Datacentres and Their Environmental Impact
Datacentres consume substantial amounts of energy and water while emitting significant heat. The question arises: who truly benefits from this extensive investment beyond the technology sector leaders?
The two major existential challenges of our era—the climate crisis and artificial intelligence (AI)—are converging amid the rapid expansion of datacentres in Australia and globally.
Discussions about datacentres are ubiquitous, often framed with either admiration for their potential benefits to humanity or concern regarding their implications for climate change, inflation, employment, and housing affordability.
These concerns precede the direct implications of AI itself, which is both inspiring and alarming, and serves as the primary catalyst for the datacentre surge.
Global Datacentre Growth and Australia's Role
Worldwide, there are over 8,000 datacentres, with projections indicating continued growth. To contextualize, this represents just over 5% of the global data infrastructure. The United States hosts the majority of these facilities, yet Australia is increasingly attracting investment, with major global AI companies considering it a potential location for training their models.
Economic, Environmental, and Social Consequences
The ramifications of this datacentre investment boom are significant across economic, environmental, and social dimensions. However, governments domestically and internationally largely adopt a laissez-faire stance—possibly driven by fear of missing out on the purported benefits or reluctance to challenge influential technology entrepreneurs.
Datacentres are often labeled as "infrastructure" by governments and proponents, a term that suggests necessity. However, they do not fit neatly into traditional categories of "hard" infrastructure, such as roads, telecommunications, or utilities, nor "soft" infrastructure like healthcare or education. Unlike these sectors, it remains unclear who benefits from datacentre investments aside from the technology industry leaders. If datacentres are to be considered infrastructure, they should be subject to rigorous evaluation to determine whether their benefits justify their costs, similar to other public projects.
Potential Benefits of AI Enabled by Datacentres
There is no doubt that AI holds the potential to benefit humanity beyond conveniences such as travel planning or entertainment recommendations. For example, in Shanghai, AI is enhancing urban planning; globally, it assists in interpreting X-rays, CT scans, MRIs, and other medical imaging; and it supports grid operators in preventing blackouts. The economic and social advantages could be substantial, but these must be weighed against the associated costs.
Risks and Costs Associated with AI and Datacentres
The Australian Prudential Regulation Authority has issued warnings about the escalating cybersecurity risks posed by AI. Ironically, its recommendation is to employ AI tools to mitigate these threats.
It is well-established that datacentres consume vast quantities of energy and water. In Australia, datacentres are projected to account for up to 10% of national electricity and water consumption by 2030. This is concerning at a time when addressing the climate crisis requires a transition to renewable energy and storage solutions. Allowing datacentres to place additional strain on energy grids could increase emissions and raise costs for ordinary consumers.
Currently, fossil fuels supply approximately half of Australia's energy demand. The expansion of datacentres will contribute to increased greenhouse gas emissions. Notably, Queensland has expressed willingness to continue utilizing coal-fired power, resisting federal government expectations to reduce reliance on fossil fuels. Any comprehensive cost-benefit analysis must incorporate the cumulative emissions impact of datacentres.
Waste heat generated by datacentres presents another challenge. The intense energy consumption translates into significant heat output. While some cold climates, such as Finland, have found ways to repurpose this heat, much of Australia already faces high temperatures, exacerbating heat-related issues.
Economic Growth and Employment Considerations
Regarding economic growth and employment, although the datacentre sector has experienced rapid expansion in the past year, most equipment is imported. Consequently, the direct contribution of this investment to Australia's economic output is minimal. Beyond the construction phase, datacentres tend to employ fewer workers compared to sectors like manufacturing.
Government Perspectives and Future Directions
When Australian politicians or industry advocates discuss datacentre benefits, they primarily refer to the potential advantages of AI that these facilities enable, particularly the productivity gains AI is anticipated to generate. In a February 2024 speech, the assistant minister for science, technology and the digital economy, Andrew Charlton, emphasized that Australia stands at a crossroads. The country could continue as a "technology taker," realizing some productivity improvements, or evolve into "a world-class adopter and creator and exporter of AI technology." However, Australia's current approach to data sovereignty and profit retention suggests that achieving the latter will be challenging.
"That technology works for the Australian people, and not the other way around," Charlton stated, underscoring the government's responsibility.
Examining the current datacentre and AI landscape alongside their associated costs indicates that this objective has yet to be realized.
