The race toward artificial intelligence has encountered a new regulatory hurdle: city councils. While governments and companies vie for billions in investments in data centers, forty cities have decided to set non-negotiable conditions regarding energy, water, and environmental impacts.
This is the essence of the Global Urban Data Centers Pact, launched on June 23 during London Climate Action Week and promoted by the international C40 Cities network. The pact stems from a reality that is now hard to ignore: the infrastructure that powers the digital economy is taking on an increasingly significant urban and environmental dimension.
The document defines data centers as “the backbone of the digital world,” but it also emphasizes that, without proper planning and clear standards, they can place significant strain on cities’ electricity and water consumption, urban temperatures, air quality, and energy costs.
The New Geography of AI Is Shaping Up in Cities
The growth of artificial intelligence is accelerating the construction of ever-larger facilities—known as hyperscalers—designed to handle enormous amounts of data and computing power.
In Melbourne, Mayor Nicholas Reece explained that about fifty large data centers are already in operation and that their share of electricity demand could reach 10% by 2030 and 20% by 2040. “Data centers represent the greatest impact on the power grid since the introduction of air conditioning in the 1950s,” he said.
Phoenix is also experiencing rapid growth: there are 225 facilities—both operational and planned—in the city and surrounding area, with projects that could double the demand for electricity.
According to the mayors, the problem does not lie in the presence of data centers per se, but in the way they are designed and integrated into local communities. The risk is that competition to attract investment will lead local governments to accept resource-intensive infrastructure without adequate environmental safeguards.
Energy, Water, and Land: The Terms of the Pact
The Pact identifies four guiding principles for managing the sector’s growth: integration into urban planning, sustainable use of resources, equitable distribution of infrastructure costs, and greater accountability to local communities.
Among the commitments outlined is the goal of moving beyond reliance on fossil fuels to power data centers, through new capacity from renewable sources and energy storage systems. The document also calls for high standards regarding water consumption, avoiding the use of non-renewable resources such as drinking water whenever possible, and encourages the recovery of heat generated by facilities for uses that benefit communities.
Another key issue concerns land use: cities are calling for new facilities to be located in a manner consistent with urban planning guidelines, giving priority to brownfield sites or areas that are already developed and minimizing the impact on residential neighborhoods.
The Issue of Public Consent
The issue also concerns the relationship between large-scale technological infrastructure and citizens. In the document, the proponents emphasize the need to make measurable data on sustainability and health impacts publicly available, to involve local communities in decision-making processes, and to ensure real economic benefits through local procurement and the creation of new skilled jobs.
This issue is set to grow. According to estimates cited in the international debate, data centers already account for a significant share of global emissions, and their demand for electricity is growing faster than overall energy consumption.
The challenge now is to determine whether the expansion of digital infrastructure will follow a model that respects cities’ environmental limits, or whether technological growth will impose its own conditions on local areas.
The Covenant of Mayors seeks to shift the focus of the discussion: not just how much computing capacity to build, but where, with what resources, and under what conditions.
