Executive Summary
Artificial intelligence is becoming a foundational capability for service delivery, industrial upgrading, and public-sector modernization. For the Arab region, the transition to AI-intensive economies intersects with three structural realities: (i) electricity systems already under pressure from demand growth and high cooling loads; (ii) chronic water scarcity and exposure to heat and drought; and (iii) uneven digital infrastructure and governance capacity across Arab countries. These conditions make the environmental footprint of AI (energy, water, materials, and e-waste) a policy-relevant issue, while also increasing the value of AI as an enabling tool for addressing the region’s pressing development challenges and fulfilling international commitments.
Evidence indicates that the resource trajectory is steep. Data-centre electricity consumption has grown rapidly in recent years, driven by cloud and AI workloads, while corporate operational emissions linked to AI expansion have increased in several leading firms. Water demands are also increasingly remarkable. AI model development and deployment rely on cooling and electricity generation systems that can create direct and indirect water footprints, with emerging estimates suggesting that global AI-related water withdrawals may rise substantially in the near term. These dynamics are especially policy-relevant for the Arab countries where marginal water withdrawals are contested and where peak electricity demand is dominated by cooling.
The core finding is that the Arab region can manage AI’s footprint while scaling benefits through technological leapfrogging and a stronger science-policy interface. This entails (1) standardized sustainability metrics and reporting for AI and data centres; (2) embedding Integrated Water Resources Management (IWRM) principles in cooling water governance; (3) circular-economy approaches to ICT equipment and e-waste; and (4) narrowing the “AI divide” through regional cooperation on compute access, skills, and participation in standards and governance. And while the Middle East is on a rapid data-centre expansion path, Sub-Saharan Africa remains far lower on a per-capita basis but is attracting renewable-linked data-centre investments in select hubs. Southeast Asia demonstrates how water and power constraints can quickly become licensing issues, prompting sustainability-linked roadmaps and tighter planning requirements. These comparisons reinforce a practical lesson for the Arab region: sustainability criteria must be built into planning and permitting now, before lock-in occurs.
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