Data Centers Harmful to the Climate – Switzerland Is the Exception

A new study by Allianz Trade, the world’s leading credit insurer, shows that the climate impact of digital infrastructure has been underestimated so far and is likely to continue to rise sharply—unless appropriate measures are taken. «Data centers are evolving from a marginal factor to a structural driver of electricity demand in many regions,» says Patrick Hoffmann, senior climate economist at Allianz. Already today, AI applications account for 15–20 % of data centers’ electricity consumption; by 2030, that share could rise to around 40 %. At the same time, global investment is projected to reach 580 billion U.S. dollars by 2025, while installed capacity is expected to double by the end of the decade.

Switzerland in an International Comparison

In terms of the number of data centers, Switzerland is a minor player on the global stage, but the market is growing at an above-average rate and is increasingly attracting international heavyweights who are choosing Switzerland as a strategic hub for their European infrastructure. Reasons for this include political and legal stability, strong data protection laws, and a first-class digital infrastructure, combined with proximity to major European economic centers.

Smart Site Selection Affects Data Center Emissions

Just how harmful this development is to the climate depends largely on the location. «Depending on the electricity mix, identical computing power can result in many times more emissions,» says Hoffmann. «In countries such as India, Indonesia, or Malaysia, for example, over 600 grams of CO2 are emitted per kilowatt-hour (kWh). In Norway and Sweden, the figures are below 30 grams, and in Switzerland, they’re around 40 grams.»

There is also an advantage when compared to the U.S. (384 g) and China (526 g): «Europe’s comparatively clean electricity mix gives the region a structurally strong starting position for climate-friendly AI growth,» says Hoffmann. «Thanks to a 52 % share of hydropower and 30 % of nuclear power, Switzerland performs very well in emissions comparisons; however, it has a higher water footprint due to the high cooling requirements of nuclear power generation.»

Not as green as expected: Emissions are 57 % higher than estimates

In fact, emissions are significantly higher than previously assumed. The study estimates them at 286 million metric tons of CO2 for 2025. That is about 57 % more than earlier estimates. More than 70 % are attributable to electricity consumption, while about a quarter comes from hardware and infrastructure. AI itself already accounts for 43 to 60 million metric tons of CO2 today.

About 70 % of data center emissions come from the United States and China. Without additional decarbonization efforts, emissions could rise to as much as 643 million metric tons by 2030. In an ambitious scenario, this figure could be limited to around 329 million metric tons. At the same time, indirect emissions from production and construction would become more significant and could account for about half of the carbon footprint.

Climate damage caused by data centers could double by 2030

Costs are also rising significantly: «Climate damage caused by data centers currently amounts to about 68 billion U.S. dollars annually and could rise to as much as 154 billion U.S. dollars by 2030,» says Hoffmann. «AI already accounts for about 13 billion US dollars of that, with the potential to exceed 50 billion US dollars.» At the same time, another bottleneck is emerging: Data centers will consume around 814 billion liters of water worldwide in 2025—by 2030, that figure could reach up to 1.8 trillion liters. Here, too, the U.S. leads the way with 80.4 billion liters of water consumption per year, followed by China with just under 40 billion. Switzerland also performs well in this regard. With an annual consumption of 0.7 billion liters of water, it ranks second alongside Finland, behind Poland (0.4 billion liters). The top countries in Europe are Germany with 6.1 billion liters, the UK with 4.7 billion, and Ireland with 3.8 billion.

AI is also part of the solution for reducing emissions—with the right energy mix

In the long term, however, AI can still help reduce emissions. «AI has the potential to reduce net emissions—provided that its efficiency gains scale faster than the expansion of infrastructure. The transformation of energy systems is crucial here: The key to ‚Green AI‘ lies in clean electricity,» says Hoffmann. Europe has clear advantages here—but without a consistent expansion of renewable energy, this lead is at risk of being lost. «The course must be set now for climate-friendly AI infrastructure,» says Hoffmann.

Source: Alliance Trade

This article originally appeared on m-q.ch - https://www.m-q.ch/de/klimaschaedliche-rechenzentren-schweiz-bildet-ausnahme/