American data centers generate $25 billion in environmental damage every year, sometimes costing local communities more than the value they add to the economy.
April 23, 2026
Original Paper
Measuring the Impact of Data Centers in the United States Economy: Monetary Damage from Air Pollution and Greenhouse Gas Emissions
SSRN · 6610763
The Takeaway
The hidden cost of the digital cloud is measured in billions of dollars of air pollution and greenhouse gas emissions. Data centers now consume about 6% of all electricity in the United States. Many people assume that the tech industry is a clean alternative to traditional heavy manufacturing. This study shows that in some regions, the local environmental damage exceeds the industry's entire contribution to the local GDP. For everyday users, this means every search and AI query has a concrete price tag that the planet is currently paying.
From the abstract
This paper quantifies the environmental externalities associated with electricity consumption by data centers in the United States, focusing on damages from local air pollution and greenhouse gas (GHG) emissions. Using facility-level data for approximately 2,800 operational data centers in 2025, combined with electricity grid characteristics and emissions data, the analysis estimates pollution impacts through the AP4 integrated assessment model and applies the social cost of carbon for GHG valua