AI energy surge risks eroding record renewables gains, UN warns

Artificial intelligence's surging energy demands are undermining global climate efforts and driving up fossil fuel consumption, UN Climate Change Executive Secretary Simon Stiell warned Sept. 21, calling on tech industry leaders to align with climate goals or risk losing their social license to operate.

Speaking at an event during Climate Week in New York, Stiell delivered some of his sharpest remarks yet on the energy footprint of the AI sector, warning that data center expansion was already straining power grids and pushing up household and business energy costs worldwide.

"Energy guzzling Artificial Intelligence is driving up planet-heating pollution from coal, oil and gas, while ratcheting up energy costs for households and businesses," Stiell said. "AI leaders are now on thin ice when it comes to license to operate, and sinking deep underwater when it comes to public support."

The remarks carry significant implications for energy markets. Data center electricity demand, driven overwhelmingly by AI workloads, has become one of the fastest-growing sources of power consumption globally, intensifying pressure on grids and, in many markets, extending the operational life of coal- and gas-fired generation.

Renewables surge

Against that backdrop, Stiell pointed to new data from the International Renewable Energy Agency showing global renewable capacity additions reached a record 693 gigawatts in 2024 — equivalent to more than half the entire installed power capacity of the US. Renewables overtook coal as the world's largest source of electricity generation last year, with clean energy investment exceeding $2 trillion, Stiell said.

"The shift to clean energy is now irreversible," he said.

But he warned the AI industry risks eroding those gains unless technology companies set credible climate targets, invest in energy efficiency, disclose their energy and water consumption, and commit to powering data centers exclusively with renewable energy. He noted that data center projects were already being put on hold across the US, from New York to Texas, as well as in other parts of the world, signaling growing regulatory and public resistance to unchecked AI energy consumption.

Stiell also acknowledged AI's potential to support climate solutions — including improving early warning systems for climate disasters and accelerating grid efficiency — but stressed these benefits needed to be accessible to developing countries rather than concentrated in wealthier nations.

"We need every country to benefit from AI today, not vague promises of future solutions," he said.

COP31 targets

Looking ahead to the UN Climate Change Conference in November, Stiell outlined the energy-focused Action Agenda targets set by the Turkish COP31 presidency in close coordination with Australia. Australia is the President of Negotiations for COP31, which means it is leading the official negotiations.

Chief among them is a goal for electricity to reach 35% of global energy use by 2035, a target which will impact power market investment, grid infrastructure and fossil fuel demand across both developed and emerging economies.

Stiell urged governments, business leaders and investors to arrive at COP31 with concrete solutions to accelerate implementation, particularly in developing countries where the energy transition remains uneven. He also pointed to the UN carbon market, formally known as the Paris Agreement Crediting Mechanism under Article 6.4, as a potential new channel for investment in clean energy projects in emerging markets.

On carbon dioxide removal, Stiell said the world could no longer afford to ignore the technology as a complement to fossil fuel phase-out, though he was explicit that CDR could never serve as a substitute for cutting emissions. "Transitioning away from fossil fuels can never be circumvented," he said.

Stiell also warned that fossil fuel dependence was already inflicting measurable economic damage, estimating that the ongoing Middle East conflict had added more than $100 billion in extra costs to US consumers alone through higher gasoline and diesel prices since it began.