The International Monetary Fund (IMF) has published a detailed report projecting the economic and environmental effects of artificial intelligence (AI) on the global economy between 2025 and 2030. The report states that advancements in AI technology are anticipated to boost global economic output by about 0. 5% annually over this five-year span. This forecast underscores AI’s transformative capacity to drive worldwide economic development. However, the report also highlights the environmental costs linked to AI adoption, especially the escalating energy consumption by data centers that power AI functions. The IMF estimates that electricity demand due to AI could more than triple by 2030, potentially reaching approximately 1, 500 terawatt-hours—comparable to India’s current total electricity consumption, one of the largest energy users globally. This rise in electricity use is expected to impact greenhouse gas emissions significantly. Under existing policies, cumulative emissions increases from AI-related energy consumption may total around 1. 2%. This scenario raises concerns about the sustainability of AI’s growth if energy sources continue to rely heavily on carbon-intensive fuels. Despite these environmental issues, the report maintains that the economic gains from AI will surpass the associated environmental costs. The social cost of greenhouse gas emissions tied to AI’s energy consumption is estimated between $50. 7 billion and $66. 3 billion—a figure still lower than the projected economic benefits generated through AI-driven productivity and innovation. That said, the IMF stresses that benefits from AI will be unevenly distributed across countries and sectors, highlighting the necessity for policymakers and businesses to manage AI deployment responsibly.

Achieving fair access to AI’s advantages and mitigating its adverse effects will require coordinated efforts from governments and corporations alike. Experts from groups such as the Grantham Research Institute have also commented on the findings, suggesting that AI’s environmental impact could be notably decreased or even reversed if technology development prioritizes sustainability goals. AI holds the potential to accelerate the development and adoption of low-carbon technologies, aiding the shift to cleaner energy systems. Realizing AI’s full promise for sustainable development calls for targeted policies and investments in renewable energy infrastructure. The Grantham Research Institute advocates stronger initiatives from both government and industry to ensure AI actively contributes to global sustainability objectives. This includes promoting AI applications that enhance energy efficiency, optimize resource utilization, and help reduce carbon footprints across diverse sectors. In conclusion, the IMF’s report offers a balanced perspective on AI’s influence on the global economy and environment. While AI stands to be a major driver of economic growth in the near future, managing its energy consumption and environmental impacts with care is essential. Balancing these factors demands comprehensive strategies that integrate technological innovation with environmental responsibility and social equity. As AI evolves, its role in shaping economic and environmental outcomes will increasingly reflect the decisions made by governments, industries, and communities worldwide. Proactive steps focused on responsible AI use and embedding sustainability principles can help ensure that AI becomes a catalyst for a more prosperous and environmentally sustainable future.