The U.S state of Colorado has passed a bill directing two state-run universities and the Colorado Water Institute to research the use of blockchain and other emerging technologies for water management.
The new legislation marks an attempt to combat Colorado’s severe water shortage problem. The state is currently facing shrinking water supplies which have been exacerbated by a rapid population increase, hotter temperatures brought on by climate change and reduced levels of rainfall.
The bill aims to stimulate research into the usage of emerging technologies. It pinpoints “blockchain-based documentation, communication and authentication of data regarding water use” as a major area of focus.
Lawmakers have identified three key goals to the bill:
- To improve the monitoring, management, conservation of surface water and groundwater
- To reduce inefficiency and waste in the process of recycling, reclaiming or disposing of wastewater
- To allow parties to water rights transactions to have more confidence in the data on which those transactions are based
Blockchain will be central to achieving the bill’s third goal. By having all data exchanges or transactions recorded on an immutable ledger, parties can track and access water rights transactions with greater trust and speed. Smart contracts can automatically execute transactions.
Colorado’s water quality control could also be strengthened through blockchain. The release of any wastewater or discharge pollutants could be reported via blockchain and then used to inform the public. This would allow stricter enforcement of regulations concerning water disposal.
Other forms of emerging technology specified in the bill include remote sensors, satellite systems and water resource forecasting technologies.
Previously in 2019, the Colorado General Assembly failed in its attempt to pass a bill specifically on blockchain usage in water management.
The 2021 bill asks that the universities give the first progress reports by July 15, 2022.
Blockchain has been used elsewhere for water management, particularly for trading water rights in regions with scarce water resources such as California and Australia.
