Data Centers as a New Industrial Shock: Local Resource Reallocation and Climate Implications

Investigators

• J. Frank Li, Accounting and Information Systems Division

Background

The rapid rise of cloud computing and artificial intelligence has fueled explosive growth in data center construction worldwide. These facilities require vast amounts of electricity, cooling, land, and grid capacity, creating concentrated environmental and economic pressures for the regions that host them. Although data centers can stimulate local investment and job creation, their resource demands may also strain infrastructure and exacerbate carbon emissions. Understanding how data center entry reshapes local economies and environmental systems is critical as digital infrastructure becomes a dominant force in global industrial development.

Research Objectives

This project aims to analyze how the establishment and expansion of data centers reallocate local resources and affect regional economic and climate outcomes. It will examine changes in employment, electricity consumption, water use, land competition, and marginal emissions following data center investments. The findings will inform policymakers on how to balance technological growth with sustainable resource management and climate goals.