Data Centers Need Shared, Evidence-Based Solutions

What the data center boom means for everyday life—and for the companies building digital infrastructure—and how independent research can help both sides make better decisions. 

Internet-based technologies have until recently operated almost invisibly to most users. But accelerating demand for cloud computing and artificial intelligence has made the brick-and-mortar data centers that keep these technologies running a flashpoint for public conversation across America.  

Data centers require new buildings, new transmission lines, and more electricity and water than most other industrial customers. Communities are hearing big promises about jobs and tax revenue, while companies face rising expectations to show their projects are responsible neighbors. Neighbors are concerned about the potential for noise, air pollution, and bearing the costs associated with new power infrastructure. Everyone ends up asking a fair question: Will the benefits from having a data center in our community match the costs—and how will we know? 

Our team of experts in economics and environmental science at RTI International recently collaborated with a Duke University Sanford School of Public Policy graduate student team to examine this question. The team’s project points to policy and planning tools that can reduce conflict and improve outcomes. The big theme is simple: data centers are now essential infrastructure, and communities need clear information, enforceable commitments, and ongoing engagement. That’s where independent organizations like RTI can help by bringing credible measurement, evaluation, and community-informed analysis to decisions that are too often made with incomplete information.

Data centers have expanded rapidly as demand for data storage and processing has surged—first from the shift to cloud services, and more recently from AI workloads that require massive computing power. Data centers already account for a meaningful share of electricity use globally, and U.S. electricity demand from data centers is projected to grow sharply in the near term. This growth is happening faster than many regions can add new generation and grid capacity, which is why local infrastructure planning—and not just tech-sector planning—has become central to the data center conversation. 

1) Electricity Demand and Grid Capacity  

Data center operators often announce long-term goals like “100% renewable energy.” However, as an RTI analyst has noted, when a new data center comes online quickly, it often relies on whatever source is most available, including fossil fuels. For communities, the concern isn’t only climate change in the abstract. It can also be local air quality and health — especially if new power plants or frequent generator testing add pollution close to where people live. 

2) Water Use and Resource Planning  

Cooling data centers takes water, and so does generating the electricity they consume. U.S. data centers already use water at a scale comparable to millions of households, and demand is growing. A key concern is that many new facilities are being sited in water-stressed regions, where competition among households, agriculture, and industry is already intense. Companies are piloting less water-intensive cooling options—like closed-loop liquid cooling that recirculates water rather than evaporating it—and some are adopting “water-positive” commitments that aim to replenish more freshwater than a facility consumes. But practical questions remain: What will the actual, local water demand be? How will water usage be measured and related commitments be tracked? How will it impact local water supply and conditions? 

3) Waste Heat and Infrastructure Opportunities 

Nearly all the electricity a data center uses ultimately turns into heat. If that heat isn’t captured and reused, it can contribute to localized heat burdens and create additional cooling demand. Several European cities are building systems to route data center heat into district heating networks which distribute heat generated at a central location for residential and commercial uses. This infrastructure is uncommon in the U.S., outside of a few cities and large campuses, and there are fewer federal incentives or requirements to capture waste heat. Still, as data centers scale, waste heat is likely to become a bigger part of the planning conversation: is it simply a byproduct to manage, or a resource to put to work? 

Many communities pursue data centers for economic development, but the benefits can be uneven or short-lived. Data centers tend to add more jobs during the construction phase than during long-term operations, which are often highly automated. However, even a small number of jobs can be attractive to communities with little job growth, and data centers can contribute substantial local property tax revenue. At the same time, many states offer sizable tax exemptions to attract them, creating real tradeoffs for public budgets. 

Another community pain point is utility costs: if a utility must build new generation or upgrade transmission to serve large loads, who pays? Without thoughtful rate design and transparent agreements, there is a risk that residential ratepayers subsidize infrastructure built to serve data centers.

Responsible companies approach data center development by working to build support and trust in prospective communities while minimizing risk. Leaders in these communities, who may be new to dealing with data centers or technology companies in general, want to gather information and ask the right questions before negotiations begin.   

For example, communities are often asked to accept major infrastructure impacts without access to independently verified information. Companies may publish sustainability pledges and headline figures about jobs or investment, but facility-level data on historic and planned energy use, water consumption, emissions, or follow-through on economic commitments, and actual outcomes can be difficult to find. This data gap makes it harder for local governments to negotiate effectively, for regulators to design targeted policies, and for residents to judge whether the promised benefits justify the costs. 

A well-executed data center development strategy sets expectations for both sides. Based on a review of past projects, we recommend three building blocks for balancing public and private goals: 

1. Measure what matters with independent data: Communities get credible information to evaluate tradeoffs, and companies get a fair way to demonstrate progress on energy, water, emissions, and other impacts as time passes. 
2. Put commitments in writing and make them enforceable: Clear agreements can protect residents’ quality of life while protecting companies from shifting expectations by spelling out what success looks like. 
3. Understand sentiment early and revisit it: Ongoing engagement helps leaders target solutions where they are most needed and helps companies invest in the mitigation steps and community benefits that genuinely improve trust. 

RTI doesn’t permit or build data centers—but it can help reduce uncertainty and improve accountability. Here are practical ways an independent research partner can support better, less polarizing outcomes. 

• Independent measurement and verification: Help communities and companies agree on what to track (electricity load, water use, generator use, noise/light, traffic), set baselines, and share clear public reporting. Community benefit plans can stipulate that companies provide transparent measurement and reporting to track progress toward achieving public commitments. 
• Economic, social, and fiscal impact analysis: Estimate likely local benefits (construction vs. long-term jobs, tax revenue) and local costs (infrastructure upgrades, potential utility rate impacts). Consider ways companies can increase positive impacts, such as local hiring or purchasing clauses, and reduce negative impacts such as noise and air pollution. Agreements between data centers and communities can be crafted to translate community priorities into measurable, time-bound commitments —protecting residents while giving companies a clear, workable path for follow-through. 
• Provide robust, quantified water and energy assessments: For water, use a watershed approach to understanding the facility’s source water conditions and opportunities for mitigation of the water demands both within and outside of the facility fenceline. Identifying shared water challenges forms the basis of realistic, measurable replenishment activities or stewardship actions. For electricity, provide a utility-based assessment for existing and needed capacity for the facility power supply, clarifying potential challenges and/or upgrades that may alter current approaches or rates. 
• Community engagement and public opinion research: Design surveys, focus groups, and listening sessions to understand what residents value most and where concerns concentrate. Facilitate meetings between data center developers and local government leaders to review community feedback and catalyze these findings into decisions. 
• Policy and regulatory scanning: Compare approaches across states and internationally (including Europe’s growing focus on reporting and waste-heat reuse) to help anticipate future practices. 

Data centers can bring real benefits, especially through property tax revenue and targeted local investments, but they also create very real pressures on power systems, water supplies, environmental quality, community health, and public trust. The path to community acceptance is less about marketing and more about measurable performance, transparent reporting, and commitments that can be monitored and enforced. 

If you’re a local leader trying to evaluate a proposed project, or a company trying to earn long-term trust, an independent research partner can move the conversation from slogans to specifics. RTI can help stakeholders agree on the right questions, collect and verify the data needed to answer them, and evaluate whether mitigation strategies and community investments are delivering what was promised. This shared, evidence-based foundation can protect residents, reduce risk for developers, and better inform the tradeoffs and paths needed to build essential digital infrastructure.