The economic cost of environmental harm from data centers may reach as high as $25 billion, according to a new report by Nicholas Z. Muller from Carnegie Mellon University, published by the National Bureau of Economic Research. The report emphasizes that energy demands from data centers are leading to increased pollution, which incurs significant healthcare and environmental expenses.
Muller’s analysis examined approximately 2,800 operational data centers, assessing their energy needs and the associated pollutants, including greenhouse gases. The study attributes $3.7 billion of the total environmental damage directly to artificial intelligence usage within these facilities.
The report warns that planned expansions of data centers could raise associated environmental damages by up to 85% in the near term. This increase could further strain healthcare facilities and exacerbate medical issues in local populations, including lung disease, heart conditions, and increased premature mortality linked to airborne pollutants like PM2.5.
Compounding the situation, the Trump administration has revived several fossil fuel power plants to meet the energy demands of data centers, resulting in higher emissions of pollutants and greenhouse gases. While tech companies benefit from significant tax breaks for data center investments, these external environmental costs are not accounted for in their financial burdens.
The Trump administration’s Ratepayer Protection Pledge intended to link energy production costs to tech companies; however, it is voluntary and lacks enforceable provisions. Communities near data centers report skyrocketing energy costs due to their operational demands.
Data centers may generate temporary construction jobs, yet many positions are automated, offering limited long-term employment opportunities. Although the report suggests that environmental and healthcare costs may be minor compared to potential productivity gains from AI, community residents often disagree with this perspective.
Public sentiment regarding data centers is shifting, as grassroots movements against their construction are gaining traction, resulting in project delays and cancellations. Additionally, a growing concern over AI’s impact exists, with 71% of Americans fearing it may cause permanent job losses and 47% believing it will negatively affect humanity.
“The planned expansion of data centers poses significant risks not only to the environment but also to public health,” Muller stated regarding his findings.
