In Mission Critical magazine, Christian Belady writes on the topic of efficiency improvements in the data center and the economic effects.

In economics, the scarcity of resources drives the cost of those resources, which results in more efficient use of those resources. When gasoline prices go up, consumers demand more efficient vehicles to offset those increasing costs. Conversely when fuel prices go down, the demand would go up substantially. This latter notion is called Jevons’ Paradox.
Similarly, the well-known phenomenon called Moore’s law has substantially reduced the cost of computation year over year, driving demand up. This cost reduction is completely driven by efficiency improvements in electronics over the past half-century, improvements unmatched by any other industry. This is the most important reason for the significant demand for increases in the number of servers in the data center and more importantly the increase in server power footprint worldwide. So the real question is how would the further efficiency improvements suggested by the Environmental Protection Agency (EPA) in its 2007 report to Congress affect these trends?

And in typical Christian fashion, brings up interesting issues as to the effects of energy efficiency.

Conclusion
While driving efficiency is clearly the right thing to do, industry and government agencies must consider a more holistic view on the cause and effect in the IT industry. It is important to understand what the drivers are to the perceived problem of IT power consumption. To date, this “problem” has been tackled as a technical problem and organizations such as the EPA, Green Grid, Climate Savers are doing the right thing to solve the technical problem.
There is no doubt that there are inefficiencies in the data center and in IT equipment, but perhaps it is exactly these inefficiencies that have curbed what the power growth could have been. In addition, it may be that IT is displacing other high-carbon emission industries. Drawing economists into the discussion alongside technologists could lead to a broad discussion of the larger issues and holistic solutions. The hope is that economists will be just as passionately involved in solving this problem as the technologist over the past couple of years.