Systemiq and London School of Economics: how AI could cut global emissions by up to 5.4 billion tons

Artificial intelligence could become a powerful ally in the global climate fight – if it’s used wisely. That’s the key takeaway from new research by Systemiq and the Grantham Research Institute on Climate Change and the Environment, published in npj Climate Action. The study outlines how targeted deployment of AI across the power, transport and food sectors could drive annual emissions reductions of 3.2 to 5.4 billion tons of carbon-dioxide-equivalent (GtCO₂e) by 2035.

Together, these three sectors account for around half of all global greenhouse gas emissions. The study argues that applying AI to accelerate low-carbon transitions across them could outweigh the technology’s own energy footprint, including that of energy-hungry data centers and infrastructure. Researchers describe this as a unique window of opportunity to align 'capital, code and carbon' to support net-zero goals.

The findings arrive as global climate policy remains uncertain and public concern about AI continues to grow. In that context, the report offers a more measured and evidence-based contribution to the debate, suggesting AI could play a significant role in bending the emissions curve – if deployed responsibly.

Mattia Romani, Partner & Head of Sustainable Finance at Systemiq and a Senior Visiting Fellow at the Grantham Research Institute at LSE, emphasized the importance of coordinated action. “Our research shows that with the right collaboration – between governments, tech companies, and energy providers – AI can be harnessed to accelerate climate action, not hinder it,” he said. “By intentionally directing AI towards clean growth, adaptation, and resilience, we can ensure it delivers real benefits for people and the planet.”

The study groups AI’s climate impact into five core functions: improving complex systems, speeding up innovation, encouraging behavioral change, shaping more effective policy, and enhancing resilience and adaptation. In the power sector, AI tools could increase the output of wind and solar installations by as much as 20% through better grid forecasting and management. In transport, AI could help optimize logistics, encourage modal shifts and improve vehicle efficiency. And in the food system, it could accelerate the uptake of alternative proteins and reduce food waste through smarter planning and decision-making.

AI also has a role to play in mobilizing climate finance particularly in regions where clean investment is most urgently needed. Algorithms can help fill information gaps, allowing investors to assess risk more accurately in low-data environments. This could make low-carbon projects in emerging markets more attractive and financially viable.

Nicholas Stern, Chair of the Grantham Research Institute at the London School of Economics and Political Science, underlined the need for international cooperation. “Artificial Intelligence holds transformative potential to accelerate the climate transition in emerging and developing economies – helping to unlock investment, reduce risk, and leapfrog outdated infrastructure,” he said. “Yet realizing this promise requires targeted public investment, shared data, and equitable access to AI capabilities to ensure no country is left behind in the net-zero transition.”

But the researchers are clear: this future won’t emerge on its own. Without strategic direction, strong public policy and governance frameworks, the commercial pull of AI risks favoring less socially productive uses. Stern warned that “without active public policy, the commercial incentives to apply AI in the socially productive areas described may be weak relative to application in influencing consensus demand, which may be somewhat less socially useful.”

As attention turns to COP30 and the world takes stock of progress since the Paris Agreement, this report adds to a shifting narrative around climate action. Rather than focusing solely on the risks and costs, it points to intelligent, actionable solutions – provided governments and industry move fast to align AI’s trajectory with the climate imperative.