Cloud data centers consume a large amount of energy that leads to a high carbon footprint. Taking into account a carbon tax imposed on the emitted carbon makes energy and carbon cost play a major role in data centers' operational costs. To address this challenge, we investigate parameters that have the biggest effect on energy and carbon footprint cost to propose more efficient VM placement approaches. We formulate the total energy cost as a function of the energy consumed by servers plus overhead energy, which is computed through power usage effectiveness (PUE) metric as a function of IT load and outside temperature. Furthermore, we consider that data center sites have access to renewable energy sources. This helps to reduce their reliance on “brown” electricity delivered by off-site providers, which is typically drawn from polluting sources. We then propose multiple VM placement approaches to evaluate their performance and identify the parameters with the greatest impact on the total renewable and brown energy consumption, carbon footprint, and cost. The results show that the approach which considers dynamic PUE, renewable energy sources, and changes in the total energy consumption outperforms the others while still meeting cloud users' service level agreements.