The AI Unraveling
The importance of building trust
Our investor Packy McCormick had a typically insightful blog post last week, in which he asked the question, “If technology is so great, why are so many people unhappy?” I recently described the experience of working with AI tools as akin to taking drugs. There’s an initial rush of euphoria, but once that wears off, and you can just make anything you want, you find yourself constantly chasing that initial euphoric high. On the other hand, as I write this, an army of sub-agents are building tools that I could only have dreamt of six months ago and the unlock that we are all witnessing is nothing short of astounding.
As someone who falls on the AI optimist side of things, I find myself defending against the more outrageous claims of the fear-mongers. But at the same time, there is a reality out there that validates much of the pushback. AI data centers are being approved under the cover of darkness; AI energy requirements are being bridged (if not fully embraced) by fossil fuel resources that at this late stage of the global warming arc we should be phasing out, not doubling down on; and regardless of whether or not energy bills are rising as a result of data centers, the very entities that are bending over backward to serve data centers are also the ones sending out monthly bills that pinch already extended family budgets.
Trust and AI
Society can be built around any number of forces, but the foundation of a free society is trust. Trust is earned through civic, political, and economic institutions that abide by received (often unwritten) rules and norms. Local controversies surrounding data centers, and the national mood souring on AI in general, point to a profound unraveling of institutional trust. Just this past week we saw a commencement speaker lustily booed by students at a Florida university - hardly known for its anti-establishment radicalism - for the singular sin of mentioning AI’s transformational impacts.
The convulsive reaction to AI suggests that institutional trust is severely eroded. When the data center comes to town, residents smell deception. When AI gets introduced at work, we all wonder if our job is next. When our inflated power bill comes at the end of the month, we assume that it’s these exotic forces of disruption that are profiting from our misfortune.
AI and the shadow of climate
When we started WattCarbon, our idealistic hope was that we could drive billions of dollars of investment into decarbonization projects by providing a more trustworthy pathway into climate action. The solution, we thought, was trust: more transparency, more granularity, and more traceability from the source to the sink. We thought that better measurement and verification and a system of record would eliminate much of the greenwashing and double-counting that had come to discredit much of the corporate climate movement. Instead, while that legacy system collapses under its own weight, we’re now in this Rumspringa of emissionsmaxxing in which there are essentially no repercussions for even the most egregious backsliding on previous commitments. As a case in point, the organization formerly known as the Clean Energy Buyers Association, but now rebranded as the Corporate Energy Buyers Association, recently announced that Exxon/Mobil would be the title sponsor of their annual conference. So much for idealism.
As we now watch utilities squirm under the spotlight, once again the question returns to trust. How can we be sure that we aren’t being taken for a ride when a deal is announced? How can we be sure that promises to mitigate consumer pain aren’t as empty as the climate commitments of the past decade? How can we be sure that the path followed is as good for the community as it is for shareholders?
There is no question that AI technology will continue be both a source of wonder and of ennui as we push the boundaries of what is possible and where the human fits into this technology equation. It is also likely that the combination of community pushback, power realities, and economies of scope will mean that the gargantuan data centers that have been the center of most public attention will give way to smaller, more decentralized homes for AI computers.
But the most important actor in the coming decade will be the utility. The utility sits at the intersection of failed climate goals and a perilous dystopian future and faces a deeply skeptical public. It’s not clear that utilities have prepared themselves for this moment, nor that they know how to build the type of trust that’s required. While they’ve wildly succeeded in making sure that the lights stay on, there’s no question that they’ve whiffed on the data center spectacle thus far.
Why we remain optimists
It might be misplaced idealism yet again, but I believe that bonds of trust can be rebuilt. For the same reasons that it seemed possible to turn corporate climate commitments into real investments into decarbonization projects, I believe that the energy investments required to power data centers, electric trucks, decarbonized industrial processes, and new factories can unlock billions in new capital for solar panels, batteries, heat pumps, and energy efficiency. The same community energy resources that would allow us to reduce the rate of global warming can also meet the energy needs of these new energy consumers. It’s not a tradeoff.
Trust comes in many forms, but to the extent that utilities default to community energy resources when developing their plans to power data centers, to the extent that these types of resources are prioritized when allocating capital and pushing for favorable rulings from regulatory bodies, and to the extent that we build transparency into these important decisions, we will take what is admittedly a very difficult moment in our history and make it possible to imagine an inclusively prosperous future for all of us. -MY
OpenEAC Alliance Meeting this Week
This Thursday the OpenEAC Alliance will celebrate its two year anniversary by digging into GridScore and CarbonScore metrics and launching a new methodology spec for smart thermostat load shifting. WattCarbon hosts OpenEAC Alliance meetings on a quarterly basis in an effort to build a community of M&V practitioners that share best practices for calculating hourly energy savings from demand-side energy resources. This is not an official standards body, but rather a way to go beyond the standard to build rigor into M&V processes so that we can build trust amongst all stakeholders.
