As the world keeps warming and electricity bills take center stage in national politics, the data center boom will drive up US carbon emissions and electricity costs. But a few simple policies could help bring both emissions and prices back down.
That’s the message of a new analysis from the Union of Concerned Scientists released Wednesday, which models a variety of scenarios for how to fuel the coming AI boom. The US is poised to see a 60 to 80 percent increase in electricity demand through 2050, with data centers alone making up more than half of the increase by the end of this decade, the analysis finds. If policies stay the same as they currently are—with attacks on renewable energy being embedded into regulatory regimes and few significant national policies restricting carbon emissions from power plants—we could see between a 19 and 29 percent increase in CO 2 emissions from US power plants tied just to the energy needs of data centers over the next 10 years.
There are answers, though: Bringing back tax credits for wind and solar, which were political targets in last year’s One Big Beautiful Bill, would cut CO 2 emissions by more than 30 percent over the next decade, even if data centers eat up a significant chunk of new demand for electricity. They could also make wholesale electricity costs go down by about 4 percent by 2050, after a slight rise over the next decade.
Power plants are the second-largest source of greenhouse gas emissions in the US, making up about a quarter of the country’s overall emissions. Last year, emissions from the US power sector rose slightly, marking the first increase since 2023; commercial buildings like data centers, a separate analysis released last week from the Rhodium Group found, were the main drivers of that demand.
Predicting the amount of energy the US is going to need for AI in the future is an incredibly tricky project. Many of the public estimates we have are provided by utilities that are wrangling a number of requests for new capacity from data centers; data center companies often take their requests to a number of utilities as they shop for the best price, which inflates estimates of overall actual need. Technological advances over the next few years could also make data centers and AI much more energy efficient. Some of the craziest numbers splashed over headlines or trumpeted out by tech and energy executives are probably exaggerations. (Earlier this month, PJM, one of the largest regional transmission organizations in the country, downgraded its projections of how much energy the grid is going to need over the next couple of years after more carefully vetting some data center proposals.) In order to get an accurate read on this, UCS modelers used middle-range electric growth scenarios and assumed that just half the projects publicly announced in the pipeline would actually be built.
But the Trump administration has moved so aggressively against both renewable energy and climate policies in the past year that the analysis likely underestimates how high emissions from data center demand could actually be. While the UCS modeling accounts for some policy changes, including backpedaling on regulations on coal-fired power plants, doing away with renewable tax credits, and delaying some offshore wind projects, it didn’t take others into account. An Interior Department policy that has mandated review of all wind and solar projects on federal lands, for instance, has created a whopping bottleneck of 22 gigawatts of projects—enough to power more than 16 million homes. In December, the administration issued stop work orders for five East Coast wind farms under construction, citing national security concerns. (On Friday, three different judges ruled that construction could proceed.)