Forty mayors from cities on four continents have signed a landmark pact outlining the conditions under which they are willing to accept data centers for AI.
This is happening against the backdrop of urban authorities increasingly clashing with the industry, which they say overloads energy grids, depletes water supplies, and displaces housing development.
The pact, presented on Tuesday during Climate Action Week in London by the C40 Cities initiative — an alliance of nearly 100 cities working to combat climate change — establishes unified standards in the areas of clean energy, site selection, water use, and benefits for local communities.
This is the first coordinated attempt by urban authorities on a global scale to get ahead of the expansion of data centers before it completely overwhelms them.
The C40 network already hosts around 1,700 data centers, and 50 of them are expected to see growth in this sector of more than 40%.
From Phoenix to Melbourne
The idea for the pact arose after a conversation between the mayors of Phoenix and Melbourne, who discovered they were facing the same issues: data centers consume vast amounts of electricity and water and compete with housing developers for available land.
"We found that the problems in every region of the world are very similar," said C40 Managing Director Cassie Sutherland. "Our task was to ask: how can we use the collective voice of mayors to agree on the terms under which they are willing to accept data centers?"
Just the announced permit applications in the agglomeration, if all approved, would double the city's electricity consumption. According to Mayor Kate Gallego, the current wave of investment exacerbates climate change and does not provide adequate benefits to local residents.
"We understand the importance of these innovations; they create great jobs in our city," Gallego said. "We just want to make sure that everything is done right — for local residents and for the health of the planet."
In Melbourne, the situation is even more alarming. If the city implements all existing plans, data centers will consume up to 20 billion liters of water annually — about 4% of the total drinking resources, according to Lord Mayor Nicholas Reece.
The city's water supply is already under pressure from population growth, prolonged dry spells, and intensifying heat.
The standards are quite specific. Data centers must be built on abandoned or underutilized land, operate on renewable energy and battery systems, and be required to reduce water consumption, cut emissions, and capture excess heat.
They must create jobs for local residents, procure goods and services locally, self-fund infrastructure upgrades, and engage in meaningful dialogue with communities.
The mayors' capabilities are limited when they act alone. According to Sutherland, this concept needs to be enshrined in local norms and regulations — with the support of utilities, other levels of government, and the private sector.
About half of the 40 signatories are U.S. cities, including Seattle, Chicago, Miami, Phoenix, and Palo Alto.
The pact has also been signed by European cities from Greece, Spain, Italy, Germany, the United Kingdom, and Norway, as well as cities in Canada, Kenya, South Africa, Sierra Leone, Côte d'Ivoire, India, Australia, and Lebanon.
Notable Absence of Southeast Asian Cities
No city in Southeast Asia has joined the pact, although this region accounts for a quarter of global energy demand growth.
According to the Ember analytics center, there are already more than 2,000 data centers operating in Indonesia, Malaysia, Singapore, Thailand, Vietnam, and the Philippines.
The International Energy Agency predicts that in five years, the annual energy consumption of these facilities will more than double.
Malaysia has become particularly attractive for investments from Microsoft, Google, and Nvidia.
According to C40, several Southeast Asian cities have stated that they cannot sign the document due to national policies or other complexities, but negotiations are ongoing.
Data centers are drawn to cities because AI-based systems require near-instantaneous response times, making proximity to clients critically important.
They typically cluster together, forming urban ecosystems where economic benefits outweigh land costs. Only recently has this dynamic begun to push development into rural areas, notes Andrew Bettson, head of global data center market research at JLL.
The signatories of the pact hope that a united front will change the landscape. As Gallego expressed, without it, developers will simply seek out cities that are too weak to demand higher standards.
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