Impact of Artificial Intelligence on Environmental Quality through Technical Change: A Free Dynamic Equilibrium Approach

TL;DR

This paper models the impact of artificial intelligence on environmental quality, revealing that AI alone may not prevent environmental disasters due to its role in dirty production, but government intervention can enhance positive outcomes.

Contribution

It introduces a mathematical model analyzing AI's dual role in environmental impact, highlighting the importance of policy in leveraging AI for environmental protection.

Findings

AI alone may not prevent environmental disasters

Government intervention enhances AI's positive environmental impact

AI can contribute to dirty production, complicating its environmental role

Abstract

In the times we live in today, humanity faces unprecedented environmental challenges. The emergence of artificial intelligence (AI) has opened new doors in our collective efforts to address our planet's pressing problems; however, many have doubts on the actual extent of impact that AI have on the environment. In particular, AI also assisting dirty production is a drawback that is largely absent from the literature. To investigate the impact of AI on the environment, we establish mathematical models to model the economy and the production process of goods based on outdated and advanced technologies. The secondary results are stated in the form of lemmas, the main results are stated in the form of theorems. From the theorems we conclude that AI may not on its own prevent an environmental disaster, a reason of which is its concurrent contribution to dirty production. With temporary government intervention, however, AI is able to avert an environmental disaster.