IMF: Economic Gains from AI Likely to Outweigh Climate Costs

• AI could boost global GDP by 0.5% annually from 2025 to 2030, according to the IMF.

• Emissions from AI-related energy use are expected to rise, but remain economically justifiable.

• Total energy demand from AI could reach 1,500 TWh by 2030 – equal to India’s current consumption.

• The IMF calls for greener policies and renewable energy adoption to offset AI’s carbon impact.

The International Monetary Fund (IMF) has released a new report suggesting that the global economic benefits of artificial intelligence could far exceed the environmental costs tied to its rising energy demands.

According to the analysis, AI has the potential to add an average of 0.5% to global GDP annually over the next five years, despite an anticipated 1.2% increase in global emissions by 2030 caused largely by energy-hungry data centers. The projected electricity demand for AI operations may reach 1,500 terawatt hours, equivalent to the current consumption of India.

While the environmental toll could translate into $50–66 billion in social costs, the IMF views this as a manageable trade-off, especially if AI is leveraged to drive innovation in renewable energy, transportation, and agriculture.

The report emphasizes the urgent need for governments and tech companies to adopt sustainable energy strategies, ensuring that AI’s rapid growth is not only economically beneficial but also environmentally responsible.