Environmental Impact of Data Centers

Abstract

This case examines the environmental and ethical challenges of data center growth in Arizona, a drought-parched state affected by a 30-year drought. In the background of rising worldwide demand for cloud computing and generative AI, the case outlines how data centers, no matter their gargantuan power and water needs, are typically the priority of policymakers over that of the local community. These data centers, which consume up to 5 million gallons of water daily, enjoy tax credits and discounted utility rates, while local residents face water shortages. The case outlines tensions between technological advancement, environmental justice, and public welfare, revealing how the local residents are resisting unregulated expansion of data centers. Questions of accountability, exploitation, and embeddedness are paramount, raising significant questions regarding who benefits from digital infrastructure and at what cost. An example of local resistance is a municipal ordinance in Chandler, Arizona, requiring high-consumption industries to demonstrate substantial public benefit before approval. The case raises consideration of balancing digital innovation with sustainability and fair access to resources.