IMF Says AI Economic Boost Outweighs Emissions Cost

Artificial intelligence will deliver significant economic benefits that exceed its environmental impact, according to a report from the International Monetary Fund (IMF) released at its annual Spring Meetings with the World Bank Group.

The IMF projects AI will boost global GDP by approximately 0.5% annually between 2025 and 2030, with economic gains surpassing the costs of increased carbon emissions from energy-hungry data centres.

“Despite challenges related to higher electricity prices and greenhouse gas emissions, the gains to global GDP from AI are likely to outweigh the cost of the additional emissions,” the IMF said, as reported by Reuters.

“The social cost of these extra emissions is minor compared with the expected economic gains from AI, yet it still adds to the worrisome buildup of emissions.”

The IMF has plotted the emissions impacts of expansion in the IT sector, below, with the left axis showing the total increase in greenhouse gas emissions in metric tons of carbon dioxide (MtCO2e) from 2025-2030 from IT sector expansion. The right axis shows the total increase in global emissions in 2030 relative to the baseline emissions as a result of this expansion.

AI-driven global electricity needs could more than triple to 1,500 TWh by 2030, equivalent to India’s current electricity consumption, the IMF estimates.

Under existing energy policies, AI adoption would increase greenhouse gas emissions by 1.2% between 2025-2030. The social cost of these emissions ($50.7-66.3 billion) remains smaller than projected economic gains.

Grantham Research Institute policy fellow Roberta Pierfederici told Reuters: “Governments, tech companies and energy companies must play an active role in ensuring AI is used intentionally, equitably and sustainably.”