Economic Survey slams energy guzzling developed world

“Even as the data centres are ramping up energy demand, cloud storage facilities, crypto mining, and AI are all expected to increase this exponentially.”

The report also took exception to the developed world’s fancy to such energy demand driven technologies while planning to impose carbon taxes on carbon-intensive imports by the developing countries like India.

This technological advancement, aimed at enhancing efficiency and productivity, paradoxically contributes to higher emissions. “Despite ambitious pledges by leading technology firms to achieve Net Zero emissions by 2030, their pursuit of AI dominance has resulted in a 30 per cent rise in emissions by 2023,” the report further cautioned. This means that India not only has to deal with climate change and undertake energy transition but also confront the protectionism of developed countries, said the report.

The European Union is on course to implement its Carbon Border Adjustment Mechanism (CBAM), and both the United Kingdom and the United States are in different stages of imposing their versions of it in due course. The EU argues that this mechanism creates a level playing field for domestically manufactured goods, which must adhere to stricter environmental standards, and help reduce emissions from imports. However, other nations, particularly developing countries, worry that this would harm their economies and make it too expensive to trade with the bloc.

According to a report by the independent think tank Centre for Science and Environment (CSE), CBAM will impose an additional 25 per cent tax on carbon-intensive goods, such as iron, steel, cement, fertilisers, and aluminium, exported from India to the EU.

Based on data from the past three years, this tax burden would represent 0.05 per cent of India's GDP. "It would be a comedy if it were not real and tragic. Even as developed nations prepare to impose a carbon tax at the border on imports coming into their countries laden with carbon, they are ramping up energy demand like never before, thanks to their obsession with letting AI guide, take over and dominate natural intelligence," the report said.

For instance, the report cited a broad estimate by the International Energy Agency which said that a single Chat-GPT search consumes 10 times more energy than a similar query on Google.

According to a research report published in April, Goldman Sachs analysts wrote that the demand for power in the United States would experience growth not seen in a generation, thanks to AI, and that "transmission, one of the major bottlenecks for clean energy transition, and the addition of data centres and AI could exacerbate this".