MIT Sloan School of Management researchers find that AI’s biggest climate threat isn’t the power draw of data centers — it’s the economic growth AI unleashes.
By building a comprehensive framework that integrates AI’s direct operational footprint, indirect economic impacts, and potential technological breakthroughs, the researchers reveal that the expansion of AI is worsening the climate crisis.
Cambridge, MA, Aug. 12, 2026 (GLOBE NEWSWIRE) — As the race to capitalize on artificial intelligence intensifies, tech giants are making bold promises about AI’s potential to accelerate the global transition to clean energy. But do those claims hold up against the laws of physics and economics?
In a forthcoming book chapter, “The Net Climate Impact of Artificial Intelligence (AI): Balancing Current Costs with Future Climate Benefits,” MIT Sloan School of Management professor John Sterman and researcher Jennifer Turliuk, SFMBA ’25, president of Koru Labs, evaluate the clash between AI optimists and climate skeptics. By building a comprehensive framework that integrates AI’s direct operational footprint, indirect economic impacts, and potential technological breakthroughs, the researchers reveal that the unmanaged expansion of AI is actively worsening the climate crisis. Additionally, they explain why technology alone cannot solve it and show how we can make progress.
The framework is now embedded in En-ROADS, the climate simulator developed by Climate Interactive and MIT Sloan, so anyone can explore AI’s impacts. “AI is a remarkable technology, both promising and problematic. But, by itself, it does not solve, and may worsen the climate problem,” said Sterman, co-faculty director of the MIT Sloan Sustainability Initiative. “We need sound policies to do that.”
AI’s emissions are significant — but more efficient AI won’t save us
Greenhouse emissions from power-hungry AI are growing rapidly. Still, En-ROADS puts AI’s direct contribution to warming at roughly 0.1°C (0.2°F) by the year 2100 because those emissions remain small beside emissions from transportation, buildings, industry, agriculture and other sources; because renewables are decarbonizing electricity production; and because chips, algorithms, and data centers keep getting more efficient. But efficiency cuts both ways: it makes AI cheaper, increasing AI demand and eroding some of the savings. That direct rebound effect is why even a fourfold drop in AI’s energy intensity yields a negligible reduction in warming absent new climate policy.
AI-driven economic growth could significantly increase global emissions
AI is widely expected to raise productivity and accelerate economic growth, but faster growth means more energy and more emissions: the indirect rebound effect. For example, if AI eventually boosts gross world product by 25%, well below the more bullish forecasts, En-ROADS finds expected warming in 2100 climbs from 3.3°C (5.9°F) to 3.6°C (6.5°F), sharply worsening sea level rise, wildfire threats, extreme weather, crop losses, and other climate-related damage.
Sterman uses electric vehicles to illustrate the indirect rebound effect. An EV can cost a household thousands a year in lower fuel and maintenance costs. “When I ask students and executives what they’d do with that extra money, they often say ‘buy more stuff’ and ‘take my family to Disney World,’” he said. “But the emissions from that trip can outweigh the reduction from your EV.”
“Indirect rebound is the big issue,” Sterman said. “Individuals, corporations, and governments all want faster growth in their income, sales, and economy, and AI may help achieve those goals. But unless we implement policies that rapidly lower emissions economy-wide, any economic boost from AI will generate a lot more emissions, the climate will get notably worse — and that feeds back to harm the economy.”
Future AI climate innovations are unlikely to offset near-term warming
Might AI instead accelerate the technologies we need to solve the climate crisis? Two obstacles stand in the way: Focus and timing. Focus: most AI today is not aimed at climate solutions, while too much is used to keep us glued to our phones and buy more stuff, while it threatens our society with cyberattacks, disinformation and deepfakes. Timing: AI raises emissions now, while any AI-enabled reductions arrive after the long delays necessary to get from lab to pilot, as well as raise capital, and scale globally.
“AI-enabled innovations might eventually offset the additional warming from AI’s earlier emissions,” Sterman said. “But Greenland and Antarctica aren’t going to magically re-freeze, and the forests burned, crops lost, businesses and homes destroyed along the way won’t reappear.”
Are companies accurately measuring AI’s climate impact?
Current greenhouse gas accounting worsens the problem by letting firms report progress the atmosphere never sees. One major tech firm recently claimed its new AI data center would run on 100% carbon-free power drawn from an existing nuclear plant. But output of the plant did not grow, so every megawatt diverted to the data center requires a megawatt more for households and businesses from elsewhere on the grid, where coal and gas supply nearly 60% of generation and almost all of the CO2. The deal increased emissions, but they don’t show up in the firm’s carbon account. “The atmosphere does not care about clever accounting,” Sterman said. “It responds only to the laws of physics.”
What business leaders and policymakers can do
Both problems are fixable, Sterman and Turliuk believe, largely with policies needed to cut emissions economy-wide. A meaningful price on carbon would boost efficiency and green power and focus more AI research on climate solutions. Turliuk points to disclosure as the companion. “Many large corporations are no longer on track for their net-zero targets, and some have stated that this is due to AI,” Turliuk said. “Governments at all levels should implement a meaningful carbon price, require disclosure of AI’s environmental impacts, promote energy efficiency, stimulate renewables, and prevent AI greenwashing.”
Acting now is in business’s interest, Sterman argued, because transparency can stave off costly AI regulation and moratoria, and economy-wide climate policies raise the benefits of AI by reducing the fires, flooding, and supply chain disruptions that hurt business and slow growth. “AI today is making climate change worse and might make it a lot worse if it drives faster economic growth” Sterman said. “But if we enact strong policies to cut emissions throughout the economy, it’s still possible to stay below 2°C (3.6°F). Harder, but still possible.” He added: “Don’t take our word for it — use En-ROADS to explore these issues yourself.”
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- By building a comprehensive framework that integrates AI’s direct operational footprint, indirect economic impacts, and potential technological breakthroughs, the researchers reveal that the expansion of AI is worsening the climate crisis.
CONTACT: Matthew Aliberti MIT Sloan School of Management 7815583436 [email protected]
