The economy suffers more damage than it gains from data centers: ecology and public health deteriorate

Environmental and Economic “Paradox” of Data Centers

A recent study showed that the harm caused by data centers (DCs) to the environment and human health far exceeds their positive contribution to the economy. In 2023, damage from DC operations amounted to $25 billion, of which $3.7 million was directly linked to the computing needs of artificial intelligence (AI).

Financial Flows in North America
- In 2023, $47 billion was invested in DCs for training and deploying AI.
- Technology companies received loans totaling $182 billion, almost twice as much as in 2024.

Key Environmental Issues
1. Water and electricity consumption – a key factor of negative impact.
2. Emissions of pollutants (PM₂․₅) and greenhouse gases that affect population health and the climate of future generations.

Carnegie-Mellon Economist Analysis
Economist Nicholas Müller analyzed about 2,800 active DCs. He compared their electricity consumption with the pollution level generated by local power grids and estimated the risk of premature mortality in monetary terms through the social cost of carbon.
- Environmental damage in 2023: $25 billion.
- AI portion: $3.7 billion.

Müller emphasizes that external costs (e.g., illness and premature death) are borne not by the companies themselves but by residents near DCs.

Confirmation from Independent Studies
- A Piedmont Environmental Council study found that emissions from a single DC in northern Virginia could amount to $53–99 million annually in health damage.
- In the U.S., cities and counties actively compete to attract DC investment to create jobs and increase tax revenues.

Tax Balance
Metric 2017 2023 Total DC contribution to state revenue (federal + regional + local) $66.2 billion $162.7 billion
However, incentives and subsidies provided to municipalities partially offset these receipts. Estimates suggest that 10 states lose more than $100 million per year due to tax incentives for data centers.

Conclusion
While DCs create jobs and bring significant tax revenue, their environmental footprint and impact on public health remain a serious problem. It is necessary to balance economic benefits with commitments to protect the environment and public health.