- Data centers and their energy needs cause pollution
- This pollution causes great costs to the health system and the environment
- A cost of as much as $25 billion is theorized, but it could be higher
The sharp rise in artificial intelligence and its demand for data centers could cost the US economy $25 billion in environmental damage and cause serious health complications for those who live near data centers.
These numbers 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 surveyed about 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 US citizens and its cost to the economy.
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Lung disease, heart disease, premature mortality
In the 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 attributes a figure of $3.7 billion), but also the broader, indirect costs of the pollutants caused by generating the energy needed to run data centers.
Muller’s paper theorizes that the planned expansion of data center construction could increase associated damage by up to 85% in the short term.
These costs include the added burden on health facilities and daily medical demands of local residents, which Muller attributes to the negative effects of exposure to the airborne pollutant PM2.5, which can cause lung disease, heart disease and higher rates of premature mortality.
There are also broader social costs associated with pollutants and greenhouse gases that have not yet materialized but are nonetheless derived from the additional energy sources being built or revived to fuel the boom in energy demand.
The Trump administration’s anti-renewable energy stance means legislation has been put forward to revive a number of previously defunct fossil fuel power plants to meet the extra demand, and in turn release more pollutants and greenhouse gases.
These external costs are not borne by the tech companies financing the construction of data centers, who instead enjoy significant tax breaks for their investments in new construction projects, leading to less tax revenue to finance the construction of the additional infrastructure needed to run and transmit electricity to power data centers.
The Trump administration introduced the Ratepayer Protection Pledge to tie the extra costs of energy production to technology companies, but the pledge is entirely voluntary and has little in the way of accountability, timelines or regulations. Some communities in the United States are now experiencing skyrocketing energy costs due to the energy demands of data centers.
There are also problems with the employment provided by data centers. While the initial construction may provide a boost in jobs, the effect is largely temporary. Many data centers are automated and require little monitoring to operate.
Muller’s paper calculates that the economic costs of environmental damage and health-related costs are small compared to the potential productivity gains produced by AI, but residents who live near data centers may disagree with this assessment.
There is now a growing anti-data center sentiment across the United States, with several grassroots, local resident groups opposing the construction of data centers, leading to major project delays and cancellations. There also appears to be a general downward trend following AI, with up to 71% of US citizens believing that AI could cause permanent job losses and nearly half (47%) believing it will have a negative effect on humanity.
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