New policy report examines current knowledge about data center water use and what can be done to better understand and manage its impacts.
From UC Berkeley Center for Law, Energy & Environment
AI is driving a boom in data centers, and with it growing demands on California’s water resources. Developers are building more data centers alongside the hundreds already operating in California. This report evaluates how to better manage their water impacts on local communities and the environment.
Servers in data centers generate heat and typically use water for cooling. Concern over data center water use is growing. Yet, there is very little understanding of how much water they actually use, where their water use may cause negative impacts, and what measures the state, local leaders, and the industry can take to manage it.
To respond to this growing challenge, our team reviewed current knowledge on data center water use, mapped the policy and regulatory framework for direct data center water use in California, and developed recommendations.
Our work resulted in the following key takeaways:
- Existing reporting requirements have not provided a clear understanding of data center water use in California. Lack of data and transparency hinder an understanding of how much water data centers use, what ‘efficient’ water use looks like, what water sources data centers draw from, what the impacts of their water use are, and how those impacts compare to other water uses.
- Data center developers and owners have options: Siting new centers in areas with low water stress, selecting appropriate cooling systems, and using recycled water are levers for reducing a data center’s water use. Cooling strategy decisions involve tradeoffs. For example, more water-efficient cooling strategies usually use more energy.
- Oversight of direct data center water use in California relies on a patchwork of policies and regulations that has gaps and inconsistencies.
- Local communities bear many of the impacts of data center development. Local governments also determine whether and under what conditions a data center can be built. They must consider the data center’s impacts, including its water and energy use, and weigh that total footprint against the needs of existing residents and industries. Ultimately, they decide when expected economic gains justify the additional strain on local resources. Yet local decision makers lack guidance on how to understand and address data center water use.
- Data centers’ water and energy use are intertwined and may present different trade-offs at different scales. On a smaller scale, a data center’s direct resource use can increase stress on local water systems and regional energy systems. On a larger scale, both direct and indirect resource use (like water used in energy production) contribute to a data center’s—and the broader data center industry’s—aggregate water and energy footprint.
The scale of recent data center growth and the magnitude of the industry’s estimated water use call for a coordinated effort to track and understand data centers’ water use–before the industry’s rapid growth creates irreversible impacts.
To improve understanding and management of data center water use, we recommend that state and local governments and the data center industry take the following actions:
- Improve water use data collection and transparency: For example, the state can expand requirements for data center operators to report their anticipated and actual water use – regardless of which water sources they draw from. This would help local decision makers make informed choices and state agencies track demands on water supplies.
- Build local capacity: The state can build local capacity by providing guidance and model regulations and tools to help local governments make informed decisions.
- Establish requirements and incentives for data center water efficiency and recycled water use. Local governments can use land use, planning, and zoning tools to encourage or require efficient water use or the use of recycled water.
- Consider local water-related impacts when making data center siting and design decisions. The data center industry can more transparently and explicitly consider local water-related impacts when making data center siting and design decisions.
- Include site-specific water use data in corporate sustainability reports. Companies can also share more site-specific water use data in their corporate reports. This can help make water and energy trade-offs explicit and help regulators and communities understand data centers’ true impacts.
If the State of California wants to address concerns about data centers’ rapidly expanding water footprint, it needs to act before more centers are built. Once a data center is in place it will be difficult or impossible to mitigate its negative impacts. State and local governments and the tech industry can champion transparency and innovation to reduce data centers’ water impacts – enabling digital solutions powered by data centers, while protecting local water resources and the ecosystems and communities that depend on them.
Download the executive summary.
Authors: Marie Grimm, Nell Green Nylen, and Michael Kiparsky
Suggested citation: Grimm, M., N. Green Nylen, and M. Kiparsky. 2026. Regulating Data Center Water Use in California. Center for Law, Energy & the Environment, UC Berkeley School of Law, Berkeley, CA. 66 pp., available at https://www.law.berkeley.edu/data-center-water-use
For more information:
Contact Marie Grimm, Environmental Policy Research Fellow, or Michael Kiparsky, Director, Wheeler Water Institute, Center for Law, Energy & the Environment.
This work was supported by the Internet Society Research Foundation (ISOC), Project “Greening the internet: Transforming useful research into used outcomes”; the Agriculture and Food Research Initiative, Project Award No. 2021-69012-35916, from the U.S. Department of Agriculture (USDA) National Institute of Food and Agriculture; and a grant from the U.S. Environmental Protection Agency’s (EPA) Office of Research and Development under Assistance Agreement No. RD-84046101.
