Data centers are the nerve centers of the digital age. They have grown from basic storage rooms into high-performance facilities that run everything from cloud collaboration tools to AI training, and they now sit at the heart of business continuity and innovation in every sector.
The explosion of digital activity has fuelled a rapid global expansion of data centers. Hardware and software keep getting more efficient, but demand keeps outpacing those gains, and the environmental cost is rising with it: more electricity, more water, more e-waste, more land and more noise.
Climate tech is leading the response. Startups and established players are deploying new ways to cut energy use, reduce water consumption, extend hardware life and integrate clean power. This article sets out the main environmental costs of data centers and where the solutions are coming from.
Data centers by the numbers
Sources: IEA, Energy and AI (2025) and Global Energy Review 2026.
The United States is the epicentre. US data centers used about 4.4% of the country’s electricity in 2023, and the Lawrence Berkeley National Laboratory expects that share to reach between 6.7% and 12% by 2028. In 2025, data centers accounted for around half of all growth in US electricity demand, according to the IEA.
The innovation response is just as large. On the Net0 platform, Net Zero Insights tracks 795 companies building climate solutions specifically for data centers, including 166 focused on liquid cooling alone.
Explore the data center climate tech landscape →
What are the different types of data centers?
As demand for digital services grows, data centers have become the invisible backbone of the digital world, and most businesses rely on a combination of types. Data centers are usually grouped by ownership, infrastructure model, proximity to end users and how they fit into wider IT ecosystems. For investors and businesses, these distinctions matter when evaluating digital infrastructure strategies or climate-aligned technology investments.
Here are the four main types of data centers:
Each type has its own strengths, but they share one challenge: managing the environmental impact of their operations. As the global digital footprint expands, so does the energy and resource intensity of the infrastructure behind it.
The environmental impact of data centers
Data centers create jobs and drive progress in AI and cloud computing, but they also put pressure on power grids, water supplies, land and local communities. These are the six costs the industry needs to address.
Energy demand and greenhouse gas emissions from data centers
The rapid growth of AI is pushing data center electricity use, and the emissions that come with it, to levels that could undermine decarbonisation efforts. As AI moves from text generation to image, video and music generation, data and compute requirements keep expanding.
Global investment in data centers nearly doubled between 2022 and 2024, reaching half a trillion dollars in 2024. Data centers used around 415 TWh of electricity that year, roughly 1.5% of global demand, and that demand grew a further 17% in 2025. Today, data centers and data transmission networks are responsible for about 1% of global energy-related greenhouse gas emissions.
AI-optimised hyperscale facilities are pushing energy use to new extremes. Some now need 100 megawatts or more, and a single large facility can use as much electricity each year as 350,000 to 400,000 electric vehicles. The IEA expects total data center demand to more than double to around 945 TWh by 2030, with electricity use in AI-optimised facilities growing faster still.
Data centers in the USA
As of March 2025, the United States had the most data centers in the world, with 5,426 facilities. It also had the largest share of data center electricity use in 2024: 45% of the global total, followed by China at 25% and Europe at 15%.
US data centers used about 176 TWh in 2023, or 4.4% of national electricity, and could reach 6.7% to 12% by 2028. By the end of the decade, the IEA expects the US to use more electricity for data centers than for making aluminium, steel, cement, chemicals and all other energy-intensive goods combined.
A study of 2,132 US data centers, about 78% of all facilities, found they used over 4% of US electricity between September 2023 and August 2024, with more than half of that power coming from fossil fuels. The result was more than 105 million tonnes of CO2e, 2.18% of total US emissions in 2023.
The strain on local grids will grow as more campuses are built, because construction often moves faster than grid and transmission upgrades. Several jurisdictions have paused new data center connections to clear backlogs and assess capacity, and concerns over electricity prices have led some regions to consider temporary moratoriums. Meeting this demand will take a more diverse energy mix, including advanced nuclear, and much closer alignment between data center development and energy planning.
Water overconsumption in data centers
Data centers use water mainly to keep servers from overheating. A Cornell University study estimates that AI demand alone could require 4.2 to 6.6 billion cubic metres of freshwater a year by 2027, roughly half of the UK’s annual use.
Cooling demand is worsening water stress in regions already facing climate-related shortages. Proposals in arid places such as Arizona show why siting decisions need early stakeholder engagement and an honest assessment of the local water cost.
Evaporative cooling uses less energy than air cooling, so the trade-off is real. As AI keeps intensifying data center water consumption, operators are turning to closed-loop, immersion and direct-to-chip systems. Read about the startups reducing data center water consumption and the solutions cutting water use.
Electronic and toxic waste
Data centers contain thousands of components with different life cycles. Servers, batteries and networking equipment are typically replaced every three to five years, while air conditioning systems and generators can last more than a decade.
Short upgrade cycles, especially in high-performance facilities, produce large volumes of e-waste. In a 2020 survey, 42% of IT managers reported replacing servers every two to three years. Server life depends on design, workload, maintenance and operating conditions, but many operators upgrade early to capture the performance and efficiency of newer hardware, and the AI chip cycle is only accelerating that trend.
Demand for land from data centers
Data centers need substantial land and resources, often competing with agriculture, housing and other commercial uses. In some regions their expansion drives up land costs and stretches local infrastructure. Responsible siting and zoning should account for:
- Power grid and water infrastructure
- Proximity to renewable energy sources
- Impact on surrounding communities and industries
Solar and wind farms also need large land areas, so strategic siting of data centers alongside clean power can limit the combined footprint and support more balanced growth.
Noise pollution
Noise from data centers is rarely discussed, but it increasingly affects nearby communities. The constant hum of servers, switches, chillers and industrial cooling fans can exceed 80 dBA, comparable to a leaf blower.
Residents living near large facilities report sleep disturbance, headaches and stress linked to the unceasing background noise, and chronic exposure is associated with hypertension and cardiovascular risk. Noise also disrupts animal communication and can change wildlife behaviour and migration patterns.
Charting a sustainable path forward for data centers
Sustainable infrastructure is now more than a regulatory requirement. Greener data centers are more resilient, cheaper to run over time and better placed as climate accountability shapes customer and investor decisions.
The next wave of innovation targets each of the costs above: more efficient chips and power distribution, liquid and immersion cooling, on-site clean power and storage, and software that matches workloads to clean energy. Investment in data center cooling alone has grown sharply as AI pushes rack densities beyond what air cooling can handle.
Partnerships are moving just as fast. Hyperscalers are signing agreements with climate tech companies for everything from geothermal and nuclear power to low-water cooling, creating a blueprint for decarbonising digital infrastructure. Find out more about the commercial agreements driving sustainable data center operations.
