data centers
Data center pros and cons, with the fix for every con
We'll do the cons first. We're not scared.
The cons, honestly
We'll do the cons first, with numbers. We're not scared.
- Power: US data centers used 4.4% of US electricity in 2023, projected at 6.7% to 12% by 2028[1]. A typical AI-focused data center uses as much electricity as 100,000 households, and the largest under construction will use 20 times that[2].
- Capacity costs: on tight grids, new load pushes prices up. PJM's market monitor says data center load caused 46.2% of capacity market charges over the last four auctions[4].
- Water: US data centers used about 66 billion liters of water on site in 2023[1]. A large facility can use up to 5 million gallons a day[15], and about two-thirds of data centers built or in development since 2022 are in water-stressed areas[5].
- Noise: cooling fans run around the clock. Smaller diesel backup generators reach about 85 dB and large ones approach 100 dB[5].
- Air: diesel backup generators emit 200 to 600 times more nitrogen oxides than a gas power plant[5]. A Caltech and UC Riverside modeling study estimated US data center air pollution could cause up to 1,300 premature deaths a year by 2030[8].
- Jobs: even the largest data centers employ fewer than 150 permanent staff[5]. One former Virginia office campus had 5,300 workers at its peak; the data centers replacing it will employ about 100 to 150[15].
- Land and tax deals: the average new site covered about 224 acres in 2024[5], and Virginia's sales tax incentive saves data center companies more than $130 million a year[15].
The pros
- Tax base: in Loudoun County, Virginia, data centers paid $1.2 billion in property taxes in fiscal 2026, 39% of the county budget[3]. In 2020 Loudoun collected $424.7 million from data centers against an estimated $32.3 million in public costs[14]. They send no kids to school.
- Pay: the average private-sector data center employee in Virginia earned an estimated $134,308 in 2020, more than double the state average of $62,250[14].
- Construction: in 2021 Virginia had almost twice as many people building data centers as running them[14].
- Bills, surprisingly: an EPRI causal study found data centers modestly lowered average US retail electricity rates from 2015 to 2024, because fixed grid costs got spread over more sales[6].
- Grid flexibility: data centers can shift when they use power and water, and some utilities let them act like a battery for the grid[13].
- Waste heat: a data center in Finland heats the surrounding community[13].
- Everything else: your email, your bank, your hospital records, and every AI model run in a data center.
Why the pros win
Every con on the list is an engineering or policy problem with a known fix. The pros vanish if you never build.
- Diesel generators: large on-site batteries remove generator noise and pollution[13].
- Noise: closed-loop adiabatic cooling is quieter[13]. Put a limit at the property line.
- Water: air-side economizers and dry coolers cut water use in dry places[1].
- Bills: make big users pay their way. AEP Ohio requires data centers to pay for at least 85% of the energy they subscribe to[5], and PJM's market monitor wants data centers in their own capacity auction[4].
- Siting: data centers don't have to be next door. Fiber lets them sit in industrial zones with power and network links[17].
The anti-data center position treats a list of fixable problems as a reason to stop. That's like banning kitchens because stoves get hot.
Pros and cons at a glance
| Issue | The con | The fix | The upside |
|---|---|---|---|
| Power demand | 4.4% of US electricity and rising[1] | Build generation and transmission | Spreads fixed grid costs[6] |
| Water | Up to 5 million gallons a day at large sites[15] | Dry coolers, economizers[1] | Closed-loop designs use little |
| Noise | Generators near 100 dB[5] | Batteries, adiabatic cooling[13] | Quiet once built well |
| Air | Diesel NOx[5] | Battery backup[13] | Permits and health reviews exist[10] |
| Jobs | Fewer than 150 permanent staff[5] | Count construction and wages honestly | Pay over double the state average[14] |
| Taxes | Incentives worth over $130 million a year in Virginia[15] | Better deals | 39% of Loudoun's budget[3] |
Cons that don't survive a fact check
- 'Bills near data centers went up 267%': PolitiFact rated it Mostly False. The number was wholesale prices at grid nodes, not household bills[7].
- 'They drink more water than anything': US golf courses use more than 500 billion gallons a year and lawns over 2 trillion[15].
- 'They emit dangerous radiation': servers give off low-level non-ionizing fields that stay near the building[12].
- 'They crash home values': the National Association of Realtors found no single data center effect on housing[11].
Who carries the cons
The cons land unevenly. A review of about 700 data centers cited by WRI found nearly half in census tracts with above-median environmental burdens[5]. That's a siting problem, and it has siting answers: industrial zones with power and fiber[17], battery backup instead of diesel[13], and community benefits agreements like Lancaster, Pennsylvania's, which sets aside $10 million each for economic development and for climate and community goals[5].
FAQ
What are the disadvantages of data centers?
Electricity demand, water use in some cooling designs, noise, and sometimes weak tax deals.
What are the advantages of data centers?
Tax revenue, grid investment, jobs, and the computing behind almost every online service and AI tool.
Are data centers good for the economy?
Usually yes for the host county's tax base. The details depend on the local deal.
What are the disadvantages of living by a data center?
The issues neighbors report most are cooling noise, diesel exhaust when backup generators are tested, all-night lighting and construction traffic. Generators are tested regularly and need air permits; Washington state reviews a health impact assessment before it lets a data center build. Ask your county for the noise study and the generator permit[10].
How much water does an AI data center consume?
It depends on the cooling design. Enterprise data centers use about 300,000 to 500,000 gallons a day and large hyperscale sites 1 to 5 million[18]. Designs with dry coolers or air-side economizers use far less[1]. All US data centers together used about 66 billion liters on site in 2023[1].
Why is AI bad for the environment in 2026?
The case against AI is mostly about electricity and water for data centers, and gas or diesel power where grids are short. The case for: GPUs have become about 34% more energy efficient every year since 2008[16], and the IEA says AI can cut grid outage times 30% to 50% and speed up materials and energy research[2]. It's an energy problem. Build energy.
How do data centers impact low-income communities?
A review of about 700 data centers cited by WRI found nearly half in census tracts with above-median environmental burden[5]. The main local risk is diesel generator exhaust. Fixes are known: site them in industrial zones[17], use battery backup[13], and sign a community benefits agreement before approval[5].
Are data centers bad for your health?
No study has yet measured long-term health outcomes in communities next to data centers, and researchers say little is known[9]. The health risk that has been modeled comes mainly from diesel backup generators and fossil power plants[8]. Diesel particles and nitrogen dioxide are the pollutants Washington state regulates at data centers[10].
Do data centers pollute water?
Most data center water evaporates in cooling. The wastewater that is left can carry biocides, corrosion inhibitors and heavy metals, which is why water groups ask for discharge rules and reporting[18]. Closed-loop and air-cooled designs use and discharge much less water[1].
What are the benefits of a data center in your community?
Mostly tax revenue with little demand on schools or roads: data centers paid 39% of Loudoun County's budget in fiscal 2026[3]. Add well-paid jobs[14], big construction crews, and grid costs spread over more customers, which an EPRI study found lowered average rates from 2015 to 2024[6].
Sources
- Lawrence Berkeley National Laboratory, 2024 United States Data Center Energy Usage Report (Shehabi et al., Dec 2024)
- International Energy Agency, Energy and AI, executive summary (April 2025)
- Loudoun County, 'Data Centers: The Loudoun Story'
- Monitoring Analytics (PJM Independent Market Monitor), Market Monitor Report, MC Information Webinar, 2026-07-27
- World Resources Institute, 'From Energy Use to Air Quality, the Many Ways Data Centers Affect US Communities' (Carla D. Walker, Ian Goldsmith)
- EPRI ESCA Back Pocket Insights, 'Have Data Centers Raised Your Electric Bill?' (Asa Watten, John Bistline, Geoff Blanford), brief of the white paper 'Causal Evidence from the United States'
- PolitiFact, 'How much have data centers increased electricity prices?' (Caleb McCullough)
- UC Riverside News, 'AI's deadly air pollution toll' (David Danelski), on arXiv 2412.06288 (Han, Wu, Li, Wierman, Ren)
- Tao and Gao, 'Global data center expansion and human health: A call for empirical research', Eco-Environment & Health 4(3) 100157 (NIH PMC)
- Washington State Department of Ecology, 'Data centers'
- National Association of Realtors, 'There's No Single Data Center Effect on Housing Markets, NAR Report Finds' (2026 Data Center Impact Report)
- BGR, 'What Kind Of Radiation Do Data Centers Emit?' (Briley Kenney)
- Caltech Science Exchange, 'What are the pros and cons of data centers?' (Adam Wierman interview)
- Federal Reserve Bank of Richmond, Econ Focus Q2 2023, 'Virginia's Data Centers and Economic Development' (John Mullin)
- Lincoln Institute of Land Policy, Land Lines, 'Data Drain: The Land and Water Impacts of the AI Boom' (Jon Gorey)
- Epoch AI, 'Trends in AI'
- UChicago Energy Policy Institute (EPIC), repost of UChicago News, 'What are data centers, and why do they need so much power? An expert explains' (Andrew A. Chien)
- Nature Forward, 'Data Centers and Water Use' (Craig Carlson)
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