AI & Global Warming & Pollution

Investment Analysis Clubs Macro Economic Trends and Risks
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The IEA’s special report Energy and AI, out today, offers the most comprehensive, data-driven global analysis to date on the growing connections between energy and AI. The report draws on new datasets and extensive consultation with policy makers, the tech sector, the energy industry and international experts. It projects that electricity demand from data centres worldwide is set to more than double by 2030 to around 945 terawatt-hours (TWh), slightly more than the entire electricity consumption of Japan today. AI will be the most significant driver of this increase, with electricity demand from AI-optimised data centres projected to more than quadruple by 2030.

In the United States, power consumption by data centres is on course to account for almost half of the growth in electricity demand between now and 2030.

They are creating “heat islands,” warming the land around them by up to 16 degrees Fahrenheit, and making life hotter for more than 340 million people.

They found surface temperatures increased by an average of 3.6 degrees Fahrenheit after a data center started operations. In extreme cases, nearby temperatures increase by up to 16.4 degrees Fahrenheit.

There are still big gaps in our understanding of the impacts of data centers, even as they boom in number, said Andrea Marinoni, associate professor with the Earth Observation group at the University of Cambridge, and an author of the study, which has not yet been peer-reviewed.

Imagine waking up to the sharp smell of diesel exhaust drifting through your window while you watch your community’s river run low but not from drought, but from the massive water demands of nearby data centers. It sounds dystopian, yet this is the daily reality unfolding in suburbs and rural towns across the United States.

Data centers have long relied on freshwater for cooling, but the AI boom has escalated that demand. In 2025, data centers consumed hundreds of billions of gallons of water for cooling and power generation. Developers are now tapping local rivers, aquifers, and municipal supplies at unprecedented rates to satisfy the thirst of data centers, putting the communities that host them at risk. Data center operations still rely heavily on fossil fuels, emitting air pollutants and fine particulates that raise serious public health risks, especially asthma. Meanwhile, chemical runoff from cooling systems contaminates soil and waterways.

The Trump administration is not going to set nationwide environmental requirements or recommendations for the rapidly growing data center industry, EPA Administrator Lee Zeldin said Wednesday.

A lot of the conversation on the impacts of AI has centered on energy demand and the country’s grid capacity and the potential impact on electricity prices for communities. That’s certainly a real issue. Some focus has also been on the climate impact of carbon emissions and water consumption—also important issues. What I think is getting less attention right now is that this is not just an energy or climate issue, it’s also a public health issue because of the dangers of fine particulate matter. Fine particulate matter is estimated to drive nearly 90% of the health impacts from air pollution and is often not captured in traditional energy or climate assessments or incorporated into infrastructure planning decisions.

Not to worry AI will generate trillions of dollars of profits for civilian corporations via increased productivity & reduced human labor cost. But will create defense industry jobs as AI is integrated into the US national defense infrastructure. And those masters of the universe that control the businesses and AI entities won’t have to live anywhere near a data center. And AI will develop more treatment protocols for those that have to live near a data center.
A little pollution and the diminishing of the US water supply is a small price to pay.

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Electricity use comes in two flavors: one to run the chips, and another to cool the chips while they’re being run.

Here’s a China solution:

A lot easier to get to, service, and put in place than one in outer space, methinks.

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Not in the U.S., methinks. At least for the “put in place” part. I can’t imagine what the environmental permitting for something like that would be like. Years and years of litigation, at a minimum.

The more I think about it, the more I think the attraction of Data Centers in Spaaaaaaaaace isn’t just the economics (or at all the economics), but the permitting and timing. Especially in jurisdictions that are trying to reign them in. It might take you years to get to build your power plant/datacenter combo. But if there’s no environmental permitting in space, you can get them up and running as fast as you can get them up there…

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Would it be more difficult than, say, putting a drilling rig in the Gulf? Those are connected by pipeline and anchored to the bottom (or in a few cases free-floating) so how would this be different?

If anything there is less risk ( no oil spills), no humans need be onboard, cooling it near automatic, the only issue would be intermittency of wind production, which in many oceanic areas would be minimal.

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Well, per the interwebs it can take as long as ten years to get a drilling rig permitted. So even if it were the same, it would be way too long. I don’t know that these would take ten years, but they would certainly take far longer to permit than if they were In Spaaaaaaaace. And perhaps that’s significant. I mean, if even Texas is thinking about making it harder to build these things, I can see why the unregulated Final Frontier seems appealing.

Oh, there’s lots of issues. On the environmental side, it warms the water. That’s the point - to dump all that heat pollution into the surrounding area. Constantly and intentionally. That’s sure to draw some regulatory scrutiny.

The other issues are significant as well. Sea water provides some…difficulties for electrical equipment. They’re not insurmountable, but they’re not trivial - and these things have to be submerged, rather than having nearly all the electrical stuff above the waterline like an oil rig. Biofouling (barnacles and mollusks and the like) will be non-trivial issue, especially since these things won’t have staff on board. And while access for repair and maintenance won’t be anywhere near as tough as in space, they’ll certainly be harder than if it’s just sitting in a field somewhere.

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Sounds like a big problem to me.

DB2

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California built so many batteries in 2023 that it no longer needs gas peaker plants to manage its evening electricity demand — and it retired 2,500 megawatts of them.

Gas peaker plants are the power stations that sit idle for most of the year, waiting for the few hundred hours when electricity demand exceeds what the base generation fleet can supply. In California, the peak demand period is predictable to the hour: 5 PM to 9 PM on summer evenings, when air conditioning is still running, solar generation has ended, and millions of people return home to cook, charge devices, and run appliances simultaneously. Gas peakers have been the mandatory backstop for this four-hour window for forty years.

By the end of 2023, California had installed over 10,000 megawatt-hours of grid-scale battery storage — enough to supply the state’s peak demand increment for four hours without a single gas turbine firing. The California Public Utilities Commission retired 2,500 megawatts of gas peaking capacity in 2023 alone, explicitly citing battery storage as the replacement technology that made the retirement safe for grid reliability. The peakers that had operated for decades, burning gas for a few hundred hours per year, are being replaced by batteries that charge on cheap midday solar and discharge for exactly the four hours the grid needs them most.

The economic signal this sends is permanent. Gas peaker plants in deregulated electricity markets earn revenue only during the hours they operate — and they operate only when electricity prices are highest, during peak demand. Batteries now capture that revenue by charging at near-zero midday prices and discharging at peak-hour prices, outcompeting gas on both energy cost and response speed. California’s peakers did not retire because of environmental regulation. They retired because batteries made them economically obsolete — four hours at a time.

Source: California Public Utilities Commission — Integrated Resource Plan and Storage Deployment Report 2023

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The data center sitting in 30’ of water still needs to be connected to the grid (obviously). The power demand is lower because of the water cooling.

However, whether you’re using batteries which only last a few hours or nat gas plants, the data centers still need 24/7 power. Sounds like part of base load power demand.

DB2

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Obviously this is false given that China just built theirs without connection to the grid.

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Oil platforms, for the most part, have to be connected to their grid (pipelines), so I don’t see how that’s disqualifying. (A few platforms store their oil and offload to tankers, which means the storage must be immense - big enough for, say, a data center, maybe.)

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Its not. Its ideological.

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It’s not. To be powered by wind – which is intermittent – is not practical. Data centers are the quintessential base load and need to have their power supplied as such.

Obviously the grid can have part of its supply from intermittent sources.

DB2

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