AI role in climate resilience gaining greater significance
By Alberto Leny, July 19, 2025Urgent systemic transformation and a surge in climate and nature-related investments are needed in a rapidly changing world grappling with intensifying environmental crises.
Writing in the World Economic Forum (WEF) newsletter early this year, Lord Nicholas Stern, chair of the Grantham Research Institute on Climate Change and the Environment at the London School of Economics, and Mattia Romani, a visiting fellow at the Institute, stated that this transition requires significant investments.
“It requires at least US$4 trillion annually by 2030 globally, including US$2.4 trillion in emerging markets and developing economies (EMDEs), where investment flows are lowest and potential for leapfrogging traditional technologies is greatest. For example, Africa holds 60 per cent of the world’s best solar resources but received less than 2 per cent of clean energy investments in 2023,” they said.
Investment can boost productivity, create jobs and stimulate inclusive growth. Artificial Intelligence (AI) is uniquely positioned to accelerate this transformation by scaling innovation and driving profound systemic change.
Through collaboration between governments, technology, and the energy sector, AI has the potential to address climate challenges while fostering a more equitable and sustainable global future.
A rapid response to the urgency and scale of investment now necessary for sustainability will also drive recovery and strong, efficient and clean growth, full of new opportunities.
“Rather than being viewed as a cost, the net-zero transition can catalyse innovation, reduce inefficiencies, improve health, and stimulate inclusive growth.” Stern and Romani wrote in the article.
Reducing emissions
The five key impact areas of AI on climate transition are transforming complex systems, accelerating discovery and innovation, driving behavioural change, improving climate and policy modelling, and enhancing adaptation and resilience.
According to new research published last month in the Nature journal, advancements in AI in power, transport and food consumption could reduce global emissions of greenhouse gases by 3.2 to 5.4 billion tonnes of carbon dioxide equivalent annually by 2035.
In ‘Green and Intelligent, the Role of AI in the Climate Transition’, Stern and Romani conclude that, if AI is effectively applied in key impact areas, the estimated emissions reductions “would outweigh increases from global power consumption of data centres and AI”.
Estimations of power consumption are based on an assessment of all of AI’s activities, not just those related to decarbonisation.
“The world faces an unprecedented opportunity to leverage AI as a catalyst for the net-zero transition. Five impact areas AI can drive emissions reductions – transforming complex systems, innovating technology discovery and resource efficiency, nudging and behavioural change, modelling climate systems and policy interventions, and managing resilience and adaptation – provide a clear roadmap for harnessing AI’s potential.”
In the power sector, the authors find that AI can improve the efficiency of renewable energy systems by greatly improving grid management and increasing the load factor of solar photovoltaics and wind by as much as 20 per cent.
AI can also be used to better predict investment risks and returns, improving financial decisions where information is scarcer, particularly in emerging markets where perceived risk is high, often due to limited and asymmetric information.
“AI models can also be applied directly to better design and implement policies for climate action, by generating insights and predictions around complex climate policy scenarios or monitoring the effectiveness of policy implementation,” they note.
As climate-related disasters become more frequent and severe, the ability to forecast hazards and adapt to changing conditions will become increasingly critical.
AI is already improving early warning systems for extreme weather events, such as floods and wildfires, enabling governments and communities to take proactive measures to mitigate damage, saving both lives and significant costs.
The power, transport and food consumption sectors together are responsible for roughly 50 per cent of global emissions of greenhouse gases each year, and a corresponding fraction of world output.
These sectors are very interconnected, “so that accelerating the adoption and efficiency of low-carbon solutions, will no doubt trigger technological tipping points elsewhere, resulting in cascading effects across the economy”.
According to Stern, the world faces an unprecedented opportunity to leverage AI as a driver and catalyst to accelerate cuts in greenhouse gas emissions and the transition away from fossil fuels.
However, leaving markets alone to determine the applications and governance of AI could prove to be risky.
Romani, partner and head of sustainable finance at Systemiq, said: “Our research shows that with the right collaboration—between governments, tech companies, and energy providers—AI can be harnessed to accelerate climate action, not hinder it. By intentionally directing AI towards clean growth, adaptation, and resilience, we can ensure it delivers real benefits for people and the planet.”
Market forces alone are unlikely to drive AI’s application toward climate action. Governments, tech and energy companies must play an active role in ensuring AI is used intentionally, equitably and sustainably.
With the support of civil societies, governments should also act as stewards of equity, ensuring that the Global South benefits from AI’s transformative potential, rather than being left behind.
Without deliberate action, AI risks exacerbating global inequalities. The new opportunities and challenges from AI will reshape public policies, provide interactions and the role and functioning of the state.
AI presents a unique opportunity to manage the climate crisis and accelerate the transition to drive innovation, growth, and resilience. Its ability to enhance, optimise, and reinvent systems and accelerate discovery and innovation can help align the global economy with net-zero goals.
Government role
However, seizing this opportunity requires urgent, coordinated action from governments, businesses, and civil society working together and with markets.
Guided intentionally, AI can mitigate climate risks and build a more equitable and prosperous world.
The challenge is no longer whether AI can contribute to the net-zero transition, but decisive action to harness its transformative potential with sufficient purpose and urgency.
AI is being explored as a tool to both mitigate and adapt to climate change, but it also presents its own environmental challenges. The energy demands of AI systems, particularly data centres, are a concern.
AI in climate change mitigation and adaptation can optimise energy use, precision agriculture, early warning systems, ecosystem monitoring and renewable energy integration.
Environmental impacts include data centres that support AI applications requiring significant amounts of energy, often relying on fossil fuels, which contribute to greenhouse gas emissions.
The manufacturing and disposal of AI hardware can generate electronic waste, posing environmental risks, while AI development and deployment can consume substantial amounts of water and other resources.
AI-powered systems can also be used to spread misinformation about climate change, potentially hindering mitigation efforts.
Potential benefits of AI for climate action must be balanced with the need to mitigate its environmental impacts.
This requires greener AI by developing energy-efficient AI algorithms and promoting the use of renewable energy to power data centres.
It also requires responsible development in addressing ethical concerns related to data privacy, security, and the potential for AI to exacerbate existing inequalities.
It’s equally important to ensure transparency in the development and deployment of AI systems and hold developers accountable for their environmental impact, and foster collaboration between researchers, policymakers, and industry to develop sustainable AI solutions.