Journal of the Association for Information Systems (2025) AI Processed Human Approved
An Empirical Investigation of Cloud Computing and Environmental Performance of Nations:Implications for Shared Responsibility in Cloud Computing
This study examines how cloud computing affects the energy and carbon intensities of nations by analyzing cross-border environmental impacts. Using a country-level panel dataset of 51 countries from 1995 to 2016 combined with geographic proximity measures to global public cloud regions, the paper disentangles the dual impacts of cloud infrastructure and cloud-based IT services.
Problem
Cloud computing separates digital service users from carbon emission sources, obscuring ecological responsibility across national borders. Host countries bearing data center infrastructure face increased environmental burdens, whereas neighboring user countries reap the efficiency benefits of cloud services without accounting for offshore emissions.
Outcome
- Access to cloud services generally enhances environmental efficiency by reducing national energy and carbon intensities associated with IT services.
- Countries hosting cloud data centers experience higher local energy and carbon intensities due to heavy physical infrastructure demands.
- Neighboring countries benefit from green cloud IT services without incurring adverse environmental costs on their local IT capital.
- A shared responsibility model based on multilayered technology architecture is proposed to divide environmental accountability between cloud providers and users.
- Countries hosting cloud data centers experience higher local energy and carbon intensities due to heavy physical infrastructure demands.
- Neighboring countries benefit from green cloud IT services without incurring adverse environmental costs on their local IT capital.
- A shared responsibility model based on multilayered technology architecture is proposed to divide environmental accountability between cloud providers and users.
What it means for you
- CIO / IT Executive: On Monday morning, initiate a review of our current cloud infrastructure's geographical distribution and identify which of our cloud services are hosted in countries that are net importers of cloud services (i.e., benefiting from efficiency gains) versus countries that are net hosts of data centers. Then, begin drafting an internal memo to your team outlining the need to assess the environmental footprint of our chosen cloud providers, specifically focusing on the geographical location of their data centers.
- IT Manager: On Monday morning, compile a list of all cloud services currently utilized by your department and identify the primary cloud provider(s) for each. Then, locate and review the public documentation of these providers regarding their data center locations and any publicly available environmental sustainability reports or initiatives.
- Business Strategist: On Monday morning, begin by identifying which key business processes or customer-facing services are heavily reliant on cloud computing. Then, investigate if these services are currently being delivered from cloud infrastructure located in countries that are significant importers of cloud services or from countries that are major hosts of data centers, and flag this for further cost-benefit analysis that includes potential environmental externalities.
- Researcher: On Monday morning, start by drafting an email to your colleagues or supervisor proposing a follow-up study that quantifies the specific cross-border environmental impacts for a subset of countries using the methodologies outlined in this paper. Include a brief outline of the data you would need to gather, such as national IT service import/export data and detailed data center location information for key cloud providers.
- Policymaker: On Monday morning, draft a preliminary policy brief for your relevant committee or ministry that summarizes the key findings of this research regarding the uneven distribution of environmental burdens from cloud computing. Specifically, highlight the need for international dialogue on shared responsibility and propose an initial step to investigate incorporating environmental footprint data into public procurement policies for cloud services.
Transcript
Host: Welcome to A.I.S. Insights — powered by Living Knowledge. I'm Anna Ivy Summers, and today we're exploring a critical question for the modern digital economy: how green is the cloud, really? We're diving into a landmark study titled "An Empirical Investigation of Cloud Computing and Environmental Performance of Nations: Implications for Shared Responsibility in Cloud Computing." Joining me to unpack this research is our expert, Alex Ian Sutherland. Welcome, Alex!
Expert: Thanks, Anna. It’s great to be here. This study tackles something many business leaders take for granted—the idea that moving to the cloud automatically makes your operations environmentally sustainable.
Host: Exactly. We hear so much about cloud migration reducing a company's carbon footprint. But the study points out a major catch. What is this core issue?
Expert: Well, the fundamental problem is that cloud computing separates digital service users from the physical sources of carbon emissions. When a firm migrates to the cloud, it shuts down its local servers, which lowers its local energy use. But those workloads just move to massive data centers somewhere else. These hyperscale data centers consume huge amounts of electricity for power and cooling, generating significant emissions in the countries where they're physically located. So while user countries look greener, the hosting countries bear the environmental burden.
Host: That’s a fascinating geographic disconnect. How did the researchers behind this study measure these cross-border effects?
Expert: They built a comprehensive country-level dataset covering 51 nations from 1995 to 2016. To capture access to cloud technology, they measured each country's geographic proximity to data center regions operated by the top public cloud providers—Amazon Web Services, Microsoft Azure, Google Cloud, and Alibaba Cloud. Then, they cleverly separated physical IT capital stock, like server hardware, from ongoing IT service expenditures. This allowed them to isolate the direct pollution from physical cloud infrastructure versus the efficiency gains from using cloud services.
Host: So what did the data actually reveal when they compared hosting countries to neighboring countries?
Expert: The findings clearly confirm the dual nature of cloud computing. Overall, access to cloud services helps nations improve energy and carbon efficiency by optimizing business operations. However, in countries hosting cloud regions, those environmental benefits come at a real cost: significantly increased energy and carbon intensity from the local IT capital powering those data centers. Meanwhile, neighboring countries get to enjoy the green efficiency of cloud software without taking any hit to their own national environmental metrics. They're essentially exporting their digital carbon footprint.
Host: That raises serious questions about digital responsibility and corporate accountability. How can business leaders and policymakers address this imbalance?
Expert: This is where the study makes a groundbreaking proposal: a Shared Responsibility Model for cloud sustainability. In cloud security, responsibility is already split between vendor and customer based on the service model—whether it's Infrastructure, Platform, or Software as a Service. The study argues we need the exact same framework for environmental impacts.
Host: So cloud providers shouldn't carry all the blame, and cloud users can't just claim zero emissions?
Expert: Boardroom leaders need to realize that. Under this model, providers are accountable for the foundational layers—like data center hardware efficiency and clean energy sourcing. But service users are responsible for how efficiently they write and deploy their applications and which cloud regions they select. Regulations like the European Union's Corporate Sustainability Reporting Directive are already pushing companies to report indirect Scope 3 emissions. A shared responsibility framework gives organizations a structured way to actually measure and manage those cross-border digital impacts across the value chain.
Host: It really highlights that sustainability isn't just about moving to the cloud—it's about how thoughtfully we design, select, and manage our cloud footprint.
Expert: Absolutely, Anna. Responsible cloud computing requires both providers and enterprise users to actively share the burden of greening our global digital infrastructure.
Host: That’s a powerful takeaway for any business steering its digital transformation strategy. Thank you so much for breaking down this study today, Alex.
Expert: My pleasure, Anna.
Host: And thank you to our listeners for tuning into A.I.S. Insights — powered by Living Knowledge. Join us next time as we unpack the latest research shaping business and technology!
Expert: Thanks, Anna. It’s great to be here. This study tackles something many business leaders take for granted—the idea that moving to the cloud automatically makes your operations environmentally sustainable.
Host: Exactly. We hear so much about cloud migration reducing a company's carbon footprint. But the study points out a major catch. What is this core issue?
Expert: Well, the fundamental problem is that cloud computing separates digital service users from the physical sources of carbon emissions. When a firm migrates to the cloud, it shuts down its local servers, which lowers its local energy use. But those workloads just move to massive data centers somewhere else. These hyperscale data centers consume huge amounts of electricity for power and cooling, generating significant emissions in the countries where they're physically located. So while user countries look greener, the hosting countries bear the environmental burden.
Host: That’s a fascinating geographic disconnect. How did the researchers behind this study measure these cross-border effects?
Expert: They built a comprehensive country-level dataset covering 51 nations from 1995 to 2016. To capture access to cloud technology, they measured each country's geographic proximity to data center regions operated by the top public cloud providers—Amazon Web Services, Microsoft Azure, Google Cloud, and Alibaba Cloud. Then, they cleverly separated physical IT capital stock, like server hardware, from ongoing IT service expenditures. This allowed them to isolate the direct pollution from physical cloud infrastructure versus the efficiency gains from using cloud services.
Host: So what did the data actually reveal when they compared hosting countries to neighboring countries?
Expert: The findings clearly confirm the dual nature of cloud computing. Overall, access to cloud services helps nations improve energy and carbon efficiency by optimizing business operations. However, in countries hosting cloud regions, those environmental benefits come at a real cost: significantly increased energy and carbon intensity from the local IT capital powering those data centers. Meanwhile, neighboring countries get to enjoy the green efficiency of cloud software without taking any hit to their own national environmental metrics. They're essentially exporting their digital carbon footprint.
Host: That raises serious questions about digital responsibility and corporate accountability. How can business leaders and policymakers address this imbalance?
Expert: This is where the study makes a groundbreaking proposal: a Shared Responsibility Model for cloud sustainability. In cloud security, responsibility is already split between vendor and customer based on the service model—whether it's Infrastructure, Platform, or Software as a Service. The study argues we need the exact same framework for environmental impacts.
Host: So cloud providers shouldn't carry all the blame, and cloud users can't just claim zero emissions?
Expert: Boardroom leaders need to realize that. Under this model, providers are accountable for the foundational layers—like data center hardware efficiency and clean energy sourcing. But service users are responsible for how efficiently they write and deploy their applications and which cloud regions they select. Regulations like the European Union's Corporate Sustainability Reporting Directive are already pushing companies to report indirect Scope 3 emissions. A shared responsibility framework gives organizations a structured way to actually measure and manage those cross-border digital impacts across the value chain.
Host: It really highlights that sustainability isn't just about moving to the cloud—it's about how thoughtfully we design, select, and manage our cloud footprint.
Expert: Absolutely, Anna. Responsible cloud computing requires both providers and enterprise users to actively share the burden of greening our global digital infrastructure.
Host: That’s a powerful takeaway for any business steering its digital transformation strategy. Thank you so much for breaking down this study today, Alex.
Expert: My pleasure, Anna.
Host: And thank you to our listeners for tuning into A.I.S. Insights — powered by Living Knowledge. Join us next time as we unpack the latest research shaping business and technology!