I know the left hand of the government rarely speaks to the right hand but, surely, this example has to scream to someone. If I’m being kind it’s the outright contradiction it represents, if I’m being cynical it’s the connotations it has about greed and corruption.
I would, though, be so grateful if someone could please help make this make sense.
In the UK, households and businesses pay a range of Net Zero taxes, levies raised by the government to fund the legal requirement to be net zero (not emit carbon emissions via the production of energy). This means no more fossil fuel driven energy provision, for example, by 2050. Our electricity has to be from renewable sources or nuclear and gas is to be replaced by electric heat pumps, for example, in the production of heating for homes and businesses. There are a range of different Net Zero taxes rather than one overall one, including Vehicle Excise Duty, Fuel Duty for cars, Value Added Tax on energy, the new packaging tax, and direct tax on energy bills. Some of this tax is ringfenced into energy projects such as subsidising the installation of electric heat pumps and home insulation, but much of it enters the general pot of taxation. The fledgling Great British Energy (GB Energy) company the government has established is also funded by taxpayer’s money and is designed to invest in clean energy schemes such as offshore wind, green hydrogen and tidal power. It was set up with a budget of £8.3bn, is based in Aberdeen where historically employment and wealth has been driven through oil and gas exploration in the North Sea, and is an initiative of the Labour Government. While £1.2bn over the lifetime of the parliament (to 2029) will be generated from windfall taxes from oil and gas drilling in the North Sea, £7.1bn will be funded through ‘responsible borrowing’ which is repaid through general taxation. It isn’t immediately clear to me if this £8.3bn is a so-called revolving fund where the investments made are repaid over the cycle of the individual project.
To pay for the government’s 2050 ambitions, residents of the UK pay some of the highest energy taxes in the world leading to increased energy bills. When combined with the price increases caused by the Russian invasion of Ukraine and the Iran war, this has led to an increase in fuel poverty in the UK. Arrears owed to energy companies are at the highest ever levels with many people struggling to pay their electricity and gas bills and many experiencing hardship – and cold – as a result. It was the increase in energy bills in 2022 which started my financial difficulties with my monthly electricity bill doubling overnight. Combined with the fact our heating was oil-based, the costs were astronomical and we had to cease using it thereafter meaning we were very often cold in the winter. This is a reality for many people, and yet the taxes are not reduced (in fact, over time they will increase exponentially) because apparently at some point in the future, we will see a massive reduction thanks to the pain we are experiencing now. The levels of skepticism in the UK about this are huge because, frankly, none of these claims can be proven.
The current government in the UK does not have much of an economic strategy – in fact, it doesn’t have one at all – except that it will focus on AI. It’s a nebulous concept, really, with very little to back it up at all. When they first came to government they cancelled the previous government’s large innovation fund on the basis it was unaffordable. They could, however, find £26bn for a carbon capture project that essentially does what trees do already so they could actually just replace lost forest. But as we will see, there are very interesting reasons why this will not happen as far more environmentally friendly as that would be. The government has now created its own, smaller, innovation fund but why it couldn’t have left the original one where it was given it was created by people with actual experience of innovation, God alone only knows. This is where the skepticism comes in, writ large.
Many of the universities in the UK have been working on AI for some time along with other, better, innovations in other sectors such as medicine, engineering and the like. Innovations that do not threaten the very existence of humanity. And I’m not saying that in some Terminator-esque way that we’re all going to be blown to smithereens by a coordinated global nuclear attack (though that theoretically could happen), but because of the data centres that AI requires and the environmental disaster that they represent.
Remember, now, the residents of the UK are one of the highest taxed populations to get the net zero by 2050. Everything the government does is apparently focused on this target, so much so that the budgets for this exercise cannot be reduced to help fund the defence budget. Net zero is that important to this government that it trumps (no reference to certain US presidents here) the safety of the nation.
And yet.
The government is preparing to force through the creation of a data centre on farmland in an area just outside London. And not just any data centre but a massive hyperscale campus covering some 175 hectares with the data centre itself consuming 40 hectares creating 620-1,240 direct operational jobs. That’s roughly 7.1 jobs per hectare at a total build cost of £5.1bn which is just over £4m per job. An absolutely horrendous return for any government. If I’m generous and include the – again, generous – estimated 14,000 maximum jobs created during the construction phase, we are looking at £335k per job. The accepted rate by the government for a successful job:cost ratio is £50k so by the government’s usual rationale, no matter how you spin this one the ratio is appalling. So, from an economic growth potential it’s not looking great. But what about from an environmental perspective?
Data centres generally produce 860,000 tonnes of CO2 per year. That is the equivalent of the entire dairy industry in the UK. Or the emissions of the Stanlow Refinery in Cheshire. Over the next decade, AI data centres could produce 123 million tonnes of CO2 and this is without the emissions generated by the resources required to build them such as steel. The emissions come from the need to keep the data centres cool which leads to the next impact – water.
AI consumes immense amounts of water. On average, a 100-word email uses a bottle of water to produce. Hyperscale data centres as this one is will consume billions of litres of water per year. Close to an area of the UK where water is scarce, with less rainfall than the Sahara desert. There are already concerns about the levels of housebuilding in the East of England and their water requirements exceeding what is available – how do we serve a hyperscale data centre on our doorstep?
Then there is the heat that the data centres generate which is dumped into the air. 100% of the electricity used by the data centre is turned into waste heat. A hyperscale data centre can produce the equivalent waste heat as 25-35 thousand homes in a handful of buildings. That is over 2.5 to 3.5 times the number of houses that could be built on the land the data centre is earmarked for. And I haven’t even started on the noise pollution which can stretch to over a mile away. If we include the nearby areas of Upminster and South Ockendon as well as North Ockendon itself, that is nearly 50,000 people affected to varying degrees by the noise pollution. I have a personal point of interest here because I used to live in Upminster and on the border with North Ockendon over a period of around 20 years and still have close family members in the area.
So, each household will be paying in the coming years an additional £1,500 direct net zero taxation on their energy bills per annum and a significant indirect net zero taxation to get to net zero…yet the government wants to create a hyperscale data centre campus in a densely populated area that blows net zero targets out of the water. On farmland so threatening our food security, on land which could be a forest if farming is discounted and which could offset a lot of carbon emissions, or which could house up to 8,500 homes which are desperately needed in the UK and in that area. But, no. The government wants to create an energy and water guzzler creating almost 1 million tonnes of CO2 and consuming billions of litres of water per year. All for the sake of 1,240 direct jobs maximum. And this is just one such data centre. A further six, albeit smaller, AI data centres are planned just in England.
Think about the impact on this small island and then think about the impact of these data centres globally. Europe has just come out of the hottest heatwave on record, over 1,300 people it is estimated died as a result of it, and we are looking at going into another one from this weekend. The third this year so far and we’ve only just gone into summer. We know this is because of man-made climate change, we are told often enough by the very governments who seem to think that, somehow, these data centres and their emissions don’t apply. We have the European Commission going round in circles about Net Zero, creating ever more draconian rules, and yet there are planning 19 mid-size data centres across Europe – and this is without the private sector funded ones that aren’t included in these figures. The US is currently a lost cause with its President who refuses to admit that climate change is even a thing. At least there, the people are managing to create enough noise to stop some of them happening. But given how the tech bros are locked into the powerbase of the US, that is only a pause not a stop.
We are literally cooking ourselves. For what? AI? Why can’t we use the brains in our heads to write those emails? To create those images I’m seeing everywhere which are all the same. It has to be one of the scariest and most depressing things we are sleepwalking into. And we’re not making the links for ourselves enough so we are allowing governments and the tech giants to get away with it. While we blindly get cooked and pay for the priviledge.
Come on. Please. Is there anyone who can make this make sense? Because I know I can’t.
Louisa Simpson 