Forty mayors from around the world have signed onto a pact announced Tuesday to try to shape how urban data centers are built and operated, after years of pressure from developers, utilities and the corporate appetite for instant AI systems. The pact is meant to guide data center development sustainably and not at the expense of cities’ natural resources, energy prices or climate targets, but the basic conflict is already plain: the bosses want the land, the power and the water, and ordinary residents are left to absorb the costs.
Who Pays for the Server Farms
C40 Cities, an alliance of nearly 100 cities seeking to impact climate change, launched the pact during London Climate Action Week. C40 said many new data centers are being built in rural areas for cheap land, but metropolitan areas are also under pressure, with about 1,700 data centers located in its network of cities so far. Development of data centers is expected to grow by over 40% in 50 of those cities. The scale is not subtle: a sprawling infrastructure buildout driven by corporate demand, with cities forced into the role of gatekeepers for projects that can reshape power grids, land use and water supplies.
C40 became involved after the mayors of Phoenix and Melbourne, Australia, raised concerns about data centers using large amounts of electricity and water and competing with housing developers for available land. That competition says plenty about who gets priority in the urban hierarchy: not people needing homes, but facilities built to keep artificial intelligence and major companies running at speed.
Cassie Sutherland, a managing director at C40, said, “We found out that the challenges in every region around the world were very similar,” and added, “Our approach was to say OK, how do we now use a global mayoral voice to come together with the conditions under which they will accept data centers.” Andrew Batson, global head of data center research at JLL, said data centers are built in cities to be close to firms that want systems powered by artificial intelligence to respond instantaneously, and that major companies locate data centers in cities to be near their business operations. He said data centers tend to be built in clusters, forming ecosystems in metropolitan areas that might outweigh factors like land costs, and that it is only more recently that data centers have moved out into rural areas.
The Limits of Managed Resistance
Political and local opposition has been growing because of fears about blackouts, rising electricity bills and the centers’ voracious water needs. Some states are suspending tax breaks or considering moratoriums on data center construction. Even here, the response stays trapped inside the machinery of permission and regulation: tax breaks can be suspended, moratoriums can be considered, and the same institutions that enabled the boom are now trying to manage the fallout.
About half of the participating mayors are from the U.S. That includes Seattle and the California cities of Palo Alto and Riverside. In the Southwest, Phoenix and Albuquerque, New Mexico, joined. On the East Coast, Beverly, Massachusetts, signed, as did Lincoln, Nebraska; Chicago and Cleveland in the Midwest and Miami in the South. European cities in Greece, Spain, Italy, Germany, the United Kingdom and Norway joined, as did Montreal in Canada. The pact also includes African cities in Ivory Coast, Sierra Leone, South Africa and Kenya, as well as Asia-Pacific cities in India and Australia, and Lebanon in the Middle East.
Sutherland said the vision needs to be translated into action, with each city using it as a framework for its own regulations or guidelines. She said mayors are limited in what they can do unilaterally and will need buy-in from other government officials, utilities and the private sector. That is the familiar bottleneck: even the people tasked with representing cities are boxed in by the utilities and private sector that shape what gets built.
What They Call a Framework
The pact lists several standards for data center developments. Urban data centers should be built on abandoned or underutilized land in an area that minimizes negative impacts on noise, heat and air pollution. Developments should be fueled by renewable energy and battery storage, and data centers should reduce water use and emissions, as well as capture waste heat. The mayors also want data centers that create jobs, buy local goods and services, pay for their own infrastructure upgrades and listen to community feedback.
Phoenix is in the top 10 for data center markets in North America. The Phoenix metropolitan area has pending permit requests that would double the electricity demand if all of these data centers were built. Developers are drawn there for its reliable power and predictable weather. The permit requests show the scale of the pressure on local infrastructure: if approved, the demand would surge while residents live with the consequences.
Phoenix Mayor Kate Gallego said she is concerned that investments in data centers right now are worsening climate change and not meeting the needs of communities. She said mayors are forming a unified front to help improve data centers everywhere so that developers do not simply look for communities unable to advocate for their own benefits. Gallego said, “We understand the importance of this innovation, it’s creating great jobs in our community,” and added, “We just want to make sure that we get it right for our local residents and for the health of our planet.”
As of Tuesday, none of Southeast Asia’s cities had endorsed the pact. C40 said several said they could not because of national policies or other complications, but the conversations are ongoing. The region accounts for a quarter of global energy demand growth, partially driven by more than 2,000 data centers in Indonesia, Malaysia, Singapore, Thailand, Vietnam and the Philippines, according to the think tank Ember. The International Energy Agency said the annual energy demand from these data centers will more than double in the next five years. This is most evident in Malaysia, which has drawn investments and interest from Microsoft, Google and Nvidia.
If Melbourne follows through on all its plans, data centers will annually consume up to 20 billion liters (5.3 billion gallons) of water, or about 4% of the drinking water supply, according to the city’s Lord Mayor Nicholas Reece. He said the water supply is already strained by the growing population, longer dry periods and more extreme heat driven by climate change.
Melbourne played a key role in the pact. Reece said stricter environmental regulations there likely will not threaten future plans. He said data centers are going to go where there is enough power and land, and where they are close to the markets and companies using artificial intelligence. Reece said, “We don’t want to see a race to the bottom between cities where governments, desperate for investment, are chasing data centers on any terms possible,” and added, “We want to see a better framework in place so that the investment rush in data centers can be a win-win — a win for investors and also a win for local communities.”