Data centers could actually be good for your hometown – Image for illustrative purposes only (Image credits: Pixabay)
Across the United States, communities face a surge in proposals for large data centers that power artificial intelligence systems. Spending on these facilities rose sharply from 2022 to 2025, prompting both support and resistance at the local level. Recent analyses show that at least 20 projects worth $41.7 billion were canceled in the first quarter of this year alone due to public concerns. Yet evidence indicates that well-regulated data centers can deliver measurable gains in employment and public finances for the towns that host them.
Environmental Effects Depend on Local Rules and Energy Sources
Data centers require substantial electricity and cooling, which can raise air pollution in areas that rely on natural gas or coal plants. Facilities with on-site turbines, such as one in Memphis, have increased nearby nitrogen dioxide levels by as much as 79 percent. In contrast, operations in regions with cleaner grids produce far lower emissions, with some running on non-carbon sources nearly 87 percent of the time.
Water use has drawn particular scrutiny, though modern closed-loop systems recycle most of the supply. National consumption by data centers remains small compared with other industries like agriculture or golf courses. In arid zones, projects often secure rights from existing users rather than expanding total demand, which can reduce net depletion when farms lose more water to evaporation.
Employment Gains Reach Beyond Temporary Construction Work
Once operational, data centers employ relatively few people directly. However, studies of 93 counties that received their first facility between 2008 and 2024 found private employment rose 4 to 5 percent over five or six years after controlling for other factors. Wages for both new and existing workers increased by 3 to 4 percent during the same period…