The rapid expansion of artificial intelligence (AI) technology is sparking an environmental dilemma at the heart of the world’s net zero ambitions. According to a newly published report from the University of Cambridge’s Minderoo Centre for Technology and Democracy, unchecked growth of AI-driven data centres could fuel a dramatic surge in global electricity consumption—potentially up to 25 times today’s levels by 2040.

Countries such as the UK have pledged leadership in both AI and decarbonization, but the Cambridge report warns that without urgent policy reform and transparency, the environmental costs of the tech sector risk overshadowing the climate benefits AI could deliver.

The Carbon Challenge: AI’s Skyrocketing Energy Demand

AI models, particularly energy-hungry generative AI like GPT and large language models, require vast computational power. This power is increasingly supplied by energy-intensive data centres, placing mounting pressure on national electricity grids and compounding global carbon emissions.

By 2040, the Cambridge study forecasts that global tech energy demand could reach up to 8% of total greenhouse gas emissions—far outstripping the aviation industry’s current share. Data centres already account for about 1.5% of global emissions and consume 2-4% of national electricity in digital economies such as the US, China, and parts of Europe. In Ireland, for example, 20% of Dublin’s power is now devoted to data centre clusters—a figure likely to grow sharply as AI adoption accelerates.

Self-Reported Emissions Rise—But the True Scope May Be Greater

The report synthesises projections from major consultancies and corporations, drawing attention to a consistent pattern: Big Tech’s self-reported energy and emissions data may vastly under-represent the full climate impact of the sector. Despite public climate pledges, recent years have seen emissions from tech giants climb rapidly.

• Google’s reported emissions jumped 48% from 2019 to 2023.
• Microsoft’s emissions rose nearly 30% from 2020 to 2023.
• Amazon’s carbon footprint increased by around 40% between 2019 and 2021.

Although some companies have reported recent improvements, independent environmental groups and investigative reports suggest that the sector’s indirect and supply chain emissions—those not fully captured by direct reporting—are even larger.

Policymakers Face a Stark Choice: Transparency and Regulation vs ‘Magical Thinking’

The UK and other developed countries face what Cambridge’s researchers call a “magical thinking” paradox: aspiring to world-leading AI innovation without a robust plan to account for and moderate the surge in electricity and water consumption. The result: AI may end up derailing net zero goals rather than advancing them.

Lead author Bhargav Srinivasa Desikan notes, “The lack of hard data on electricity and water consumption as well as associated carbon emissions of digital technology leaves policymakers and researchers in the dark about the climate harms AI might cause.”

Professor Gina Neff, Executive Director of the Minderoo Centre, adds, “Big Tech is blowing past their own climate goals, relying on renewable energy certificates and offsets rather than meaningful reduction in emissions. Generative AI may be helpful for designing climate solutions, but there is a real risk emissions from the AI build-out will outstrip any climate gains.”

Big Tech’s Search for Green Power: Nuclear, Renewables, and “Energy Timebombs”

Seeking to mitigate their climate impact, several tech giants are pursuing high-profile investments in nuclear and renewable energy. OpenAI’s CEO Sam Altman has championed fusion power as critical for AI’s future, while Meta has said nuclear baseload is key for data centre operation. In a landmark move, Microsoft recently inked a 20-year deal to revive the Three Mile Island nuclear facility in Pennsylvania, the site of the worst US nuclear accident.

Yet, given the uncertain pace of new nuclear deployments and the long construction timelines for modern plants, immediate relief is limited. Renewable energy integration, while growing, still faces challenges of grid reliability and regionally variable supply. As AI’s demands accelerate, some grids—already at capacity—may be forced to rely on fossil fuels to bridge the gap.

A Double-Edged Sword: AI’s Promise and Peril for the Climate

AI’s ability to accelerate climate science, optimize energy systems, and inspire green technology remains widely recognized. According to former Google CEO Eric Schmidt, AI-driven scientific breakthroughs could outweigh its own energy costs in the long term. Applications range from advanced weather forecasting and improved battery research to AI-powered energy management systems.

Nevertheless, the Cambridge report asserts that such benefits will be undermined if the sector’s own emissions overshadow its climate contributions. “Despite the rapacious energy demands of AI, tech companies encourage governments to see these technologies as accelerators for the green transition,” says Neff. “These claims appeal to governments banking on AI to grow the economy but may compromise society’s climate commitments.”

Policy Recommendations: A Roadmap for the ‘AI Era’

To curb AI’s growing environmental footprint, the report calls for:

• Mandatory transparency in energy and water consumption reporting for data centres and AI services.
• Integration of AI’s emissions into national decarbonisation strategies with firm reduction targets.
• Regulatory oversight—including energy efficiency standards from bodies like Ofgem in the UK.
• Tying public AI research funding and large-scale compute projects to clean energy adoption.
• International standard-setting through forums such as the UN’s COP climate summits.

The authors also advocate for broader stakeholder involvement in the UK’s AI Energy Council, which currently consists exclusively of industry and energy bodies, rather than including environmental groups or civil society representatives.

Professor John Naughton, Chair of the Minderoo Centre’s Advisory Board, warns: “Every megawatt allocated to AI data centres will be a megawatt unavailable for housing or manufacturing. Governments need to be straight with the public about the inevitable energy trade-offs that will come with doubling down on AI as an engine of economic growth.”

The Urgency of Action

As the world enters an era of exponential AI expansion, the Cambridge report serves as a critical call to action for transparency, oversight, and innovation in climate policy. With global tech competition intensifying, robust regulation and international collaboration will be essential to align AI growth with the ultimate imperative: a sustainable, net zero future.