Mapping the Indirect Economic Impacts of Climate Change and Water Supply Shortages: Supplementing the Colorado River Basin Study with Innovative Information

Project ID: 5222
Principal Investigator: Deborah Tosline
Research Topic: Water Resource Data Analysis
Funded Fiscal Years: 2016
Keywords: None

Research Question

The impacts of Reclamations water management decisions; including allocation, reallocation, trade, and
conservation, do not end at the edge of the Basin or the Irrigation District. Likewise, the nationwide economic
implications of Reclamations decisions are under-appreciated by U.S. Congressional and other critical decision
makers. Bureau projects supply the most productive agricultural projects and power the wealthiest cities in the
nation, and have far reaching impacts. The proposed work will map direct water use and indirect water impacts via
trade for a Bureau project and its irrigation and municipal customers, and provides important information about
the network of nationwide businesses that depend on a Bureau project through trade connections. Each
connection involves goods and services that are worth money; accordingly, this data product also documents in
detail the economic productivity associated in all sectors of the economy with a Bureau project, in units of
$/gallon. This information complements the standard water balance and water quality type Basin studies. This
project will provide directly actionable information to help manage risk through diversification, and employ their
water supply chains to drive positive changes in both local and national water resource sustainability. Most
importantly, this information communicates to the national public and decision makers the systemic value of
Bureau projects and the systemic impacts of Bureau decisions, so that they understand why investments in
Western U.S. water projects matter for them- even in the Northeast and in the nation's capital.
The research questions are, (a) Who in the U.S. is dependent on Bureau projects (and where, and in what economic
sectors and business classes), (b) What are the impacts of water shortages in specific Bureau projects (initially the
Colorado River Basin), and (c) What is the economic impact of climate change and adaptive responses on the entire
U.S. econom

Need and Benefit

Since 2009, the Bureau of Reclamations WaterSMART program has implemented provisions of the Secure Water Act
of 2009 by pursuing the West-Wide Climate Risk Assessments of the effects of climate change on Western U.S.
irrigation and water supply, by pursuing a Drought Response Program , and by funding annual Basin Studies.
Through the Basin Study Program, Reclamation partners with stakeholders to evaluate the future problems and
opportunities in each Basin. Basin studies identify adaptation strategies to resolve basin-wide water supply issues,
including changes to the operation of water supply systems, modifications to facilities, development of facilities,
and non-structural changes which might include innovative water policy, water market, or water transfer schemes.
This proposal will prototype a new type of supplemental section of a Basin Study that will address the indirect
economic impacts of adaptation strategies that involve shifts in the amount and location of water deliveries, in
response to growing demand and climate change.
An exemplary Basin Study, released in 2012, is the landmark study of the water balance of the Colorado River
Basin (CRB). This Basin Study contains information on projected future water supply and demand scenarios and
imbalances, an evaluation of options and strategies to resolve imbalances, and consideration of next steps. The
primary conclusion of this major Basin report is that future climate change and economic growth causes water
demand to exceed supply in the CRB. Technical sub-reports emphasize system reliability metrics and means of
evaluating risk as a part of scenario assessment. These reliability metrics focus on Water Deliveries, Electrical
Power Resources, Water Quality, Flood Control, Recreation, and Ecological Resources. This study specifically cites
need for economic modeling to establish socio-economic value impacts and electrical power value impacts, but
the necessary analyses are not completed due to limitations of scope. This proposal will address the economic
value impact of agricultural production and electrical power production during scenarios where water deliveries
shift in amount and location, and develop a new class of system reliability metrics based on the NWED
hydro-economic trade network that includes indirect exposure of all U.S. communities (including on the east
coast) to the risk of water shortages. This project directly addresses future work needs identified in the 2012
Colorado River Basin report, and goes beyond those stated needs to present a fundamentally new information
product mapping the nation's indirect economic dependencies on Reclamation's Colorado River Basin projects.

Contributing Partners

Contact the Principal Investigator for information about partners.

Research Products

Bureau of Reclamation Review

The following documents were reviewed by experts in fields relating to this project's study and findings. The results were determined to be achieved using valid means.

Mapping the Indirect Economic Impacts of Climate Change and Water Supply Shortages: Supplementing the Colorado River Basin Study with Innovative Information (final, PDF, 202KB)
By Deborah Tosline
Publication completed on September 30, 2016

Generally, water managers evaluate future water demands based on direct water use. Water is embedded in the products that we use and this indirect use is not commonly tracked or integrated into economic analyses on water resource investigations. The National Water-Economy Project (NWEP) maps the indirect use of water resources of every county in the USA. The study assessed the potential for Reclamation to develop partnerships and a scope of work to use the NWEP to assess indirect water use for a Reclamation study. The initial proposal was submitted as a conducting proposal which instead, due to uncertainties, was selected as a scoping study. Following six months of coordination with Reclamation staff, no partnerships were formed and a potential research study was not identified. Based on a lack of interest and support it was determined that no further work would be completed and the scoping study was terminated. Prior to submitting any future proposals to use the NWEP on a Reclamation study, it is recommended that partnerships with Reclamation staff be established and approaches to utilize the NWEP on Reclamation studies be identified.

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Last Updated: 6/22/20