AI’s climate impact is much smaller than many feared

Scientists from the University of Waterloo and the Georgia Institute of Technology analyzed U.S. economic data alongside estimates of how frequently AI tools are used across different industries. Their goal was to understand what might happen to the environment if AI adoption increases along its current path.

According to the U.S. Energy Information Administration, 83 percent of the nation's economic activity relies on petroleum, coal and natural gas. These fuels release greenhouse gases when burned. The researchers noted that total energy use from AI in the United States matched the electricity consumption of Iceland, yet this amount remained insignificant when viewed at national or global levels.

Local Energy Pressures Can Still Be Significant

"It is important to note that the increase in energy use is not going to be uniform. It's going to be felt more in the places where electricity is produced to power the data centers," said Dr. Juan Moreno-Cruz, a professor in the Faculty of Environment at Waterloo and Canada Research Chair in Energy Transitions. "If you look at that energy from the local perspective, that's a big deal because some places could see double the amount of electricity output and emissions. But at a larger scale, AI's use of energy won't be noticeable."

The study did not explore economic outcomes within the specific communities that host data centers, but the researchers identified several positive takeaways.

AI Could Support Cleaner Technologies

"For people who believe that the use of AI will be a major problem for the climate and think we should avoid it, we're offering a different perspective," Moreno-Cruz said. "The effects on climate are not that significant, and we can use AI to develop green technologies or to improve existing ones."

To develop their findings, environmental economists Moreno-Cruz and Dr. Anthony Harding reviewed a variety of economic sectors, the types of jobs within those sectors, and the share of tasks that could potentially be performed by AI.

Moreno-Cruz and Harding intend to apply the same approach to additional countries in order to understand how AI adoption may influence environmental outcomes across different regions of the world.