- Data centers and their energy needs pollute
- This pollution results in significant costs for health care and the environment.
- A cost of up to $25 billion is theorized, but it could be higher.
The rise of AI and its demand for data centers could cost the U.S. economy $25 billion in environmental damage and lead to serious health complications for people living near data centers.
These figures come from a new working paper written by Nicholas Z. Muller, an economist at Carnegie Mellon University, and published by the National Bureau of Economic Research.
The paper examined approximately 2,800 operational data centers on their energy needs and examined the impact of additional generated air pollutants and greenhouse gases on the environment, the health of U.S. citizens, and their cost to the economy.
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Lung disease, heart disease, premature mortality
In his paper, Muller calculates the $25 billion gross external damage (GED) figure by calculating not only the use of artificial intelligence in data centers (to which he assigns a figure of $3.7 billion), but also the broader indirect costs of pollutants caused by producing the energy needed to power the data centers.
Muller’s article argues that the planned expansion of data center construction could increase associated damages by up to 85% in the short term.
These costs include the additional burden on healthcare facilities and the daily medical demands of local residents, which Muller attributes to the negative effects of exposure to the air pollutant PM2.5, which can cause lung disease, heart problems and higher rates of premature mortality.
There are also larger social costs associated with pollutants and greenhouse gases that have not yet materialized, but are nonetheless generated by the additional energy sources built or restored to fuel the boom in energy demand.
The Trump administration’s stance against renewable energy sources means legislation has been proposed to revive a number of previously decommissioned fossil fuel power plants to meet additional demand, and thus release more pollutants and greenhouse gases.
These external costs are not borne by the technology companies that finance the construction of data centers, but receive significant tax breaks for their investments in new construction projects, resulting in less tax revenue to finance the construction of the additional infrastructure needed to power and transfer electricity to power the data centers.
The Trump administration did introduce the Ratepayer Protection Pledge to tie additional energy production costs to technology companies, but this pledge is entirely voluntary and has very few responsibilities, deadlines, or provisions. Some communities in the United States are now facing skyrocketing energy costs due to the energy demands of data centers.
There are also issues related to employment provided by data centers. Although initial construction may generate an increase in employment, the effect is largely temporary. Many data centers are automated and require little supervision to operate.
Muller’s article estimates that the economic costs of environmental damage and health care costs are small compared to the potential productivity gains produced by AI, but residents living near data centers may disagree with this assessment.
There is now growing anti-data center sentiment in the United States, with many local resident groups opposing the construction of data centers, leading to delays and cancellations of major projects. There also appears to be a general downward trend in opinion on AI, with up to 71% of US citizens believing that AI could lead to permanent job loss, and almost half (47%) believing it will have a negative effect on humanity.
Via Fortune
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