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By 2020, large US companies that use cloud computing can achieve annual energy savings of $12.3 billion, and annual carbon reductions equivalent to 200 million barrels of oil -- enough to power 5.7 million cars for one year.

This is according to an AT&T sponsored study by the Carbon Disclosure Project titled "Cloud Computing: The IT Solution for the 21st Century."

The Carbon Disclosure Project (CDP) is an independent not-for-profit organization that claims to hold the largest database of primary corporate climate change information in the world.

Some 3,000 organizations and cities across the world's largest economies now measure and disclose their greenhouse gas emissions and climate change strategies through CDP, in order that they can set reduction targets and make performance improvements.

The study was conducted by independent research firm Verdantix on 2,653 multi-national firms including Aviva, Boeing, Citigroup and Juniper Networks. All study participants had adopted cloud services for at least two years. Many of the firms interviewed reported cost savings as a primary motivator, with anticipated cost reductions as high as 40-50%.

Findings of the study suggest companies are planning to accelerate their cloud adoption from 10% to 69% of their IT spend by 2020.

It finds that cloud adopting-company can reduce its energy consumption, lower its carbon emissions, and reduce its capex on IT resources while improving operational efficiency. 

Verdantix's senior manager Stuart Neumann said, "The study also analyzed the business impacts of transferring an essential business application -- human resources -- to the cloud and shows such an investment could give a payback in under one year."

Paul Stemmler from Citigroup said: "Carbon reduction is one driver, but not the primary driver. The primary driver is time to market. Developers used to take 45 days to get new servers, but in the internal cloud infrastructure that we operate in our own private network, it takes just a couple of minutes.

In addition to a predicted aggregate, annual carbon reduction of 85.7 million metric tons by large US companies, cloud computing can:

"Finding providers and partners that can take some of your energy-using operations to scale, and manage them in a shared capacity, is good for both business' carbon footprint and its bottom line," said Andrew Winston, an expert on sustainable business and author of Green to Gold and Green Recovery. 

Paul Dickinson, executive chairman of CDP, said: "A large percentage of global GDP is reliant on ICT -- this is a critical issue as we strive to decouple economic growth from emissions growth. The carbon emissions-reducing potential of cloud computing is a thrilling breakthrough, allowing companies to maximize performance, drive down costs, reduce inefficiency and minimize energy use -- and therefore carbon emissions -- all at the same time."