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Thought leadership

Barron's Article: Carolyn Kissane on the Clash Between AI and Climate

Lights with Sunset

  • April 04, 2025

  • Modified May 27, 2025

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  • Center for Global Affairs

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<p><span class="p-body"><i>The article was published on Ju;y 24, 2024</i></span></p> <p><span class="p-body"><i>About the author:&nbsp;Carolyn Kissane&nbsp;is the associate dean of the NYU-School of Professional Studies Center for Global Affairs, and the founding director of the SPS Energy, Climate Justice and Sustainability Lab.&nbsp;</i></span></p> <p><span class="p-body">The global race for&nbsp;artificial intelligence&nbsp;has added a wrinkle to the energy transition. While AI may eventually help directly to produce new solutions to climate problems, for now it’s helping to set back many emissions goals. The tension is unavoidable, but the nations that thrive in the coming years must find ways to find a balance.</span></p> <p><span class="p-body">British oil and gas company BP’s&nbsp;annual energy outlook&nbsp;was published last week, and the central message is clear: We are in the energy addition phase of the energy transition but need to move to the substitution phase. Year after year, emissions are increasing instead of decreasing, despite the global deployment of record amounts of solar and wind energy and the emergence of new decarbonized technologies. The world remains heavily reliant on fossil fuels, in part due to rising demand for electricity and power.</span></p> <p><span class="p-body">This challenge is starkly evident in the operations of major tech firms. They have invested billions in renewable energy credits and procurement and are among the most vocal advocates for net-zero targets. Paradoxically, these companies are seeing their emissions rise. In the race to compete in the rapidly surging AI space, we can expect tougher challenges on the emissions front from states and countries seeking to be leaders in the location selections for the world’s data centers. Geopolitics in the 21st century includes the competition for compute power and the energy to support it.</span></p> <p><span class="p-body">Google&nbsp;is reporting higher emissions despite sustainability initiatives and decarbonization investment. Its&nbsp;2024&nbsp;environmental report&nbsp;made headlines for this reason, showing a 48% increase in the company’s carbon emissions over the past five years. “Reducing emissions may be challenging due to increasing energy demands from the greater intensity of AI compute,” it says in the report. Google says it is still committed to its 2020 pledge to achieve 24/7 carbon-free energy for its data centers and office campuses worldwide by 2030. Still, that goal seems less feasible now.</span></p> <p><span class="p-body">Other early adopters of net-zero pledges, such as&nbsp;Microsoft, are also facing similar issues. Although Microsoft is also&nbsp;still committed&nbsp;to its goal of being carbon negative by 2030, its total emissions have risen by nearly a third since 2020, partially driven by&nbsp;AI and data center buildout. Its 2024 sustainability report notes its aims to achieve greater efficiency in power usage.</span></p> <p><span class="p-body">The race to AI supremacy is fierce and hypercompetitive. As long as that’s the case, companies aren’t likely to sacrifice their business plans to emissions goals.</span></p> <p><span class="p-body">In the United States, data centers are projected to consume 8% or more of total power by 2030, up from 3% in 2022. Goldman Sachs describes this as “the kind of electricity growth that hasn’t been seen in a generation.” The U.S. Department of Energy classifies data centers as some of the most energy-hungry buildings, consuming significantly more energy per square foot than traditional commercial structures.</span></p> <p><span class="p-body">Maintaining energy security is vital for economic stability and competitiveness, especially given the high-stakes global tech competition. Balancing net-zero ambitions with the need for powerful compute infrastructure will be a challenge but also a driving force with balancing decarbonization.</span></p> <p><span class="p-body">There is a growing recognition of the need for a robust, all-of-the-above energy strategy to address the exponential growth in computing power demand. This strategy involves a diverse mix of energy sources, including fossil fuels, renewables, and nuclear power, with the caveat that the mix needs to drive toward reducing emissions. The sharp uptick in power demand from previous forecasts means gas-fired power plants and other generating capacities are being considered essential for electricity and power security. States that have pushed out fossil fuel-based power or set up high exclusionary barriers may struggle to keep up with new power demands. While net-zero goals remain crucial, meeting higher capacity demands for electricity will be an ongoing challenge before more meaningful energy substitution comes into play.</span></p> <p><span class="p-body">The surge in demand could also drive innovation in the energy sector. Tech companies are leading the way in data center innovations, which are essential for developing advanced energy solutions in areas like fuel cells, geothermal, fusion, modular nuclear reactors, hydrogen, and carbon capture. These innovations can help meet the high power demands of data centers and support a more renewable-powered digital economy. This is vital for climate security and the energy evolution needed to decarbonize.</span></p> <p><span class="p-body">Balancing energy security, economic competitiveness, and climate goals is a multifaceted challenge in the current era. With strategic investments and a commitment to innovation, it is possible to address these competing demands and eventually move toward more robust energy substitution, but for now, expect more annual reports to highlight energy additions.</span></p>

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