Digitalisation and AI impacts on energy transitions and climate targets

Digitalisation is a double-edged sword for energy transitions and climate change mitigation. Digital applications can improve the energy efficiency of processes and systems, but can also induce demand for energy-hungry activity. Digital infrastructure like data centres also has a large energy footprint. AI is amplifying and accelerating these impacts, both for better and for worse. How does this affect the feasibility of long-term climate targets? We use a global integrated modelling framework to quantify scenarios to 2050 describing alignment or misalignment between digitalisation and climate goals. We combine empirical estimates of the energy impacts of digital and AI applications in buildings, transport, and industry sectors with digitalisation’s role in the integration of renewables, storage, and demand flexibility in electricity systems. We show digitalisation uncertainties for future energy demand and CO ₂ emissions are large - similar in magnitude to the effect of all global demographic, economic, and technological uncertainties quantified in future climate pathways. We also show that available near-term assessments of AI impacts within this uncertainty space are optimism biased. Energy transition and emission risks from digital and AI applications in transport and buildings are a factor five of higher than from data centres and other infrastructure. Climate policy is the most effective driver of emission reductions to meet Paris targets but climate-aligned digitalisation reduces energy investment needs by a factor of two down to $35 trillion and brings the global net-zero year forward to as early as 2047. Conversely, climate-misaligned digitalisation drives up energy demand and sees lost opportunities to build a reliable and renewable future electricity system. Resulting increases in near-term cumulative CO ₂ emissions mean the probability of limiting warming to 2°C almost falls below the ‘likely’ threshold, increasing risk of temperature overshoot. Digital transformation can undermine or enable the feasibility and affordability of long-term climate targets delivered by decarbonised energy systems. Entwining digital and low-carbon energy transitions requires strategic governance and institutional innovation to link climate and digital concerns.