Investing.com – Morgan Stanley has taken a look at the cumulative global carbon footprint through 2030, and sees this creating a large market for decarbonization solutions as several cloud hyperscalers look to meet their carbon neutrality goals.
The global construction of Data Centers (DCs) through 2030 combined with their electricity needs will equal over 40% of a single year of US greenhouse gas emissions (GHG), the US bank said, in a note dated Sept. 2, around 2.5 billion tonnes of CO2-equivalent.
“We forecast global GHG emissions from DCs rising from ~200 million tonnes of CO2-equivalent in 2024 to ~600 Mt CO2-equivalent in 2030 — 3x higher emissions in 2030 over a scenario in which no GenAI construction existed,” the bank said.
“We think the magnitude of GHG emissions is greater than appreciated, as well as the share of embodied carbon at ~40%, and will drive large growth opportunities for DC ‘decarbonization solutions’ business models,” the bank said, pointing to clean power; energy efficient equipment; green materials; carbon capture, utilization, and sequestration; and carbon dioxide removal solutions.
The bank sees reforestation projects as key beneficiaries of the ambitious hyperscalers’ 2030 net-zero targets due to the constrained supply of tech-based carbon removals.
It’s unlikely that governments will look to limit DC development given the numerous benefits associated with the pursue of GenAI, including broad economic efficiencies, drug discovery, potential decarbonization benefits longer term via efficiencies in complex systems such as cities and transportation, impacts to behavior change by providing more sustainable solutions for customers, and the discovery of new technologies, among others.
“This underscores the importance of DC decarbonization solutions,” Morgan Stanley added.
