Big Tech’s big lies on carbon emissions

Over the past few years, artificial intelligence and big data have become all-pervasive in our lives, being used by businesses to drive sales and reduce costs, while individuals are turning to them to make their routine tasks easier.
But as with cryptocurrencies, AI and big data have been adopted by societies without any careful thought about regulation or the environmental costs that come with these new technologies.
As these are still early days for these technologies and they are growing rapidly, there is little data about their impacts, direct and indirect, on climate change, notably through the huge data centers that have sprung up all over the world and are the backbone of these technologies.
As with most other businesses, the companies powering these technologies have tried to project that their data centers are almost harmless to the climate. They claim that most of their power needs are being met by renewable energy and that their carbon emissions are nominal.
However, this facade has been debunked in several reports. A report by Bloomberg Green pointed out that the Big Tech firms rely almost entirely on carbon credits to claim that their facilities are carbon neutral. Most of these companies are using renewable energy certificates that have been unbundled by their original owners and these companies are simply buying them in an attempt to prove they are benign to the climate.
Carbon credits are essentially nothing but a smokescreen, as there is little monitoring by independent or government regulators on what is actually being done on the ground to counter carbon emissions. Several big firms have already been left with egg on their face due to these fraudulent techniques. Carbon credit certification has become a multibillion-dollar business that is happily being misused and abused by sellers and buyers alike, while the regulators sleep over the issue.
Way back in 2016, more than 30 French-Israeli businessmen were convicted by courts in Paris for a multibillion-euro fraud in carbon trading. So rampant has it become today that Interpol has even opened a special division to track carbon credit crimes.
In August this year, an industry body, the Integrity Council for the Voluntary Carbon Market, announced a significant alteration to its accounting practices. It said that carbon credits issued under existing renewable energy methodologies will no longer qualify for its “Core Carbon Principles” designation. This ruling impacts about 32 percent of the voluntary carbon market, translating to about 236 million carbon credits.

The Big Tech companies continue to use these suspicious certificates, even though their in-house emissions have been rising.

Ranvir S. Nayar

This decision, made by the industry, reflects the extent to which the rot has spread in the carbon trading industry. It also marks a shift in focus toward more stringent standards to ensure that carbon credits represent real, additional and verifiable emissions reductions. This move is most welcome and needs to be the standard for other issuers of carbon certificates.
But the Big Tech companies continue to use these suspicious certificates, even though their in-house emissions have been rising. Microsoft, for example, says its carbon emissions have increased by 30 percent since 2020, flying in the face of its declared goal to become carbon negative by 2030. The company, like its rivals in the field, has attributed this rise in emissions to the carbon-intensive materials used in building data centers, such as cement, steel and microchips. But they keep on claiming that the energy required for AI and big data is largely sourced from zero-carbon resources like wind and solar power.
But there is enough evidence to show that these claims are misleading, or even outright lies. The use of these certificates allows companies to claim that their energy consumption is more environmentally friendly, even if they are still relying on fossil fuels. This practice significantly distorts the true carbon footprint of the tech giants.
Thus, it is surprising or even shameless on the part of the Big Tech giants — whose turnovers and profits exceed the gross domestic product of most countries in the world — to use these highly controversial routes to indulge in flagrant greenwashing. It would only take a minor investment of a few million dollars, at most, to set up verifiable and physical renewable energy generation, whether using solar or wind energy. Yet their reluctance to invest even these petty sums shows their real intent.
Analysis published last month showed that the emissions from data centers owned by the big four of the tech world were almost eight times as much as they claimed.
And as far as emissions due to big data and AI are concerned, they are set to rise sharply as the real boom in AI began only last year with the arrival of ChatGPT and other similar players. The International Energy Agency says that, in 2022, data centers were responsible for up to 1.5 percent of global electricity consumption. Morgan Stanley has stated that data center emissions will amount to 2.5 billion tonnes by 2030, the equivalent of almost 7 percent of last year’s total global emissions.
It is time that either stock market regulators or government environmental regulators got their act together and mandated that these companies, which are floating in hundreds of billions of dollars of profits each year, invest a few million in making their data centers and offices entirely powered by on-site renewable energy production. It is time to prevent them from using shady, fraudulent techniques to claim offsets for some trees allegedly being planted in the Amazon basin, Congo or Indonesia.

• Ranvir S. Nayar is the managing editor of Media India Group and founder-director of the Europe India Foundation for Excellence.