? Do you know of a technology law story? We would love to hear from you on radio@out-law.com. Make sure you tune in next week but, for now, goodbye.