Cloud Computing’s Hidden Carbon Cost

Shriyan Tan on September 6, 2025

Introduction

Cloud computing feels invisible. We click, stream, code, and deploy with ease, thinking it’s all just floating “somewhere up there.” But behind every search query, Netflix binge, or AI model is a data center chugging electricity and pumping out carbon emissions. The tech world rarely admits it, but cloud computing comes with a carbon cost.

This blog dives into the environmental footprint of cloud computing. We’ll break down what’s really happening behind your virtual workloads, why it matters more than ever, and what companies can do about it.

How Cloud Computing Generates Carbon Emissions

1. Data Centers Aren’t Weightless

Every cloud service depends on physical infrastructure, data centers filled with servers, cooling units, and backup power systems. These centers consume massive electricity 24/7. A single hyperscale data center can use as much power as a small town.

2. Electricity Mix Determines Carbon Output

Where the data center is located, and how that grid generates power, makes or breaks its sustainability score. A server farm in Norway might run on hydro. One in Virginia? Mostly fossil fuels.

3. The AI Boom Is Making It Worse

AI models like GPT, LLMs, and image generators don’t just consume data, they inhale electricity. Training one large model can emit as much CO₂ as five cars over their entire lifetimes. And inference (running the model repeatedly) adds to the footprint.

4. Always-On Services Waste Energy

Cloud computing supports services that are always on, regardless of actual use. That includes idle SaaS dashboards, backup servers, and countless microservices spinning in the background.

ALSO READ

The Real Numbers: Cloud’s Hidden Carbon Stats

3% of global electricity use now goes to data centers.
This could hit 8% by 2030 if growth continues unchecked.
Cloud providers consume hundreds of terawatt-hours per year, comparable to entire countries.
A single Google search emits around 0.2g of CO₂. Now multiply that by billions per day.

These aren’t fringe stats. They’re central to the sustainability crisis that Big Tech rarely addresses head-on.

Greenwashing vs Genuine Action in Big Tech

✅ What’s Being Claimed:

“We’re carbon neutral.”
“Our cloud is 100% renewable.”
“We offset all emissions.”

Sounds great, right? But…

❌ What’s Often Hidden:

Offsets don’t reduce emissions, they shift them.
“100% renewable” may include RECs (renewable energy certificates), which don’t guarantee real-time clean power.
Many data centers are powered by grids still dominated by gas or coal.

Until cloud providers tie workloads to real-time clean energy, those claims are more marketing than meaningful.

Case Studies: Who’s Doing What?

🌱 Google Cloud

Uses carbon-intelligent computing to shift workloads to cleaner times/locations.
Reports on real-time carbon usage.
Actively invests in clean energy near its data centers.

⚡ Amazon Web Services (AWS)

Largest cloud provider, but historically vague on transparency.
Promised to be net-zero carbon by 2040.
Still operates many centers on fossil-heavy grids.

☁ Microsoft Azure

Aims to be carbon negative by 2030.
Focused on Scope 3 emissions too (indirect emissions, e.g., user operations).
Publishes detailed sustainability reports, but lacks real-time tracking.

So What Can Be Done? (And What Can You Do?)

For Companies Using the Cloud:

Choose Your Region Wisely
Use cloud regions powered by clean energy (like Oregon or Finland).
Use Serverless and Autoscaling
Pay for what you use. Reduce idle time and overprovisioning.
Monitor Carbon-Aware APIs
Tools like Microsoft’s Emissions Impact Dashboard or Cloud Carbon Footprint can track emissions.
Set a Cloud Sustainability Budget
Just like cost budgeting, track and limit carbon usage per team/project.
Push Vendors for Transparency
If you’re paying for cloud, ask what powers it. Make sustainability part of vendor contracts.

For Developers and Engineers:

Optimize code. Less compute = less power.
Batch jobs during clean energy hours (if supported).
Use low-carbon models and data formats.
Decommission unused resources aggressively.

Why This Matters Now

It’s tempting to think the cloud is someone else’s problem. But here’s the thing: The cloud is us. If you’re deploying apps, running AI, or shipping software, you’re using cloud power. Which means your digital decisions have a physical footprint.

And as digital grows, so does its environmental impact. Ignoring cloud emissions now is like ignoring plastic waste in the 1990s, until it’s too late.

A futuristic data center powered by solar and wind, surrounded by green landscapes – hyper-realistic digital art — A futuristic data center powered by solar and wind.

FAQs

1. How is the cloud different from traditional IT infrastructure in terms of emissions?
Cloud platforms are more efficient at scale, but also concentrate energy use. Depending on the provider and region, emissions can be higher or lower than on-premise systems.

2. What are Scope 3 emissions in cloud computing?
Scope 3 refers to indirect emissions, like how customers use cloud services. They’re often overlooked but make up a significant portion of carbon impact.

3. Can renewable energy completely cancel out cloud emissions?
Only if it’s matched in real-time, not just annually. Otherwise, fossil fuels still fill the gaps.

Call to Action

Ready to rethink your cloud strategy?
Start factoring sustainability into your cloud decisions. Your app’s performance shouldn’t cost the planet.

A Practical Guide to PCAF Carbon Accounting

carbonsoftware on February 3, 2025

Making Sense of Financed Emissions

Let’s talk about something that’s becoming increasingly important in the financial world: measuring the carbon impact of our investments and loans. If you work in finance, you’ve probably heard of PCAF (Partnership for Carbon Accounting Financials), but maybe you’re wondering what it really means for your organization and how to put it into practice.

What’s PCAF All About?

Think of PCAF as a universal language for measuring carbon emissions in finance. It started with a group of Dutch banks who realized they needed a consistent way to measure their climate impact. What began as a local initiative has now gone global, with financial institutions worldwide adopting this approach.

The beauty of PCAF lies in its practicality. Whether you’re dealing with corporate loans, mortgages, or project financing, PCAF provides clear guidelines on how to measure your carbon footprint. It’s like having a recipe book for carbon accounting – you know exactly what ingredients you need and how to put them together.

Why Should You Care?

Let’s be honest: implementing new systems isn’t anyone’s idea of fun. But here’s why PCAF matters:

First, regulators are getting serious about climate reporting. Having a solid carbon accounting system isn’t just nice to have anymore – it’s becoming a necessity. Plus, investors are asking tougher questions about climate impact. Being able to give clear, standardized answers can set you apart from the competition.

But beyond compliance and competition, there’s a bigger picture. The financial sector has enormous influence over where money flows in the economy. By understanding and measuring carbon impact, we can make better decisions about where to invest and lend, ultimately helping to address climate change.

Getting Started: A Real World Approach

1. Do Your Homework

Before diving in, spend some time getting familiar with PCAF’s guidelines. Their website has excellent resources, and while some parts might seem technical at first, they’re quite practical once you start working with them.

2. Gather Your Data

This is often the trickiest part. You’ll need to collect information about the emissions connected to your investments and loans. Some tips from experience:

Start with what you have. Perfect data doesn’t exist, and PCAF recognizes this.
Work with your clients. Many are already tracking their emissions and are happy to share.
Use industry averages when you need to fill gaps. PCAF provides guidance on this.

3. Crunch the Numbers

The basic principle is pretty straightforward: if you finance 30% of a company, you’re responsible for 30% of its emissions. Of course, real life is more complex, but that’s the general idea.

Modern tools like Persefoni or Watershed can help automate these calculations. They’re not perfect, but they can save you from spreadsheet hell.

Common Headaches (and How to Deal with Them)

The Data Challenge

You’ll almost certainly run into data gaps. Some companies you work with might not track their emissions, or their data might be incomplete. Don’t let perfect be the enemy of good. Start with what you have and improve over time.

System Integration

Your existing systems probably weren’t designed with carbon accounting in mind. Look for ways to integrate PCAF gradually. Many organizations start with a pilot project in one department before rolling it out more widely.

Making It Work Long Term

Success with PCAF isn’t just about the technical implementation. Here’s what really matters:

Get your team on board. Make sure everyone understands why this matters and how it works.
Start simple and improve over time. You don’t need to solve everything at once.
Keep talking to your clients and other stakeholders. Their input and feedback are invaluable.

Looking Ahead

Carbon accounting in finance is still evolving. New technologies like AI and blockchain are making it easier to track and verify emissions data. But the basic principles of PCAF – transparency, consistency, and accountability – will remain important.

Wrapping Up

Starting your PCAF journey might seem daunting, but remember: every financial institution that’s successfully implemented it started from scratch too. Take it step by step, learn from others’ experiences, and keep improving over time.

Got questions? The PCAF community is surprisingly collaborative. Don’t hesitate to reach out to other institutions or PCAF itself for guidance. We’re all figuring this out together.

Quick Q&A

Q: Is PCAF really necessary for smaller institutions?
A: While larger institutions might face more immediate pressure, having a systematic approach to carbon accounting is becoming important for everyone in finance. Starting early gives you time to get it right.

Q: What’s the first practical step we should take?
A: Start by mapping out what data you already have. Understanding your starting point makes it much easier to plan your implementation.

Q: How long does implementation usually take?
A: It varies widely, but most institutions take 6-12 months for their initial implementation. Remember, it’s okay to start small and expand over time.

Remember, implementing PCAF isn’t just about checking a box for compliance. It’s about being part of the solution to one of our biggest global challenges. Take that first step, future you will be glad you did.

Where Do Most of a Software Focused Companies Carbon Emissions Typically Come From?

carbonsoftware on November 29, 2023

Ongoing carbon gas environment emission is expanding with time because of climate crises. In that case, businesses of all kinds and sizes across many sectors play a vital role in driving sustainability. They focus on escalating the climate crises. A basic and critical part of this entire scenario involves the reduction and understanding of greenhouse gas emissions. Nearly 70% of business and software focused companies experience carbon emissions. But where do most of a software-focused company’s carbon emissions come from? So, finding the reason for most of a software-focused company’s carbon emissions is important.

In that regard, we are here to shed light on the world in which many software focused companies experience carbon emissions. Let’s discuss the type of carbon emission and then break it down into actionable and manageable insights to find out their root cause. Without a further ado, take a deep dive into the primary carbon emission categories, which combine and could be a sign of the company’s carbon footprint.

Exploring Internal Carbon Accounting Standards

carbonsoftware on November 10, 2023

Commonly known as greenhouse gas accounting, carbon accounting is a process of quantifying the production of greenhouse gases. It includes direct as well as indirect measurement through business activities. This technique is commonly used by management teams and analysts to determine the carbon emissions of an organization.

Many people think that carbon accounting and GHG accounting are similar, but there is a slight difference. To be precise, carbon accounting is focused on carbon dioxide emissions, but GHG accounting focuses on all greenhouse gases.

Who Is Conducting Carbon Emissions Audits?

carbonsoftware on October 31, 2023

Climate change is one of the most significant challenges facing the world. So, it is vital to understand that reducing carbon emissions has to be a top priority. One essential tool in this struggle is the carbon emissions audit. These reports help businesses determine how much harmful gases, like carbon dioxide (CO2), they produce. These audits help companies see where these gases are coming from, like factories or cars, to figure out ways to make less of them.

Moreover, carbon emissions audits identify areas where a business can become more eco-friendly. It is critical to know because too much pollution is causing global warming, leading to problems like extreme weather, melting ice, and rising sea levels. But who’s in charge of doing these audits? That is what we’ll explore in this article. We will examine the different groups and people who ensure these audits happen.

Category: Audits