“Race to the bottom”: 40 city mayors join global pact to rein in surging data centre demand on power and water

“Race to the bottom”: 40 city mayors join global pact to rein in surging data centre demand on power and water

LONDON, June 23 — Mayors from 40 cities, including London, Phoenix and Melbourne, have agreed to collaborate on curbing the rising strain that rapid expansion of data centres is placing on electricity grids, water supplies and local communities, according to city leaders.

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LONDON, June 23 — Mayors from 40 cities, including London, Phoenix and Melbourne, have agreed to collaborate on curbing the rising strain that rapid expansion of data centres is placing on electricity grids, water supplies and local communities, according to city leaders.

The global increase in demand for computing power, largely driven by artificial intelligence, has fuelled trillions of dollars in investment in new facilities. This boom has also sparked opposition in countries including the United States, South Africa and Britain.

The Global Urban Data Centres Pact, set to be launched on Tuesday during London Climate Action Week, aims to establish guidelines to promote cleaner energy use, improve resource efficiency, and ensure better integration of data centres into urban planning. Mayors from Phoenix and Melbourne said the framework will also help guide permitting processes and negotiations with companies and governments.

Although implementation will vary according to local conditions—such as differing cooling requirements between regions like Iceland and Manila—the pact is intended to provide a common direction for cities.

Melbourne Lord Mayor Nicholas Reece said the city already hosts around 50 major data centres, which are expected to account for about 10 per cent of electricity demand by 2030 and up to 20 per cent by 2040 in a city of 5.5 million people.

He compared the rapid rise of data centres to the impact of air conditioning in the 1950s, noting that while air conditioning took decades to roll out, the current transformation is happening within just a few years.

Reece also warned that these facilities could consume up to 20 billion litres of water annually—around 4 per cent of Melbourne’s drinking supply—highlighting growing pressure on local resources.

He cautioned that investment in data centres is accelerating faster than regulation, raising concerns about a “race to the bottom” as governments compete to attract investment, sometimes at the expense of environmental oversight.

Phoenix Mayor Kate Gallego said the region already has 225 existing or planned data centres, with proposals that could double electricity demand. She noted that utilities once used to stable demand are now facing unprecedented growth driven by AI-related computing needs.

She added that this surge has triggered disputes over noise, land use, and safety risks linked to battery storage, as well as concerns about locating infrastructure in residential areas.

London Mayor Sadiq Khan said that while AI and digital infrastructure will be key to future urban prosperity, residents rightly expect such growth to be managed responsibly.

According to the World Economic Forum, data centres account for an estimated 2.5 to 3.7 per cent of global greenhouse gas emissions—more than the aviation sector—with electricity consumption rising faster than overall power demand.

Coordinated by C40 Cities, a global network of nearly 100 major cities focused on climate action, the pact also includes Barcelona, Chennai and Boise in the United States.

“In the race to become smart cities, we don’t want to harm the planet,” Reece said. — Reuters

File picture of an aerial view of an Amazon Web Services Data Center known as US East 1 in Ashburn, Virginia, October 20, 2025. Tech firms are floating the idea of building data centres in space and tapping into the sun’s energy to meet out-of-this-world power demands in a fierce artificial intelligence race. — Reuters pic

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