There was an FT report this week that the world's largest technology companies are now committing to around $725 billion of investment in artificial intelligence infrastructure this year. That is an extraordinary sum to spend on what is, effectively, unproven technology that might be extraordinarily harmful to human well-being, that could undermine the fight against the consequences of human-created climate change.
It is also deeply revealing if contextualised, because organisations like the International Energy Agency and the United Nations continue to warn that the world is failing to invest at the scale required to tackle climate change, despite knowing exactly what needs to be done.
And as the House of Commons Library has reported, climate change is now recognised in international law as an “urgent and existential threat”, with states having clear obligations to act at the highest possible level of ambition. As they note, a 2025 advisory opinion from the International Court of Justice makes clear that governments must both reduce emissions and protect people from harm, with growing scope for legal challenge if they fail to do so.
Meanwhile, the UN currently suggests that emerging markets and developing countries, excluding China, need to spend between $2.3 trillion and $2.5 trillion a year by 2030 to meet essential climate goals. That is four times the current investment rate. Other UN reports estimate the total required annual investment at about $6 trillion per annum.
In that case, the contrast between the apparent ease of funding AI investment and the actual investment that society requires at the moment could not be more stark.
First, what this AI investment makes clear is that there is no shortage of money. $725 billion is not being scraped together with difficulty. It is not dependent on reluctant taxpayers. It is not being constrained by so-called “fiscal headroom”. It is being mobilised with apparent ease because large corporations believe there is profit to be made. This exposes a myth that dominates political debate: that we cannot “afford” to deal with climate change. Clearly, we can afford to do whatever we choose to prioritise.
Second, this makes clear that markets allocate capital according to expected private return, and not social need or necessity. Artificial intelligence promises potential for monopoly rent extraction, data control, and new, highly addictive revenue streams. Climate investment, by contrast, often produces public goods: clean air, stable temperatures, reduced risk. These are not easily captured as profit, even though they are essential for survival. So capital flows to AI rather than to the climate transition.
Third, urgency is not the issue here: direction is. The speed with which this level of funding has been committed demonstrates that, when the incentive exists, transformation can happen very quickly. There is no technical barrier to mobilisation. There is only a failure of political will to direct it.
There are at least three implications that follow from this.
The first is that the idea that governments must wait for growth to fund action on climate change is exposed as nonsense. If $725 billion can be created and deployed for AI because investors anticipate returns, then governments that issue their own currency can create money to fund climate investment when the need is overwhelming. The constraint is not money. It is real resources and political choice that are constraining the allocation of resources to this overwhelmingly critical task.
The second is that reliance on private capital to solve climate change is always misplaced. Private capital has made its preference clear. It will invest where returns are highest and easiest to capture. Climate mitigation often requires long-term, coordinated, system-wide change. That is precisely what markets are least well equipped to deliver.
The third is that the current system is misallocating resources despite the existence of existential risk. We are not short of engineers, materials, or financial capacity. But we are choosing to deploy them to optimise advertising algorithms, automate existing processes, and consolidate corporate power, rather than to decarbonise energy systems, retrofit housing, or restore ecosystems. That is a political economy failure, not a technical one.
There are obvious responses that are required if we take this seriously.
Firstly, governments must lead the climate transition directly, with large-scale public investment in energy, housing, transport, and nature restoration. No apologies for doing so need be offered.
Secondly, regulation must change the investment landscape so that high-carbon activities are curtailed, and low-carbon alternatives are mandated. Private capital will follow when the rules change. It always does.
Thirdly, we have to recognise that not all investments should be prioritised equally. When resources are finite, choices have to be made, and some uses of capital are clearly more socially valuable than others. The climate transition must also be just, linking that action to employment, training, and social security, so that people benefit from change rather than fear it.
But what the juxtaposition of $725 billion for AI and inadequate funding for climate action ultimately reveals is something quite fundamental. We do not have an economic system that is designed to meet human needs. We have one designed to maximise private return. Until that changes, we will continue to see extraordinary sums mobilised at speed for activities that promise profit whilst causing potential harm, and persistent failure to act on issues that determine whether we have a habitable planet.
The question is not whether we can afford to tackle climate change. It is whether we are willing to redesign our economy so that we choose to, and can actually do so. That is what is really required.
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Investment in AI on this scale will drastically increase climate change. The vast amount of energy required will increase emissions and the volume of water required to cool data centres will adversely effect the supply of water for other essential uses. The whole project is nothing else less than an environmental disaster.
The energy and water required to run data centres adds to climate change, and is causing supply and price issues in US already. Given competing companies will be building as much as they can to capture market share, regulation looks essential. But money for lobbying seems just as easily found as investment funds.
The elimination of human labour seems to be a major impact of AI. If nobody is working, who is going to be spending?
[…] who are both based at well-respected US business schools. I should note that this, in part, motivated a post already made this morning on the cost of AI investment. The two posts are linked as a […]
Once upon a time, GDP growth required use of resources – coal, steel, oil etc. To a certain extent it still does but we became much more efficient at using these limited resources (just think of the fuel usage of a modern car compared with 50 years ago). Also, GDP became more about ideas than “stuff” (services v manufacturing). It did seem we could get more and more GDP with ever increasingly efficient use of real resources. Indeed, I have made that point before on this blog – it is not “growth” that is killing the planet but the “wrong growth” that must be curtailed. More poetry, less metal bashing.
Sadly, my vision of rising GDP based on education, care and leisure was hopelessly wrong.
AI is amazing and can deliver great things but we need to use it wisely. I have a car but I still walk when I can.
I am working on GDP whenever I can right now – redefining it
I’ve mentioned previously that I read the Jewish Chronicle every Friday, via my online library membership, to “read the runes” about what to expect from the MSM and government.
This week the JC front page is aimed at taking down Zack Polanski.
“If Zack Polanski gets into power, I may move to Israel, says relative.”
https://duckduckgo.com/?t=fpas&q=If+Zack+Polanski+gets+into+power%2C+I+may+move+to+Israel%2C+says+relative.&ia=web
They’ve tried this “anonymous relative” trick before, and Zack kicked back hard. I hope he does again.
It’s been picked up by the Telegraph, the Express, The Times of Israel, X, LinkedIn.
Link this with the manufactured UK “terror alert” due to a strangely nebulous “Iranian-backed” organisation, and it is clear we are being once again manipulated to accept increased surveillance, increased military expenditure (which isn’t the same as defence), and further, draconian curtailment of our civil liberties. I smell something nasty in the state of UK.
We’ve seen what Shabana Mahmoud does to immigrants. She will turn on the rest of the population next.
The climate emergency is WAY down the list of government priorities.
Much to agree with. Thank you
I was told by a Jewish friend in 2015 that members of his community were planning to leave the country if Jeremy Corbyn became Prime Minister.
The scare tactics worked then, and I worry for Polanski.
Why would that be scary? If some people left the country because they didn’t fancy a government committed to serving everyone instead of just the wealthy, I’d say good riddance.
UK Polish Plumber Times (a weekly publication – founded in my head – today): in a recent poll 100% of polish plumbers in the UK agreed that if Fart-rage wins the 2029 election they will go back to Poland. Ditto most non-UK-based builders.
The way to deal with the nonsense emanating from the likes of J-C is through ridicule.
It’s because we simply lack the ‘shared realities’ that the Ukrainian journalist was talking about the other day in the Guardian.
One of the fundamental reasons why we lack a ‘shared reality’ is because of gross inequality which we have allowed to effectively balloon out of control. Those with the power to set direction have either been bought by vested interests who live different lives to the rest of us or come from that group of people who pursue these narrow interests.
With the low cost of renewable energy, and the cost-benefit of improved insulation, at this point ‘fixing’ our dependence on fossil fuels is potentially a strategy that would address climate change, the affordability crisis and economic growth all at once.
We pay 4x as much as the US for electricity because we have a broken auction system and under-investment.
Now think about a situation where there is plentiful renewable energy generation and homes are encouraged to have sufficient battery capacity for their usual daily needs and solar panels etc.
Instead of energy bills being a substantial burden, they would be minimal. The transition to EVs would be a no-brainer as transport would be much cheaper that way, too. Heating could switch to heat pumps more quickly as it would actually make sense, but in other cases there’d be more electric immersion heaters set to heat the water when there’s free electricity from oversupply.
With lower transport and energy costs would be a downward effect on other goods prices, and growth as manufacturing that’s not economical here currently may become so.
Why are people so scared of a green transition?
People are ‘scared’ because no one wants to ‘pay for it’ – the green transition – just like how people want world class public services and low taxes.
This is what Neo-liberalism does to people:- it puts forward aspirational propositions that essentially exclude or cancel out each other and leaves the population unsatisfied but also cognitively dissonant and confused.
Add in some austerity and the odd economic crisis and resulting hardship just for good measure and you have the perfect recipe to nullify any progressive policy ideas at all. The result is a needy population who’s a consciousness works against its own self interest and maintains the objectives of the capital order.
Marx warned us that capitalism would lead to environmental degradation. With reference to today’s glossary entry on private equity, he also warned us against the financialisation of capitalism through the use of fictitious capital. When will we ever learn?
When it is too late
This suggests a way forward. Governments don’t have to spend the full amount of money required to address climate breakdown, they just have provide incentives to make investment by private finance in Green projects more attractive than investing in AI, undoubtedly a much smaller cost to the public purse.
That would be a double win… promoting investment in Green initiatives and at the same time starving AI of funds.
The chance of anyone addressing climate change and the rest of the global ecocide nightmare, is exactly zero. There is a vanishingly small number of people who even understand the real state of things which is that all life on earth is threatened while any sort of industrial civilisation exists.
People who think that ecocide by other means in the shape of solar panels and wind farms will make any difference are barking up the wrong pylon. It’s not even possible to replace deisel with electric if you didn’t care about the destructive power of machines and the slavery involved and the vast toxic pits.
So there is no chance of people even recognising the reality. If there were some sort of awakening, there’s no one druving the bus. If there were anyone driving the bus, they are self centred psychopaths interested only in their own power and wealth.
It’s hopeless.
I think that conclusion is far too absolute, and, frankly, unhelpful.
There is no doubt that the scale of the environmental crisis is profound. Nor is it true that current responses are sufficient. But it does not follow that the probability of meaningful action is “exactly zero”.
History does not support that kind of fatalism. Large-scale change has happened before when societies have chosen to act; sometimes late, sometimes imperfectly, but nonetheless decisively.
You are right that technological substitution alone is not enough. Simply replacing one form of energy with another, while leaving patterns of consumption unchanged, will not solve the problem. The issue is systemic: how we produce, consume and organise our economies.
But that is precisely why the situation is not hopeless.
We do have the capacity to change those systems. We know what many of the necessary steps look like: reducing waste, investing in sustainable infrastructure, changing land use, and rethinking consumption. None of that is easy, but it is entirely possible.
It is also not true that no one understands the problem or is acting on it. There are many people, institutions and movements working towards change. They are not yet dominant, but they exist, and they are growing.
Despair achieves nothing. It becomes a justification for inaction.
The situation is serious. It is urgent. But it is not predetermined. And you might have given up. I will not.
I’ve not given up except flying. But I don’t have any say in how things unfold.
I am afraid I agree with Bob in that I see almost no chance of people being willing to change habits which exacerbate climate change. The climate is changing but human activity is perhaps not the main cause. We need to take steps to lessen the impact of something we may not actually be able to stop.
Human activity is the main cause.
Stop making excuses.
Robert,
Only a wilfully blind fool could possibly imagine that humans extracting the carbon that was TAKEN OUT OF THE ATMOSPHERE over 2 billion years (that’s 2,000,000,000 years) by planetary processes and deposited as coal, gas and oil, extracted it until it is no longer economically feasible to take any more, and burning it all, in what 350 years?, and PUTTING ALL THAT CARBON BACK INTO THE ATMOSPHERE as CO2 (which is a proven greenhouse gas – first documented by Eunice Foot in 1856 and confirmed by John Tyndall in 1859), increasing the CO2 concentrations from a steady pre-industrial level of about 280 ppm to the current 430ppm and rapidly rising, would have no effect on global temperatures.
All I meant was that it is already happening whatever the cause but of course it’s human.
Thanks
At the annual United Nations climate conference (COP30) last year, Colombia and the Netherlands agreed to host a new and different conference, to create a road map for countries to transition away from fossil fuels. The conference of the willing doesn’t require consensus between all of the world’s countries, as the COP process does.
The First Conference on Transitioning Away from Fossil Fuels (TAFF 1) which just finished in Santa Marta, launcyed a panel of scientists that will advise willing countries on how to shift to clean energy. A separate group of researchers released a a report listing 12 high-level actions that nations can take to support a fossil-fuel phaseout.
The Santa Marta Action Repertoire (SMART) includes this bold proposal:
Transforming supply and demand
This requires:
*Take immediate measures to prevent future emissions. Ban new fossil infrastructure, mandate deep legally binding cuts to methane emissions in the energy sector, accelerate electrification of energy end uses. Inscribe fossil fuel phase down targets in NDCs while supporting renewable energy pathways in low- and middle-income countries.
Implement carbon pricing with international harmonization and phase out fossil fuel subsidies. Use revenues to support the transition and reduce negative social impacts. Form international coalitions for implementation.
Establish enabling standards and monitoring requirements for fossil fuel transition targets and timetables. Mandate public reporting on transition trajectories and closure liabilities.
Implement harmonized fossil fuel supply levies to incentivize demand shifts and fund just transitions. Track economic risks, pursue development benefits and ensure a fair, inclusive transition.
Leverage central banks’ financial and price stability mandates to reduce the financing costs of clean energy, electrification and enabling infrastructure.
Alongside other financing instruments, foster systemic clean energy integration to control inflation, underpin energy security and long-term economic resilience.
Thank you
Thank you. Great post.
[…] felt particularly relevant in the light of the posts I made yesterday on AI and its cost, and the implications it might have for […]
I seem to have given the impression that I think humans have not caused climate change. I am science trained and able to read so of course I don’t think that. I put it badly but I was saying it is already happening and the time for discussion is over.
I thought you were denyiong human causation.
We can all make mistakes in haste when writing comments.
Let’s move on.
To err is human!!!