Scaling Laws: Facts & Myths About AI's Energy Usage with Gavin McCormick

[Intro]

Alan Z. Rozenshtein: It's the Lawfare Podcast. I'm Alan Rozenshtein, associate professor of law at the University of Minnesota and a senior editor and research director at Lawfare. Today, we're bringing you something a little different, an episode from our new podcast series, Scaling Laws. It's a creation of Lawfare and the University of Texas School of Law, where we're tackling the most important AI and policy questions, from new legislation on Capitol Hill to the latest breakthroughs that are happening in the labs.

We cut through the hype to get you up to speed on the rules, standards, and ideas shaping the future of this pivotal technology. If you enjoy this episode, you can find and subscribe to Scaling Laws wherever you get your podcasts and follow us on X and Bluesky. Thanks for listening.

When the AI overlords take over, what are you most excited about?

Kevin Frazier: It's not crazy. It's just smart.

Alan Z. Rozenshtein: I think just this year, in the first six months, there have been something like a thousand laws.

Kevin Frazier: Who's actually building the scaffolding around how it's gonna work, how everyday folks are gonna use it?

Alan Z. Rozenshtein: AI only works if society lets it work.

Kevin Frazier: There are so many questions have to be figured out and-

Alan Z. Rozenshtein: Nobody came to my bonus class.

Kevin Frazier: Let's enforce the rules of the road.

Welcome back to Scaling Laws, the podcast brought to you by Lawfare and the University of Texas School of Law that explores the intersection of AI, policy, and of course, the law. I'm Kevin Frazier, the AI innovation and law fellow at Texas Law and a senior editor at Lawfare. Today, we're looking at how AI is being used as a tool for global emissions accountability.

Our guest is Gavin McCormick of Climate TRACE. Gavin has spent his career at the forefront of climate tech, moving from environmental advocacy to leading a coalition of tech companies and NGOs that uses satellite imagery and advanced AI to track human cause emissions with unprecedented precision. From the halls of environmental summits to the server rooms where these algorithms are built, Gavin's work allows for a verifiable and real-time inquiry into who is emitting, where, and how much.

It's an especially timely development given that a number of environmental concerns have arisen from America's AI build out. Stay tuned as we suss out reality from myth and get to the heart of some of the open questions around the environmental ramifications of AI development. Giddy up for a great show and be sure to follow us on X and Bluesky.

[Main Podcast]

Gavin, welcome to Scaling Laws.

Gavin McCormick: Thanks. It's good to be here.

Kevin Frazier: Gavin, when most folks think about AI, oftentimes you hear them raise environmental concerns, “Hey, it's using a lot of water. Hey, it's using a lot of power.” And oftentimes when you talk to folks in environmental communities, you hear, “I don't use AI,” or, “I only use AI when it's truly necessary,” and “God forbid I ever say please or thank you to AI. That's something I'll never do because it's bad for the planet.”

I was so excited to hear you speak at the Ashby workshops hosted by Fathom because you cut through all of those paradigms while being someone who is very much staunchly in the environmental community. So for the folks who haven't had the pleasure of meeting you and learning about your work, who the heck are you and what the heck are you doing both at what time and then with Climate TRACE?

And we can break this down into a few subparts.

Gavin McCormick: Yeah, thanks. So, I mean, it's so interesting, right? I think the key message I have about AI before I get any further is sometimes it's helpful for the environment, sometimes it's harmful for the environment. It matters, what are you using for it for?

How are you doing it? It's not all good or bad.

Kevin Frazier: It's like, it says if AI is a tool that has good and bad use cases.

Gavin McCormick: Yeah.

Kevin Frazier: Whoa!

Gavin McCormick: And, you know, I got my start in this space with a different tool that people thought was 100% good for the environment that turned out to be actually often not good for the environment.

So sort of the flip version of this story. So a lot of people know this story that renewable energy is of course necessary for being climate change, but sun doesn't always shine, wind doesn't always blow, so you need some kind of batteries to store the energy. A lot of people assume that means that batteries are always good for the environment.

I was a PhD student at UC Berkeley when some new research was coming out that said, “Actually, 90% of batteries are increasing pollution, not decreasing pollution.” What's going on there? It turns out that what happened is people were deploying large numbers of batteries without asking, “What time should we charge those batteries?”

Turns out batteries only help the environment if you charge at the time that's good for the environment. If you charge at the time that's bad for the environment, you just helped out coal plants instead. And so I was involved in some research saying, “What time do you need to charge to be on the pro-environment team, so the anti-environment team?”

Kevin Frazier: Yeah, to pause for one second for the folks who like me love to ask dumb questions. So this is basically getting to the point that our grid can only handle so much power. And so if you're charging that battery at the wrong time, you're really straining the grid and not doing the world a favor, and in fact, leading to deleterious outcomes.

Gavin McCormick: Yeah. The way I like to think about it is there was a very concerted information campaign effort by electric utilities that kind of like predates a lot of the AI campaigns to convince everybody that the best thing for the environment was to do whatever was most profitable for the electric utilities. So—

Kevin Frazier: Wow. Who could have seen that—

Gavin McCormick: Who could have seen that coming? So the whole notion that it's somehow good for the environment to use energy at off peak times and that you wanna not use it when it’s peak, that's true if you're talking money. It's not always true for environment. A different way to think about the problem is to say, “If I use energy from the power grid at this time, what power plants are gonna turn on or off?”

And so it turns out that research was coming out of that right about 2012 and long story short, I was the grad student assigned to go actually operationalize some of those algorithms. And so, we just for fun on a weekend hit upon this idea that a few people from Google and Facebook and met at a party and were like, “What if we just put this on the internet?

What if we just made it possible for anybody to know what time do you have to use energy for it to be cleaner or dirtier?” And we hit upon this idea that in addition to charging batteries at the right time, you could use your dishwasher at the time that is good for the environment, that would mean it's running on clean renewable energy.

You could not charge your electric vehicle at the time that means you're gonna a bunch of coal plants. So I got involved in this interesting intersection of software and science and kind of telling the truth about environment where we stood up this nonprofit that had a budget of zero dollars. It was just like, “Hey guys, everybody should be able to see the best science on what's really true, putting aside all the corporate claims about if you do this or that, how is it gonna affect emissions?”

Kevin Frazier: This is the most lovely Bay Area story I've heard in a while. A bunch of smart people walk into a house party and say, “Let's use the internet to expose a bunch of information and make people smarter.” I love it.

Gavin McCormick: This is our concept of fun.

Kevin Frazier: This is—Yeah. I will say, I don't know, Gavin, if I'm ever gonna ask you if you're hosting a party because I just—

I think we may have different conceptions of fun. Yeah. But with that in mind, before we get into some of your more recent work, what I want to establish early on is just this trend of people's first response to a new technology—

Gavin McCormick: Yeah.

Kevin Frazier: being the one that really anchors them, because here, as you noted, it's like batteries are here, they save the world, that's all they do, period.

And then electricity companies saying, “Hey, we have this new paradigm. This is the way the world works, period.” Don't look fine, don't ask me more. And we're supposed to be done with this. Yeah, right? Like we found out the sun wasn't the center of the universe, but why is it, what is this temptation even among folks in the environmental community, you know, scientists, empirically driven?

Gavin McCormick: Yeah. Yeah.

Kevin Frazier: What is it that leads to that kind of gut reaction, that anchoring effect?

Gavin McCormick: I think part of it is just like, “Hey, the world's a complicated place. Like, we need to, we need…” It takes some time to figure out exactly under which conditions our technology is good and bad, and that one makes sense to me.

The other thing I think is about incentives, like, nobody ever got money to found a tech startup where they said, “Will this make the world a worse place? It's complicated, further research is needed.” You gotta say—

Kevin Frazier: That, yeah, I think that pitch fails nine—Nine times outta 10.

Gavin McCormick: Totally. And nobody ever raises money as a nonprofit to say, “Is this thing bad for the environment?”

Eh, it's probably fine, but it's a bit complicated for the research is needed. So you got a world where some people gotta say that everything is good, and some people gotta say that everything's bad. There's very few institutions that actually are able to sort of be neutral. Everybody thinks it's universities, but a lot of universities, they need to have the answer be it's complicated for funding.

And what we found at WattTime is that there's very few people who can just be like, “Oh, this one's good and this one's bad. End of story, no further research needed.” That's not a thing.

Kevin Frazier: Yeah. And it takes folks a little bit more time to get into that nuance. You have to sit down, you have to have an actual conversation- Yep.

because it's not the sort of thing that gets covered by the New York Times, right? You're not gonna read five paragraphs down into this, you know, huge story and suddenly realize, “Oh, I'm gonna change my mind. I've seen the stars. Everything has become clear now.” And sometimes, to your point too, Gavin, you have to sit with that uncomfortable truth because I know folks—

And I'm sure you know folks who they buy that battery, they buy that Tesla and they think, “That's it. I'm the world's greatest environmentalist, you know, mic drop, give me a ring, Al Gore. I'll take your prize now.” And they don't want to acknowledge the fact that it's not always that clear cut.

Gavin McCormick: We get actually more hate mail from people who thought they were environmentalists and we published a study saying that actually it was wrong than we do from fossil fuel companies. And I'm like, “I'm sympathetic. It's not fun to learn that you brought, you were the good guy and you messed up.”

Kevin Frazier: And so for folks who are thinking, “Oh my gosh, my whole life has been exposed right now. Who the heck is this Gavin guy? I need to, you know, go research him frequently.”

Gavin McCormick: Oh, man.

Kevin Frazier: So tell us a little bit more about the kind of validity and the rigor of the science you're doing in terms of having this measuring of how the grid's being used and thinking through how you know, you are actually contesting the status quo in a way that is verifiable and reliable.

Gavin McCormick: Totally. So, you know, this all started with UC Berkeley research. My innovation was just like, “Hey, everybody should get to see this research.” So this is really Meredith Fowlie’s research more than mine. Ines Azevedo at Carnegie Mellon, now Stanford kind of started doing the same research. So a lot of that started trending.

I think this got serious when the state of California got involved. So there was a study that came out that said 90% of batteries in America probably making emissions worse, not better. And all you would need to do is take those same batteries and charge them at a different time. And the state of California had recently established the nation's most generous subsidy for energy storage because it's supposed to be helping the environment.

But the law said, “Yeah, but it has to actually help the environment or you don't get the subsidy.” So it was actually really interesting. The government had to get involved to answer, well, which batteries are good for the environment and which ones aren't. I was predicting years of bureaucratic infighting.

I was all prepared for a very slow government story. It was not like that. What they did was really interesting. They convened a group of the 40 largest companies, NGOs, and universities thinking about this issue and said, “If you guys can all reach consensus, if you guys can in a serious timeframe, figure out a serious answer for how do we know what's good for the environment, what's bad for the environment, we'll go with that.

And lo and behold, after a whole lot of meetings 40 members of the working group reached perfect consensus. I was blown away. It took a few months.

Kevin Frazier: Wow. That, that where is the biopic on this miracle that happened in California?

Gavin McCormick: Yeah. I mean, I gotta say, I, I was pretty impressed with the California Public Utilities Commission.

They did well. It was not a coincidence. They did a lot of listening. They did a lot of, like, calling “BS” when people were making stuff up but listening when consensus is trending. And so there's been so much research since then, but I think the key point is there is scientific consensus on how you figure out use electricity this time or that time, what happens to emissions?

And now we live in a world where instead of that being kind of unknowable, that's a crazy new type of data that people deliver used to have. Think about you, you plug in a laptop, you flip a light switch. It's not like it's labeled with you cause as much emissions, but now we know.

Kevin Frazier: And what I love about this whole thing is that none of this would have happened, number one, without a means to measure, right?

Yep. We have to make sure there's actual mechanisms in place for us to have that data, receive that data. But then, and here's where I'll scream from the mountaintops, sorry listeners, for me yet again climbing up on my soapbox, having outcome-oriented legislation. By virtue of saying this law has to actually achieve its intended outcome—

We had this conversation, but that miracle would not have been possible if it was just more Californians should buy batteries full stop.

Gavin McCormick: Yeah. And you know, I think I was so impressed because they went in with a theory and they admitted that theory was wrong. They had a theory that more batteries is good and then when they realized that they had been a mistaken, they said the law does have an outcome.

This must benefit the environment. What do we have to do to achieve the outcome? And it was remarkable to see.

Kevin Frazier: And so you proved this model in terms of just hanging out with a bunch of folks in San Francisco, saying we need radical transparency, gathering that data, making it available, you prove that with what time.

And in case folks haven't picked up, when we're saying WattTime, it's W-A-T-T just for—

Gavin McCormick: WattTime

Kevin Frazier: to use power— WattTime, yes. And then you thought, huh, that worked out pretty well. We changed California policy.

Gavin McCormick: Yeah.

Kevin Frazier: How did you create Climate TRACE and what is Climate TRACE?

Gavin McCormick: So I think before I can get into the story of Climate TRACE, I need to share one surprising next step that happened with the California story.

What was so surprising is that people have this paradigm in their head that when the government mandates you have to do something better for the environment, it's hard, it's expensive, it's painful, we're sacrificing something. The crazy discovery of this working group is that it wasn't any more expensive to do it right than to do it wrong.

And so what started happening is that although only one state mandated this, we started hearing from more and more energy storage companies, “Hey, can we voluntarily do the same thing in Massachusetts, in Missouri, in New York?” We said, “Yep, here's the equivalent data.” Then we started hearing from people in China, in Italy.

They said, “What, do we have the equivalent data?” And we said, “Call your version of the EPA.” And we started hearing, actually, no other country has data as good as the United States’s EPA. I didn't know that. So people forget that in the 1970s, the United States went way further than any other country on the planet to mandate transparency on emissions, not action, just transparency.

And so we were suddenly in a world where Europe has much more aggressive laws about environment, but America had more transparency, and it actually wasn't technologically possible to reduce emissions cheaply in Europe, but it was in America, and that left us in a really interesting place.

Kevin Frazier: And just to pause there too, sorry, I'm gonna make you stop all the time because you're like 14 times smarter than me, and so I just have to break this down in chunks.

It is so remarkable to me that we haven't realized this lesson of just you cannot change what you don't measure. And I love that—I love that we faulted our ways into it as a result of some decisions made in the 1970s, but I also wanna pay attention to the fact that you have to have that infrastructure in place.

Gathering data doesn't just happen because you want it, right? It's not something you rub the, you know, genie bottle and it shows up. No, you have to really invest in that data collection infrastructure, and I'm really glad we did. And I'm guessing Europeans wish they had too.

Gavin McCormick: And so we were getting inbound from companies and all over the world saying, “What would it take for us to do the same thing?”

And I said, “Well, first you could have a 10-year program to stand up an equivalent of the U.S. EPA grid monitoring program.” Forget about it.

Kevin Frazier: Yeah.

Gavin McCormick: And then we hit upon a kind of crazy idea. So we had some physicists on our group of volunteers and some of them said, “Do you think you could point a satellite at power plants in other countries and train a machine learning AI model, trained on US data, but using the new satellite data, satellites have gone way down in cost, there's way more than there used to be, and look at photographs of power plants around the world every few hours and detect what are their emissions and build a cheap equivalent.”

And I thought that sounds crazy. But we, for fun as a training exercise for our staff said, “Why don't you write this up for a grant for Google.org? Wouldn't that be funny if they agreed?”

Kevin Frazier: I, again, your definition of fun is just wild to me, but I'm so glad you observed.

Gavin McCormick: But we did it with no expectation that we would actually win.

Google calls us and said, “Yes, we will give you millions of dollars to try a crazy might work AI solution to monitor all the power plants in the world and provide a free database of their emissions for anyone to use for any purpose.”

Kevin Frazier: Wow.

Gavin McCormick: Whoa. Didn't really expect that. It was a coalition of three nonprofits that kind of teamed up on this thing.

When we announced the project Al Gore read the message. Apparently Al Gore had envisioned for 20 years that if the technology were ever possible to do something like this, he thought this was the key because he was a fierce believer in the power of transparency and technology to change the environmental conversation.

Kevin Frazier: To Al Gore's credit, he was thinking about tech way before most Americans. It's cool to hear that—Yeah no, definitely. Okay. So Al Gore is reading these DMs, finding out this random information. How does he then get inserted into all of this?

Gavin McCormick: So Al Gore literally had a news alert set up for years in case anyone ever announced that they had built this technology.

'Cause he's—

Kevin Frazier: Before we get— I wanna know what the keywords were. Like, satellite?

Gavin McCormick: —Earth, machine learning, I'm not quite sure.

Kevin Frazier: That's awesome.

Gavin McCormick: But so we get a call from Al Gore's office. There's a hilarious moment where at first we don't believe it's Al Gore's office but it turns out it's a real deal.

And so he invites me into his office and he says, you know, “What a wonderful project, but Gavin, the climate movement is bigger than just power plants. Is there any version where you could take this innovation and apply it to everything in the world that pollutes?” And I said, “No, sir, I do not.”

Kevin Frazier: Just a small ask.

Just, you know, measure—This is for everything, Gavin.

Gavin McCormick: And so, you know, I said, “Look I, no I don't know how to do that. You would need experts in so many fields.” And then the fact this project just happened to be different nonprofits teaming up anyway, we hit upon this idea, what if we just keep adding more nonprofits with more different types of environmental expertise?

Kevin Frazier: Your own kind of Scaling Laws, the nonprofit Scaling Laws.

Gavin McCormick: Yeah. So we hit upon kind of like a Wikipedia model. What if we have, we make it really easy for nonprofits to join when they contribute data to the project, it's got to be free and open source for everybody. But unlike Wikipedia, it's a little bit more structured data, so you could actually use some clever AI algorithms to, to make the whole thing more accurate.

Fast forward a few years, 150 nonprofits and universities and tech companies have joined the Climate TRACE Coalition, which is now the largest provider of emissions data in the world.

Kevin Frazier: Wow. So to break it down for a second, basically what we've got, satellites hanging out in low earth orbit, taking a look at all of emissions: power plants, data centers, mines, cars.

Gavin McCormick: All of it.

Kevin Frazier: You name it. And by virtue of monitoring that—

Gavin McCormick: Yeah.

Kevin Frazier: Then training on sophisticated data to understand, okay, whatever I'm detecting, that's going to result in this much emissions. And then having that be refined over time where, for example, if I am a power plant operator myself, I could call up Climate TRACE and say, “Hey, it's in my interest actually to show people that I'm among the most efficient power plant operators.”

Gavin McCormick: That's why it works. The good ones want transparency.

Kevin Frazier: So the whole idea here now is if I can have Climate TRACE verify, hey, Power Plant A is actually far more efficient than Power Plant B, that can lead to, you know, perhaps lower regulatory fines or regulatory scrutiny, so on and so forth, and even your customers may appreciate that, so on and so forth.

And so this sort of transparency actually makes sure that the green watchers of the world, the folks who are trying to sound environmentally friendly- That's right. ... but really weren't, get called out.

Gavin McCormick: That's totally true. And so one of the big surprises for me, so, you know, if you can't tell I'm a San Francisco Berkeley liberal, I have all my views on government—

Kevin Frazier: Hey I, as a Berkeley grad you know, I'm a fellow bear, but I just had to walk further up the hill than you.

Gavin McCormick: There you go. Then I think the big surprise is how much I'm seeing a free market answer in this story. So my surprise as, you know, a person who believes in government, actually the government mandates are a very small piece of the story and the transparency of the USCPA was really important and the transparency of equivalent governments, you—Uruguay did the same thing on cattle their way ahead of America on cattle emissions.

Kevin Frazier: Who knew?

Gavin McCormick: Who knew?

Kevin Frazier: Go ... Yeah. Yeah. Woo for Uruguay.

Gavin McCormick: Woo for Uruguay! And so, you know, by stitching together all these government transparency programs, whoever's best in class in every sector that's our training dataset, and then applying all this transparency, I would say 80% of the emissions reductions that result are free market, not government based.

It is not a story about mandates.

Kevin Frazier: And what strikes me as well is that government intervention here would actually inhibit your ability to do this, which is to say when you have the government specify, “Hey, this has to be the approach or that has to be the approach,” you may have missed out on the sort of detection of what was truly more environmentally friendly and allow for that kind of rapid response as a result of that transparency.

Is that a fair take?

Gavin McCormick: I think that's exactly right. And so just to be very careful, I'm not saying government should sit on the sidelines. I'm saying the role of government, and I completely agree with you, it needs to be in terms of outcomes. So the Biden administration, much as I love a lot of what they did they did push through a rule that actually requires measuring a particular metric they thought was gonna be helpful on emissions.

Turns out to have no scientific credibility and related emissions awkward.

Kevin Frazier: Awkward. Hate when that happens. Hey, hate when I, you know, bake a bad idea into law and just assume it's gonna work out.

Gavin McCormick: And so governments that have instead passed laws like you must measure emissions, you must reduce emissions, let the science go where it goes.

And, you know, often the Biden administration got this right. There's just, there's one case where they really got wrong. That radically outperforms government trying to pick the winner in a fast moving environment.

Kevin Frazier: And having that sort of outcome-oriented approach is more data intensive. It's more you know, requires a higher degree of actually paying attention to what you're doing.

Gavin McCormick: It's more work.

Kevin Frazier: And it's more work. And I think we've become accustomed to a sort of set it and forget it approach to the law.

Gavin McCormick: Yeah.

Kevin Frazier: But as you've noted, and as you're seen in real time with Climate TRACE, we have access to more and more data. And so in theory, this should be leading to more and more outcome oriented legislation to hold ourselves accountable.

Gavin McCormick: And so I totally agree. And so I don't have the same legal background you do, but I did used to work in the United States Department of Energy. And one of my big discoveries is that there is a deep-seated belief that the thing that is greener surely is more expensive, and it's shocking how often that's wrong.

And so we had all these energy efficiency standards where we concluded that the higher energy efficiency technology was also cheaper. And the reason to mandate it is people were just confused, but there was like literally you give up nothing. And so I think what data and science can do is they can create I love the name of the Abundance Institute.

They can show you how often the right answer is there. It's a false choice. You can have your cake and eat it too. You can do the greener thing. It's actually better business, better operating conditions. There is no catch other than you needed to look at data.

* * *

Kevin Frazier: Hi, I'm Kevin Frazier. I'm the AI innovation and law fellow at the University of Texas School of Law and a senior editor at Lawfare. If you've listened to Scaling Laws or read our work on AI and national security, you've seen the kinds of questions I spend my time thinking through. What makes Lawfare worth supporting is straightforward.

It delivers reliable, independent, non-partisan analysis on some of the hardest hitting issues in law, technology, and security, and it does so without cutting corners. We try to slow things down just enough to get them right, even as the new cycle speeds up. That kind of work matters now more than ever.

Emerging technologies are moving faster than the policies meant to govern them, and the stakes for democratic institutions, for markets, for individual rights are real. Clear, careful analysis is one of the few ways to keep up without losing rigor. Lawfare is a nonprofit, and everything we produce is available without a paywall.

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Thanks for listening, happy prompting, and thank you again for taking these issues seriously.

* * *

Okay. Well, I usually try to find a bumper sticker for each episode, and there is no catch, you just need data is, that is perfect. I'll send you one when I finish it. Awesome. So let's move now into the highly contested territory of data centers and AI development because everyone and their mom has heard about how data centers are destroying the planet and how they are using just incredible amounts of power and really putting a strain on our energy grid.

Gavin McCormick: Yep.

Kevin Frazier: What is your perception of- Yeah. ... that story and that narrative from Climate TRACE’s view?

Gavin McCormick: So first of all, every data center that causes pollution climate change is tracking. So in our database, we've got the world's data centers. And so we look a lot at the data. And the short version is one half of that story seems to be right and one half of that story seems to be wrong.

And so do data centers use a lot of electricity? Heck, yes. It is actually true that some of the AI companies now use more electricity than entire countries. I believe Amazon is the same as Ireland now.

Kevin Frazier: Oh my.

Gavin McCormick: That's real.

Kevin Frazier: That is bonkers. Okay. Yeah. So Ireland and, you know, Jeff Bezos, or excuse me, sorry, Andrew Jassy.

That is insane.

Gavin McCormick: That's, so that's happening. People are not wrong about how much power this thing's using. Here's the catch. When people ask, “Is this thing polluting?” They typically look at the thing that is easy to see. So we know that using power is supposed to be bad for the environment, people are using a lot of power, they assume therefore that pollution is coming from these things.

What they don't know is that Amazon was also by far the world's largest builder of renewable energy last year for the third year in a row. And so if you ask, “Are they using a lot of power?” Yes. If you ask, “Are they using fossil fuels?” Well, actually, most of that was wind and solar. So hold up, if you build a whole bunch of wind farms and you use a whole bunch of power, you're not gonna use up the wind.

It's not like if we have more sailing ships, we run out of wind.

Kevin Frazier: Right, thankfully. That was good for the Mongols I heard. Yeah.

Gavin McCormick: There you go. That's right. That's right. So, you know, typhoons aside in, in, in all seriousness, the question isn't how much electricity are people using.

The question is how much dirty electricity people are using. And when you look at data centers that way, it is a completely different story than people know.

Kevin Frazier: And this is where I get so frustrated, not just by environmental headlines, but you can apply this to a lot of different domains, but how quickly the first headline you shared, right?

Which is “Amazon and Ireland use the same amount of power” and people are instantly just gut reacting.

Gavin McCormick: No different. Yeah.

Kevin Frazier: Amazon's the worst, right? Like stop data centers, this has to be bad, and yet it's just the second and third question that if you go and ask, you can realize an entirely different answer.

Gavin McCormick: Totally. And so what I'm seeing is a lot of misunderstanding. And by the way, you know, Microsoft is doing even better. So like a lot of these companies are great. So like Apple and Microsoft and Meta now have essentially hit zero emissions from data centers and is all going as renewable energy and a lot of other companies are investing heavily in renewable energy.

There's a lot of innovation happening. Google invented this thing called a or essentially popularized this thing called a virtual power purchase agreement that allows you to build a wind farm not on site a little further away so you can like go where the wind is better and stuff. I'm thinking, not thinking quickly enough of the other innovations, but like a lot of innovations are happening by these folks.

Kevin Frazier: Well, and just to pause there too, to go back to your free market point earlier, it's in the incentive of the hyperscalers to have these be as efficient as possible.

Gavin McCormick: That’s right.

Kevin Frazier: Because I have a lot of tired lines, but one of them now is today's data centers are the least green data centers will ever have. Is that a fair statement? Now that I've got a—It could be right actual environmental scientists. Hold me accountable, Gavin, please.

Gavin McCormick: Well, you know, the punchline is the market is telling us very clear that what data centers are gonna do is they're gonna—they're gonna build these things. You know, whatever your opinions on AI, and I'm no expert on the rest of it, but, like, it's gonna get built.

And they need the power. And the truth is right now, it's increasingly cheaper to use clean energy than dirty energy, and it is increasingly faster to build clean energy instead of dirty energy. People miss this part. It's slow to build a gas turbine. So—

Kevin Frazier: It's also pretty hard to, you know, build a mountain out of coal.

I've heard that, you know, just takes a few m- million years and then you've got one.

Gavin McCormick: That's right. Oh my God, refreshing coal. And so, you know, there's such a fundamental logic to these guys powering it all on clean energy. And yes, it's good for the environment, and yes, also it benefits them, good for companies to make more money if the way they do it is clean energy, I say, but they're not all doing it.

Kevin Frazier: And they're not all doing it. So let's go there, and then I wanna get to the fact that other users of power are learning from, let's call them the good ones. But let's get to the bad ones first. Tell us about all data centers not being equal.

Gavin McCormick: So I guess what I wanted to say is that I think the story is, you know, like we were saying at the beginning, it's not that all AI is good.

So, you know, Elon Musk, to his credit and the xAI company have not pretended otherwise, but they're powering Colossus 2 on gas, on fossil fuels. And I appreciate that they're at least being honest about it. Good for them. But, And

Kevin Frazier: For the folks who don't know about Colossus, the name is accurate here is incredibly expansive.

I believe it's in Mississippi or is it Tennessee?

Gavin McCormick: I think it's near Memphis.

Kevin Frazier: Okay. It's, let's go with near Memphis. I think you're absolutely right. But Colossus and being powered by incredibly dirty energy, but unabashedly so.

Gavin McCormick: Yeah. And so, you know, people like me appreciate the transparency because you can at least have a conversation about how do you fix it, although that's a lot of pollution.

And so what I wanted everybody to see is that all of the hyperscalers as this race to get power faster and faster is heating up. They're all at a crossroads. Are they gonna keep investing in clean energy or not? And I think we should not use the paradigm of all AI as bad environment, all AI is good for environment, but which one did they choose?

And I think there's a lot of history of pushing false narratives about clean. There's a lot of weird definitions of clean flying around there now, but at the end of the day, they either did or did not use clean energy. And if you just measure it in emissions with reasonable science, we are gonna know because we can track this all with satellites, what was the answer?

And it's not clear yet which one they're gonna pick.

Kevin Frazier: And what is the determining factor there? Why are we on the that precipice point of deciding clean or not? What factors should people be paying attention to?

Gavin McCormick: So some of the complicated things that factor in these companies' decisions are it can be more difficult to get approval from an electric grid to build clean energy.

That's a problem. We've gotta deal with that as grids.

Kevin Frazier: It sounds like lawyers fuck something up yet again.

Gavin McCormick: You know, some of this is legal innovation, and so there's also questions like there's this concept of 24/7 energy floating around. It's a very well-meaning attempt to, to raise environmental standards, but it actually isn't scientifically credible that adopting 24/7 reduces any more emissions.

And the problem with 24/7 is that it is about six times more expensive. So one of the trends we're seeing is that if a bunch of well-meaning people from the public kind of attack any AI company that's not using 24/7, well, then you're gonna make renewables six times more expensive and suddenly the math doesn't pencil out for its cheaper than fossil fuels.

Kevin Frazier: And so by 24/7, you're meaning that the public's screaming, “Hey, if you're building this power plant, building this new data center, we want you to be operating all of the time using all of it extensively. Is that the correct understanding of what they're clamoring for? “

Gavin McCormick: That is what people meant when they started this thing.

But a little detail of 24/7 is you have to build the clean energy physically nearby the data center. That's just not how power grids work. It's very common you turn on a light switch and you turn a power plant thousands of miles away. And so a well-meaning effort, “Hey, you gotta build the wind farm and the solar panel nearby so we know it's real.”

That is the heart of what is making it so expensive suddenly to power data centers on clean energy, and it doesn't do anything for the environment to have the solar be nearby or far away.

Kevin Frazier: And I wanna hit on a point that you and I discussed earlier, which is we're actually seeing that some of the power regulators themselves are beginning to learn from the best practices—

Gavin McCormick: That's right. Totally.

Kevin Frazier: of the cleaner AI labs. So what are those innovations that are now spreading that are actually helping us be more green across the board?

Gavin McCormick: Yeah. So, you know, my favorite first example was the California Public Utilities Commission in the battery story I told you, like, the tech companies actually got a little bit involved in that story, so it is not totally a coincidence.

Microsoft was playing around with how to use batteries at a cleaner time and was part of the conversation of California regulators realizing if you're gonna have batteries anyway, what is the correct time? But then it gets more subtle. So, like, another thing right now is the California Air Resources Board—this is my last California story.

Kevin Frazier: That's okay. That's okay. Hey, you know, being the fifth largest economy in the world and 40 million people, they do merit some degree of outsized attention.

Gavin McCormick: And they sure like environment. So, yeah, the Californians right now thinking about regulating it will be the first U.S. mandatory emissions reporting program at the state level.

And how should they define emissions is a live conversation right now where they are very much looking at what the tech companies are innovating and doing. And, like, one of the things that I think surprised regulators at CARB is how often companies are willing to voluntarily reduce more emissions than they were forced to.

If they can report it in a way that better matches the latest science and data, which is to say, like, thinking at the five-minute level and the local level as opposed to vague annual guesstimates. And so regulators were realizing that companies would support a more ambitious environmental regulation if it just used better data.

That's different than your old assumptions about how data works.

Kevin Frazier: Wow. And so you have this great trove of data. You're improving over time, you're holding folks accountable, and you're making all of this information accessible. Are people listening?

Gavin McCormick: Yeah. I mean, my experience has been, you're always gonna get pushback from, interestingly, it's not all fossil fuel companies, it's the oil industry.

For whatever reason, the coal industry tends to be open and honest about, yeah, we're terrible at the environment. It's always the oil industry that tries to have tricks. Don't know why.

Kevin Frazier: So the coal guys, cool cats, fully transparent, but don't trust oil money.

Gavin McCormick: Yeah, it's bad.

Kevin Frazier: Fascinating.

Gavin McCormick: I don't know why, but there's a much longer history of oil companies pulling funny business and arguing.

So we spend a lot of time, like, showing satellite images of, like, “Hey, if your emissions were the numbers you say, guys, then this oil field shouldn't exist. Like, here is a photo of an oil field that can't exist if your numbers are real.” That's the kind of argument we're often in. And then I do find that there are a decent number of people who are making money selling some product that they probably honestly think is green.

And when beta data comes out and says, “Actually, it's not clear that's good for the environment,” that really can be tough for people. I won't name names, but there are definitely plenty of startups that perfectly well-meaning innovation, science advanced, turns out that's not good for the environment anymore, really hard to go to your VC board and say, I think the company should just not make money anymore.”

Kevin Frazier: Yeah. And so what this really speaks to me on is the need for just making space for more consideration of data in terms of our legal agreements, in terms of our public discourse. How do you think through that sort of translation effort of how do we make folks more empirically driven? And I'm not—

I know that seems like a duh statement, but you can go talk to a behavioral scientist and they'll tell you, you know, folks are compelled by stories, folks are compelled by narratives, so on and so forth. So do we need that sort of legally mandated, outcome-oriented approach or what is your kind of wishlist of things that we can either do culturally or legally to try to make your job easier?

Gavin McCormick: I think, you know, my biggest lesson is if you look at what the real money is in putting money behind the things we need to stop climate change, you know, the money to pay for EVs, pay for wind farms, pay for green steel. Most of it is not driven by government mandates. Most of it is driven by companies wanna look green, they wanna be responsible to their investors and so on.

But what governments need to do is they need to set the rules of the road of what is green and what isn't green. And it is so important when they do that, that they use proper science and not some buzzword they found on the internet. And so I think, you know, at the end of the day, one of the biggest rules of governments is to set the rules of the road.

Like imagine if we didn't know if you have to drive on the right or left side of the road. We gotta have standards—

Kevin Frazier: I don't, I don't think I'd imagine that because I'd be dead, but,

Gavin McCormick: Yeah, like a disaster. And so nobody needs to force you to drive on the right side of the road. It's more about a coordination problem.

And I think that we have this paradigm of we need to push companies harder to be green and governments can actually be in a helping supportive role saying like, “Guys, these are the rules and it's based on science. And if you, a company voluntarily invest in going green, you won't be caught flatfooted suddenly against the rules.”

That's a very different vision for what law can do in environment. Yeah. And it's coming from a liberal here, so I'm—

Kevin Frazier: Hey, I love the vision. Well, and I love that it's not liberal, it's not democratic, it's not conservative, it's not republican, it's just empirical. It's just what works. And it's just what works, and that's something we should all be wildly excited by.

And I think recognizing too, just to zoom out for a second, you all leveraging AI in such a creative fashion would not be possible without, a, the collaboration that you've seen across different nonprofits, that sort of willingness to get involved, that willingness to share information, but then secondarily, being willing and open to share data.

And this is why I have a lot of issues with folks who say, “AI sucks.” My first response is, “Okay, but what data was available?” I'm sure you can testify to, and I'm eager to get your feedback on, I'm sure your first algorithms for, let's say, measuring cattle in Missouri probably weren't great, right?

Because you didn't have as much data.

Gavin McCormick: Yeah.

Kevin Frazier: But this act of actually, if we want better AI, you have to give it more data. It's not just a magical process of more compute or more algorithms. That data is going to be. It's still fundamental. So how much of that is your, are you a sort of like data hoarder right now?

Do you just like go knock on doors, beg people for more data or what's that process like?

Gavin McCormick: Yeah. So, I mean, I really think you're onto something and so I would say that—So Climate TRACE is this big coalition, right? We look at satellite data. We are the 20th project that we know of that tried to get everybody to share all their data to build better AI and satellites and measure emissions.

Kevin Frazier: Wow.

Gavin McCormick: The first 19 that we know of failed, and they all failed for the same reason. They all failed because the project model was there is a guy, because it's always a guy who's in charge, and everybody else needs to give him data, because it's always a him, and there is not really a reason why. And so, what we saw is that a notion that one plus one equals three, that joining data makes us all more powerful, it breaks down if the model is someone is in charge and everyone else is subsidiary to them.

And so—

Kevin Frazier: To get—So eliminate the men first.

Gavin McCormick: Starting the front of the gender thing, but it is striking how it's usually not a woman—

Kevin Frazier: And this is empirical as well. 19 out of 20.

Gavin McCormick: Right. Right. And so, we don't have a leader of Climate TRACE. There is no CEO of Climate TRACE. All of us have equal access to the same data.

Certainly, people spend more time and less time on it, and certainly the fact that everybody respects Al Gore means his opinion kind of counts more than your average person. But we do things as votes, and the key to it is that the design of Climate TRACE gives everybody who's there a reason to be there, and it's not a, you are just here to support me, we're all there to support each other, and that is a total paradigm shift of why people would share data, and it's why the project's still here.

Kevin Frazier: Well, and what's crazy too about your model is that once you put data at the heart of governance, and once you put data at the heart of this sort of new way of thinking about a policy area, you create the incentive for more transparency- That's right. ... and for more data gathering. And so the fact that I'm pulling from a separate podcast you were on, I apologize but you mentioned, for example, that there is a construction company that actively shares data with Climate TRACE because they want to expose their competitors as being less green. And so—

Gavin McCormick: Yeah.

Kevin Frazier: That's only possible, or that's only in their self-interest if they know that sharing that data then leads to a positive outcome. And so we have to think through in all of these other domains, I hope it keeps occurring in the environmental front but in education and in healthcare, and in so on and so forth, how do we make data and AI actually at heart of that process so that we have better outcomes?

Gavin McCormick: And so I hear two things in that story. From the perspective of the people running the algorithms, the key breakthrough on Climate TRACE was instead of starting with the assumption that people will give us data are valuable and takes time.

Why would you join and the coalition needs to go wherever it makes sense for the people contributing? The other thing is, why would the people who are being measured want to be measured? And I think there, I always go back to what I saw at U.S. Department of Energy. This is actually a story that happened in Japan, but we were tracking it.

Pepsi and Coke got locked in a battle about who could—

Kevin Frazier: No.

Gavin McCormick: Haha. And so they started competing on clever ways to go greener, and then under Japanese law, you always have to be as green as the greenest company was five years ago or something like that under the top green-runner program.

Kevin Frazier: Okay. Good for Japan. Sounds fascinating.

Gavin McCormick: Clever program. Why does this matter? Because anytime they could invent a new way to go greener and not tell the other company, they got like a little leg up on their competition. And so what I saw is this amazing runaway trend of companies had a hard business reason to go green because it, it gave them a little bit of edge in the competition, but then the only way to beat them was to have a, an even greener thing and an even greener thing.

And so my data discovery is that in almost anything you're measuring, somebody's gonna be above average and somebody's gonna be below average. And if you can set up a system where everybody who's above average has an incentive to donate data and then they have to keep working to stay above average, you build this like runaway collaboration train that doesn't need anybody, any laws forcing anybody or any carbon taxes.

Kevin Frazier: And no laws to force that. And you get the innovation of finding out that new thing, right? Instead of saying, “This is the mandatory mechanism you have to use.” Yeah. Now, Coke and Pepsi, of all institutions, are experimenting, are innovating—

Gavin McCormick: Innovating, discovering what works. Sometimes they're wrong, and then, you know, the other guy gets a win for a minute, and then they catch up.

And I think that is a bigger story than environment, and I think it's a bigger story than, you know, it was cool in Japan, there was this mandate, but I think what I find is usually companies just need a way to tell their customers, “Look at us, we're better than the competition,” and that's all it takes.

Kevin Frazier: That's all it takes. We're pretty simple. We just wanna know what the best is, and we'll pay for it. And, you know, to your point, it is bigger than the environmental sector. People want that in education, people want that in healthcare, fantastic. People want that in mental health. All of these areas where I get that it becomes more sensitive, right?

When folks think about sharing health information or sharing educational data, but this is all just a matter of creating new institutions and creating new norms. And to me, this is just a matter of creativity, right? It required you, Gavin, hanging out with some homies in San Francisco and deciding, “Hey, let's take a risk. Let's be creative. Let's build this new approach.”

And the other 19 failed because they didn't have the same degree of imagination and dedication to this new model, but there's no reason why we can't copy you, Gavin, in so many other domains.

Gavin McCormick: Oh yeah, totally.

Kevin Frazier: I apologize for—you know, it's a sincere form of flattery, but I am going to share this episode with everyone, and their mom, and their daughter, and anyone else who will listen.

Gavin McCormick: I'm already tracking in the biodiversity space there are hints of a Climate TRACE-like play, and maybe they are gonna invent it better. And so what I love about this model is that we sometimes have this mental model that competition's a problem but if these are issues that all of us want to succeed, and, you know, healthcare is a great example where I'd love to see other people succeed, it just kind of flips the script.

If it's like anybody who can collaborate better, it's not a problem, it's a good thing. And I really think that somebody's gonna come along with a, like an even better version of the story tomorrow, and great, I'll celebrate their win.

Kevin Frazier: Yeah. Move fast and collaborate. There we go, right? We'll change the SF paradigm.

So Gavin, before I let you go back to saving the world, any final thoughts, any final message you want folks to know where can they find you? Where can they monitor what hyperscalers are up to, give folks the information they need?

Gavin McCormick: So climatetrace.org has free information available to everybody.

Our hyperscaler dataset is not public yet. It will be soon. You can always email us if you want, find us on the website. But if I can leave you with a second hidden message.

Kevin Frazier: Please.

Gavin McCormick: I wanna give Walmart a shout out. Walmart is my favorite example of a company that is not just going greener. They are saying: “Actually, we want two things. We wanna go greener and we want it to cost less than not going green.” And so I think the big new trend that we're seeing that Walmart kinda kicked off is saying, “If anybody can invent a better system to go greener that actually costs less than today, we commit we'll buy it.”

And I think this is the future because I think if there's one story people need to know about AI and environment is, it's not harder to do it right. Get rid of the idea that it must be more difficult to do the right thing. Just check what the right one is and buy it and don't pay more for it.

Kevin Frazier: I love this.

Advanced purchasing agreements have a heck of a lot of influence. Thanks Abundance. And Gavin, thank you for all the work you're doing. Maybe I will go buy some Walmart products, who knows? But in the interim, I hope to see you in San Francisco sometime. Thank you again for coming on Scaling Laws.

Gavin McCormick: Sounds great. Thanks for having me.

[Outro]

Kevin Frazier: Scaling Laws is a joint production of Lawfare and the University of Texas School of Law. You can get an ad-free version of this and other Lawfare podcasts by becoming a material subscriber at our website, lawfaremedia.org/support. You'll also get access to special events and other content available only to our supporters.

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As always, thanks for listening.