AI has the potential to raise the average pace of annual global economic growth according to scenarios in our recent analysis, included in the IMF’s April 2025 World Economic Outlook.
AI, however, needs more and more electricity for the data centers that make it possible. The resulting strain on power grids has major implications for global electricity demand.
The world’s data centers consumed as much as 500 terawatt-hours of electricity in 2023, according to the most recent full-year estimate by the Organization of the Petroleum Exporting Countries. That total, which was more than double the annual levels from 2015-19, could triple to 1,500 terawatt-hours by 2030, OPEC projects.
As the Chart of the Week shows, electricity used by data centers alone, already as much as that of Germany or France, would by 2030 be comparable to that of India, third world’s largest electricity user. This would also leapfrog over the projected consumption by electric vehicles, using 1.5 times as much power than EVs by the decade’s end.
The boom in building new warehouses for data stored in the cloud and answering AI queries underscores the urgency for policymakers, who need effective energy strategies to ensure adequate supplies can meet surging demands.
Increasing electricity demand from the technology sector will stimulate overall supply, which, if responsive enough, will lead to only a small increase in power prices. More sluggish supply responses, however, will spur much steeper cost increases that hurt consumers and businesses and possibly curb growth of the AI industry itself.
Under current energy policies, the AI-driven rise in electricity demand could add 1.7 gigatons in global greenhouse gas emissions between 2025 and 2030, about as much as Italy’s energy-related emissions over a five-year period.
Demand for computing and electricity from AI platforms is subject to wide uncertainty. Efficient, open-source AI models like DeepSeek lower computing costs and electricity demand. However, reduced costs increase AI usage, and more energy-intensive reasoning models raise electricity demand.
Artificial intelligence in agriculture is changing the way farmers farm
CRA MEDIA View
Agriculture has always been the backbone of human civilization, evolving from hand tools to mechanized tractors. Today, artificial intelligence (AI) is poised to revolutionize farming, promising to make it more efficient, sustainable, and less labor-intensive. By leveraging AI technologies like machine learning, predictive analytics, and robotics, farmers can address challenges such as labor shortages, climate change, and growing global food demand.
AI-powered precision farming uses data from sensors, drones, and satellites to monitor soil health, crop conditions, and weather patterns in real time. For example, tools like Microsoft’s FarmVibes.AI provide soil and yield maps, helping farmers decide when to plant, irrigate, or fertilize. This reduces resource waste and boosts crop yields by up to 30%, according to some estimates.
Autonomous tractors, harvesters, and drones are reducing the need for manual labor. Companies like John Deere use AI for precision planting, ensuring optimal seed placement, while robotic harvesters identify ripe produce with computer vision, minimizing crop damage. These technologies address labor shortages, especially in regions like the U.S., where the average farmer is 60 years old.
AI-driven systems, such as Taranis, analyze high-resolution images to detect pests, diseases, or nutrient deficiencies with 95% accuracy. Drones equipped with thermal imagery can spot infestations early, allowing targeted pesticide application that cuts chemical use by up to 20%. This not only saves costs but also reduces environmental impact.
AI optimizes water use by analyzing soil moisture and weather data. Smart irrigation systems can reduce water consumption by 25%, critical in water-scarce regions. Similarly, AI ensures precise application of fertilizers, minimizing runoff and enhancing sustainability.
AI forecasts weather, crop yields, and market trends, enabling better decision-making. For instance, the Climate Corporation’s Climate FieldView platform uses AI to predict optimal planting and fertilization schedules, reducing risks and increasing profitability. Farmers can also use AI to negotiate better prices based on yield forecasts
There’s an assumption in the agricultural industry that the yields and prices of crops will vary according to local conditions as well as supply and demand in local and international markets. As a result, farmers understand that not every year will be profitable but over the long run, all things being equal, the good years should outnumber the bad.
But is climate variability and risk changing?
The answer is yes. Scientific evidence which has become more robust over the past decade points increasingly to this reality.
So, what is changing and what can be done about it?
Climate risk and climate resilience both need to be considered. If climate risk is increasing, resilience must be built up through measured and effective responses.
The most important climate change risk is increased temperature. This affects rainfall and seasonal patterns on a global scale. It also affects plants’ phenological growth (phases in the plant’s development which require certain thresholds of sunlight, heat and moisture) and physical growth, as well as animal growth and exposure to pests and diseases. Ultimately it contributes directly to yield.
Temperatures are increasing in southern Africa faster than the worldwide average. The region has seen rises of up to 1⁰C over the past 100 years. This doesn’t sound like much. But it’s averaged over an annual cycle and some individual stations have had daily temperatures increase by 3⁰C-4⁰C since records began in the mid 20th century.
Rainfall patterns are very hard to analyse, as the trends are rarely statistically significant. The average rainfall may not be changing. But there have been longer dry spells on top of which higher temperatures have led to increased evaporation. This has reduced the available water.
Future projections point to temperature increases of between 2⁰C and 5⁰C by 2100 (compared to pre-industrial temperatures). This depends on the future carbon emission pathway but we have seen no real reduction in the rate of increase in CO₂ emissions and thus expect the worst over the short to medium term.
Rainfall projections are loaded with uncertainty, but show broadly that the tropical and sub-tropical regions may experience more rainfall and Mediterranean regions may become drier.
The global AI in agriculture market is projected to grow from $1.7 billion in 2023 to $4.7 billion by 2028, reflecting its transformative potential. Innovations like AI-powered vertical farms, which grow crops without soil or sunlight, and generative AI for crop breeding could further revolutionize the industry.
AI is undeniably making farming better and easier by boosting yields, reducing costs, and promoting sustainability. It eases labor burdens through automation and empowers farmers with data-driven insights. However, challenges like cost, accessibility, and ethical concerns must be addressed to ensure equitable benefits. As AI continues to evolve, it holds the promise of feeding a growing global population while preserving the planet—if implemented thoughtfully. Farmers, tech developers, and policymakers must collaborate to harness AI’s potential, ensuring agriculture remains resilient and sustainable for generations to come.
DISCLAIMER
The views and opinions expressed in this program are those of the writers and do not necessarily reflect the views or positions of any entities they represent. The information contained in this website is for general information purposes only. The information is provided by CRA and while we endeavour to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.
