Mayors from London to Melbourne to sign data centre pact

Mayors from 40 cities, including London, Phoenix and Melbourne, are set to sign the Global Urban Data Centres Pact, aiming to address the growing strain of data centres on energy grids, water supplies and communities, according to city leaders. The agreement, to be launched at London Climate Action Week, seeks to establish standards for clean energy use and resource efficiency in data centre operations, with rules tailored to local conditions such as cooling needs in Iceland versus Manila.

The pact follows a surge in global demand for computing power, driven largely by artificial intelligence, which has spurred trillions of dollars in investments and sparked protests in nations ranging from the U.S. to South Africa. Data centres currently account for 2.5% to 3.7% of global greenhouse gas emissions, according to the World Economic Forum, exceeding aviation’s footprint and outpacing overall power consumption growth.

Melbourne Lord Mayor Nicholas Reece highlighted that 50 major data centres in the city could consume 10% of local power demand by 2030 and 20% by 2040, with annual water usage equivalent to 4% of the city’s drinking supply. Phoenix Mayor Kate Gallego noted the city’s 225 existing or planned data centres could double electricity demand, straining utilities that previously managed decades of steady growth.

“Data centres are the biggest thing to hit the energy grid since air conditioning in the 1950s… this is happening in a few short years,” Reece said. He warned of a “race to the bottom” as cities compete to attract investment, sometimes bypassing environmental safeguards. London Mayor Sadiq Khan emphasized the need for responsible management of AI-driven infrastructure growth, stating residents expect “growth to be managed responsibly.”

The initiative, coordinated by C40 Cities, includes Barcelona, Chennai and Boise, Idaho. While the pact does not impose mandatory regulations, it provides a template for cities to guide permitting, negotiations and planning. Mayors emphasized that local adaptation will be key, given disparities in climate and infrastructure needs.

What happens next remains uncertain. The pact could set a precedent for global cooperation on data centre sustainability, but cities may face pressure from tech firms seeking favorable conditions. Analysts suggest that without coordinated enforcement, the agreement’s impact may vary widely, depending on local priorities and regulatory capacity.

As AI continues to reshape urban economies, the tension between innovation and sustainability will likely intensify. The pact’s ability to harmonize these interests could determine the future of smart city development.

What is the Global Urban Data Centres Pact?

The agreement, signed by mayors from 40 cities, aims to limit the environmental and infrastructural strain of data centres by promoting clean energy use, resource efficiency and integration into urban planning. It allows for local adaptations, such as varying cooling requirements in different climates.

Why are data centres a growing concern?

Data centres consume significant energy and water, contributing to 2.5% to 3.7% of global greenhouse gas emissions. Their rapid expansion, fueled by AI demand, has outpaced regulatory frameworks, leading to disputes over electricity use, land access and community impacts.

How might the pact affect future data centre development?

The framework could influence permitting and negotiations, but its effectiveness depends on local implementation. Cities may face challenges balancing investment incentives with environmental protections, particularly as tech companies seek regions with lax regulations.

Could coordinated global standards reshape the data centre industry’s environmental impact?