Starting a few years ago, the environmental activist organization Greenpeace began tracking how the internet and the largest tech companies contribute towards the environment. One fact that does emerge from the report is that companies with large data centers have much better environmental scores than others. According to Rack Alley here are some of the reasons why data centers are better for the environment than running your own server room:

Volume

At a data center, your Los Angeles web hosting instance runs alongside several thousand other servers and applications. It is this kind of volume that allows the data center to negotiate for better rates and better environmental policies from the local utilities. Also, the volume makes adding in-house energy generation like solar more practical.

Renewable procurement

One way that larger data centers offset their effect on the environment is to purchase renewable energy locally or elsewhere. When you purchase locally, you offset your use immediately. However, when there are no local options, purchasing energy elsewhere can still offset your carbon load. Buying power elsewhere to offset local generation also affords better pricing, as long as the utilities support cross-boundary energy purchases.

Energy efficiency

Another advantage of the volume that data centers possess is the ability to use that to increase efficiency beyond what we can manage with an in-house server room. With that kind of volume, everything from air conditioning to power management runs at a scale that allows a higher level of efficiency.