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Will Climate Change Affect Water Supply on the Missouri River?


How climate change will affect water supply from the Missouri River is not yet known. Current problems with Missouri River water supply principally affect the barge transportation industry, and the agricultural and industrial clients that use it to transport their goods and supplies.


The Missouri River is important for Missouri. More than half of Missouri residents get their drinking water from the Missouri River or the alluvial aquifer it directly feeds. Not only that, the river’s water is used for agricultural irrigation, for industry, to support barge traffic along the Missouri and Mississippi Rivers, for recreation, and to support the ecosystems that depend on the river for their survival.

Figure 1. Dams and Other Locations Along the Missouri River. Source: Google Earth.

In the previous post, I reported that the snowpack in the western United States has declined by 23%, and it is forecast to decline more by 2038. The eastern border of the study area forms the western boundary of the Missouri River Basin. Will the changing western snowpack impact the Missouri River’s ability to supply Missouri’s needs?

The answer is complicated. Precipitation in the Upper Missouri River Basin has historically fallen mostly as snow, building a winter snowpack that slowly melts during the spring. The snowmelt is gathered into reservoirs created by 6 large dams along the Missouri River, plus more than 40 smaller ones on tributaries. The 6 large dams begin at the Gavin’s Point Dam on the Nebraska-South Dakota border, and extend upriver to the Ft. Peck Dam in Montana. (See Figure 1.) The result is that water flow below the reservoirs is largely controlled by man, not nature.

Figure 2. Data source: Wikipedia.

The annual water yield from the Missouri River is small compared to the size of its basin. The data is given in Figure 2, where the red columns represent the length of the rivers, and the blue line represents their average discharge. No other river in the USA serves such a large basin with so little water. In drought years it is already too small to fully meet all of the demands that are put on it, resulting in conflict over how to manage the river, and over which values to give priority. The conflict has primarily been between up-river interests, which would like to see water allocated to support irrigation, drinking water, and mitigation in their states during periods of drought, and down-river interests, which would like to see water released to support commercial navigation on the river.

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Figure 3. Source: Hansen Professional Services, Inc. 2011.

In 2004, the Army Corps of Engineers changed the rules by which the river is operated to reduce water releases during drought. During drought years, this better supports up-stream interests, but results in a shorter season during which the river can support barge traffic. The result has been a decrease in annual tonnage moved on the river (Figure 3).

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Figure 4. Well Drilling in Western North Dakota. Source: Vanosdall 2013.

In addition, development in the Upper Missouri Basin has increased water demand in that region. A prime example would be the development of the oil and gas reserves in North Dakota. Well drilling uses large quantities of water. (See Figure 4). Given that the water yield from the Missouri River is already too small to fully support all of the demands placed on it, any increase in demand is bound to constrain supply even further.

The constraints discussed above, however, are all man-made constraints. How will climate change and the declining western snowpack affect all of this?

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Source: National Centers for Environmental Information.

The snowpack decline has occurred because of increasing temperature, not decreasing precipitation. Figures 5 repeats a chart I published in January 2016, showing that precipitation has increased in the region over time.

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Figure 6. Source: Melillo 2014.

Figure 6 shows that the 2011 National Climate Assessment projects that the annual flow on the Missouri River will actually increase by about 15% by 2070. However, more precipitation will fall as rain instead of snow, and the snow that does fall will melt sooner. This means that more water will enter the reservoirs during winter and early spring, and less during late spring and summer. In addition, increased temperature will increase evaporation from the river and reservoirs, and it will increase water consumption by crops, leading to earlier and increased demand for water. There is a potential mismatch between when the water is available and when it is needed.

The question will be whether it will be possible to manage the reservoirs successfully under the new conditions. When looking at the water situation in California (here), we discovered that water authorities expected climate change to create reservoir management problems that would result in an increased water deficit during the summer and autumn. It is possible that the reservoirs along the Missouri will encounter similar problems, but it is not certain.

One potential difference is that California has multiple, relatively short rivers, leading to only one large reservoir per river, and perhaps one or two small feeder reservoirs. The Missouri River, however, is a single long river. It has 6 large reservoirs chained along it, plus at least 40 feeder reservoirs on tributaries. This may give managers flexibility in managing the river that is not possible in California.

Five separate water resource studies have been undertaken to determine how climate change will impact the ability of the Missouri River to meet the demands placed on it. Unfortunately, they have not all been completed, and I can find no comprehensive analysis.

For the time being, problems with water supply on the Missouri River involve human decisions about how to manage the river. To date, in the State of Missouri they have primarily impacted the barge industry, plus the farmers and industries that depend on the barge industry to transport their goods and supplies.

Sources:

Drew, John, and Karen Rouse. 2006. “Missouri Water in High Demand.” Missouri Resources, Winter, 2006. Downloaded 5/31/2017 from https://dnr.mo.gov/geology/wrc/docs/Water-InHighDemand.pdf?/env/wrc/docs/Water-InHighDemand.pdf.

Bureau of Reclamation. 2016. Basin Report: Missouri River. Downloaded 5/25/2017 from https://www.usbr.gov/climate/secure/docs/2016secure/factsheet/MissouriRiverBasinFactSheet.pdf.

Bureau of Reclamation. 2016. SECURE Water Act Section 9503(c) – Reclamation Climate Change and Water. Prepared for United States Congress. Denver, CO: Bureau of Reclamation, Policy and Administration. Downloaded 5/25/2017 from https://www.usbr.gov/climate/secure.

Hanson Professional Services, Inc. 2011. Missouri River Historic Timeline and Navigation Service Cycle. Missouri River Freight Corridor Assessment and Development Plan. Downloaded 5/31/2017 from https://library.modot.mo.gov/rdt/reports/tryy1018.

Melillo, Jerry M., Terese (T.C.) Richmond, and Gary W. Yohe, Eds., 2014: Climate Change Impacts in the United States: The Third National Climate Assessment. U.S. Global Change Research Program, 841 pp. doi:10.7930/J0Z31WJ2. Available online at http://nca2014.globalchange.gov.

Vanosdall, Tiffany. 2013. Missouri River Water Supply. US Army Corps of Engineers. Downloaded 6/1/2017 from https://denr.sd.gov/coewatersupply22Apr2013.pdf.

Wikipedia. List of U.S. Rivers by Discharge. Data retrieved online 5/31/2017 at https://en.wikipedia.org/wiki/List_of_U.S._rivers_by_discharge.

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Declining Snowpack in the American West


The snowpack over the western United States has declined about 23% since 1981. It is projected to decline more in the future.


I have written a number of posts about the looming water deficit in California due to a projected decline in the snowpack on the Sierra Nevada mountains. Is something similar projected to occur throughout the entire western United States?

Figure 1. Change in Snow Water Equivalent at SNOTEL Stations, 1955-2016. Source: Mote and Sharp 2016, in Environmental Protection Agency, 2016.

Yes. Studies find that the water content of the snowpack throughout the West has already declined 23%, and it is expected to decline more, perhaps up to 30% by 2038.

This decline is not occurring via a decrease in precipitation. Indeed, to date precipitation across the West has actually increased slightly. The decline is occurring due to increased temperature. Some precipitation that used to fall as snow now falls as rain, and the snow that does fall melts more quickly.

Mote and Sharp studied the snow water equivalent* of the snowpack in April from 1955-2016 at SNOWTEL measuring stations operated by the U.S. Natural Resource Conservation Service. Figure 1 shows a map of the stations, with blue dots representing stations where the snowpack increased and orange dots representing stations where the snowpack declined. The size of the dots represent the magnitude of change.

It is easy to see that the vast majority showed declines in the snowpack, in many cases by as much as 80%. Overall, Mote and Sharp computed that there had been an average 23% decline in the western snowpack since 1955.

 

Figure 2. Observed and Modeled Change in Snowpack. Source: Fyfe, et al, 2017.

Fyfe and his colleagues conducted climate modeling to try to determine whether the decline in the snowpack was due to natural causes or human causes. Figure 2 shows the results in a rather complicated graph. Let’s unpack it. The computer models ran from 1950 to 2010. The dashed black line shows the observed trend in the snow water content. The solid blue line shows the projected snow water content if only natural climate causes are included in the model. It doesn’t fit the observed trend very well. The solid black line shows the projected snow water content if both natural and human climate causes are included in the model. It fits the observed data quite closely. (The pink and green lines show data from analyses using other sets of data and need not concern us here. The gray band and blue dotted lines show statistical confidence levels for the computer simulations, and also need not concern us here.)

The simulation that included both natural and human causes agreed with the observed data, but the one that included only natural causes did not. The authors concluded that natural causes could not explain the loss of snowpack in the West. A combination of human and natural causes could explain it.

Figure 3. Projected Short-Term Change in Snowpack. Source: Fyfe, et al, 2017.

Fyfe and his colleagues also conducted a suite of climate models to project snowpack loss into the future. The results are shown in Figure 3. In this graph, the y-axis represents the actual snow water content of the snowpack, not the change. The blue line represents the computer model that projected the least snowpack loss in 2030, and the red line represents the computer model that projected the most loss. It is common practice among climate modelers to run a suite of projections, and when this is done, the average of them is often also presented, and it is often taken as likely to be the most accurate. In Figure 3, the average of the projections is represented by the black line.

It is easy to see that the trend in all of the lines is down. There is considerable variation from point-to-point in the red and blue lines, indicating that the projections expect there to be considerable variability in the snowpack from year-to-year. The black line is pretty smooth, however, as might be expected from an average of several analyses, and it has a consistent downward trend. The losses in snowpack in some of the projections ran as high as 60%, though average loss across the suite of projections was about 30%.

A 30% decline in the snowpack does not sound so dire; after all the projections are for a 60% loss of snowpack in California (see here). However, that projection was for the end of the century. This projection is for 2038; that’s only 20 years from now.

Some may wonder about how little snow water equivalent is shown on the y-axis of Figure 3. In the 1990s, the snowpack maxed-out each year at only 6+ cm. of snow water equivalent. In thinking about this number, remember two things: first, a centimeter of water represents somewhere between 3 and 20 centimeters of snow, with an average value being somewhere around 10 cm. Thus, 6 cm. of snow water equivalent would roughly equal 60 cm. of snow, or 23.6 inches. Thus, the average depth of the snowpack was about 2 feet. Second, remember that the measurements were averaged across hundreds of locations; some were high and received a great deal of snow, but some were relatively low (low altitude means more rain, less snow), or were located in areas that don’t receive much precipitation of any kind.

Much of Missouri depends on the Missouri River as a water supply, including both Kansas City and St. Louis. The Missouri River gets much of its water from the western snowpack. A declining snowpack may, or may not, have implications for our water supply, depending on whether the reservoirs along the Missouri River can accommodate the shift toward earlier snowmelt and increased rain. I will look at this issue in the next post.

*   Snow water equivalent: Different types of snow hold different amounts of water. Thus, scientists don’t just measure how deep the snow is. Rather, at a given location they take a representative sample of the snowpack and melt it, thereby determining how much water it holds. This is the snowpack’s snow water equivalent at that given location. April is generally when the snowpack is at its maximum.

Sources:

Environmental Protection Agency. 2016. Climate Change Indicators in the United States: Snowpack. Retrieved online 5/22/2017 at https://www.epa.gov/sites/production/files/2016-08/documents/print_snowpack-2016.pdf.

Fyfe, John, Chris Kerksen, Lawrence Mudryk, Gregory Flato, Benjamin Santer, Neil Swart, Noah Molotch, Xuebin Zhang, Hui Wan, Vivek Arora, John Scinocca, and Yanjun Jiao. 2017. “Large Near-Term Projected Snowpack Loss Over the Western United States.” Nature Communications, DOI: 10.1038/ncomms14996. Retrieved online 5/14/2017 at https://www.nature.com/articles/ncomms14996.

Report Describes Ways Climate Change May Impact Health in the United States


Climate change will have direct impacts on human health. A recent report describes the kinds of impacts that might occur, and identifies populations that might be affected, but mostly doesn’t predict how rates of death or illness will change.


Source: USGCRP 2016.

Source: USGCRP 2016.

For some time climate scientists have been warning that climate change might have direct impacts on human health in the United States. A 2016 report, based on the National Climate Assessment completed in 2014, the U.S. Global Change Research Program writes that it will directly affect human health in 7 basic ways (see Figure 1).

(Click on graphics for a larger view.)

Each of these 7 ways is a summary of several different health impacts. For instance, the air quality chapter analyzes the impacts of changes in atmospheric ozone, airborne allergens, and exposure to indoor air contaminants.

In addition, the health effects of climate change are expected to impact susceptible populations more severely than others. For instance, those with asthma or COPD are likely to be more heavily impacted by changes in air quality than the general population.

The health effects of climate change will be related to exposure. For instance, regions where more people die of exposure to cold during the winter than heat during the summer may actually see a decrease in annual temperature-related deaths.

And finally, some of the health effects of climate change will be impacted by adaptation. Simple, every-day, and potentially life-saving examples of adaptation include heated buildings during the winter and air conditioned buildings during extreme summer heat. The more adaptive resources individuals and communities have, the more they will be able to mitigate some of the health effects of climate change.

In most cases, the state of knowledge has advanced to the point that health scientists can model predicted changes in exposure to some harmful effects. For instance, the chapter on water-borne diseases models extensions in the range of several water-borne bacteria that will be caused by climate change. However, only in two cases has knowledge extended to the point where health scientists could model the change in the number premature deaths: direct temperature-related exposure and ozone exposure.

Source: USGCRP 2016.

Source: USGCRP 2016.

Two kinds of temperature cause temperature-related death: cold during the winter, and heat during the summer. Climate change is expected to cause warmer winters, leading to a reduction in cold-related deaths. It is expected to cause warmer summers, however, leading to an increase in heat-related deaths. The net impact is shown in Figure 2: a net increase of about 4,000-10,000 nationwide, depending on the model used. The changes will occur predominantly in cities.

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Source: USGCRP 2016.

Source: USGCRP 2016.

Increased ozone levels are expected to cause an increase in ozone-related deaths, primarily in large urban areas (Figure 3). This is ground level ozone, not the antarctic ozone hole in the stratosphere. For a brief discussion of ozone, see this post. Ground level ozone comes primarily from burning fossil fuel, either in vehicles or power plants. Both St. Louis and Kansas City have significant ozone problems. Fortunately, the number of excess deaths is expected to be relatively low in most of the country (less than 2 per county) . The projection goes only through 2030, however, and the real impacts of climate change are not expected to kick in by that time. What may occur after that is not modeled in the report.

In this country 30-35,000 of us die in motor vehicle accidents each year. There were 73,505 non-fatal firearm injuries in 2013, and 33,636 fatalities. These statistics put the predictions from the USGCRP in perspective.

In summary, the report identifies ways in which climate change may impact health in the United States, and it models how changes may occur in exposure to important harm-causing factors. It does not describe very large health impacts, but the state of our knowledge does not yet allow for many certainties. There are going to be significant increases in exposure to potentially harmful conditions, but their eventual impact seems to remain unknown.

Source:

USGCRP, 2016: The Impacts of Climate Change on Human Health in the United States: A Scientific Assessment. Crimmins, A., J. Balbus, J.L. Gamble, C.B. Beard, J.E. Bell, D. Dodgen, R.J. Eisen, N. Fann, M.D. Hawkins, S.C. Herring, L. Jantarasami, D.M. Mills, S. Saha, M.C. Sarofim, J. Trtanj, and L. Ziska, Eds. U.S. Global Change Research Program, Washington, DC, 312 pp. http://dx.doi.org/10.7930/J0R49NQX.
Wikipedia. Gun Violence in the United States. Viewed online 11/17/2016 at https://en.wikipedia.org/wiki/Gun_violence_in_the_United_States.

Wikipedia. List of Motor Vehicle Deaths in U.S. by Year. Viewed online 11/17/2016 at https://en.wikipedia.org/wiki/List_of_motor_vehicle_deaths_in_U.S._by_year.

Vanishing Lake Mead

Lake Mead in Black Canyon shows the "bathtub ring" of bleached rock exposed by low water. Photo by John May.

Lake Mead in Black Canyon shows the “bathtub ring” of bleached rock exposed by low water. Photo by John May.

During my vacation, I passed through Las Vegas. Because Lake Mead is such an important part of the California water story, I drove out to see the famous “bathtub ring” for myself. I thought you might like to see some photos of what I saw.

Lake Mead is, indeed, low. As I write (10/22/15), the lake is at 1076 feet above sea level, 143 feet below full pool. It is the lowest level on this date for the last 10 years. By volume, the lake is 63% empty and 37% full. Since the lake was filled, the average elevation for this date is 1164, so it is 88 feet below its normal level for this date (Lake Mead Water Database).

The first photo at right shows Lake Mead in Black Canyon, just upstream of Hoover Dam. The pontoons in the water are to keep boats away from the dam. The rock is normally black. The white area is rock that has been bleached by the waters of Lake Mead. Normally, it is underwater. It is hard to get a sense of scale in this photo.

[Click on photo for larger view.]

At Hoover Dam, low water in Lake Mead has exposed bleached rock that used to be covered by water. Photo by John May.

At Hoover Dam, low water in Lake Mead has exposed bleached rock that used to be covered by water. Photo by John May.

The second photo shows the “bathtub ring” and part of the dam. If you look carefully, you can see a concrete structure on top of the dam to the left of the intake tower. A black car is passing in front of the concrete structure, and you can use it to get a sense of scale here. The water should come almost all the way up the dam.

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Large tracts of land have been exposed by the low water levels at Lake Mead.

Large tracts of land have been exposed by the low water levels at Lake Mead. Photo by John May

The third photo shows the Lake Mead Marina and the “beach” that has been exposed by the falling water. Full pool is just below the road that goes off into the distance. When the lake is full, most of the brown area below the road is covered by water.

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The old Las Vegas water intake has almost been uncovered by the low water level.

The old Las Vegas water intake has almost been uncovered by the low water level. Photo by John May.

The fourth photo shows the water intake for the Las Vegas Valley Water District. The district provides water to more than 1 million people living in the area (Wikipedia). As you can see, the water of Lake Mead usually comes to just under the structure on the end of the metal arm. But it is far lower now. In fact, it is so low that the end of the metal pipes, which function like straws in a glass of water, are in danger of being uncovered. On 9/24/15, the water district finished construction of a new intake pipe that has its intake some 218 feet below the lake’s current level (CBS News, 9/24/15).

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Las Vegas Bay, once pearched on a hill overlooking a scenic bay, is now about a mile from the water.

Las Vegas Bay Campground, once perched on a hill overlooking a scenic bay, is now about a mile from the water. Photo by John May.

The boat ramp at Las Vegas Bay is high and dry.

The boat ramp at Las Vegas Bay is high and dry. Photo by John May.

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The fifth and sixth photos show the area at Las Vegas Bay. This is a campsite and boat-launch area. As the fifth photo shows (left), the boat ramp is high and dry, no water to be seen anywhere. In the sixth photo (right), the sandy area at the bottom is the area just below the boat ramp. You can see the lake about a mile away around the corner, with a small creek coming up what is ordinarily the bay. About half way up the slope at right you can see a point at which whiter rock and sand below give way to darker rock and sand above. This is the normal level of the lake. Water usually covers everything, all the way across to the other side.

Hope you enjoy the photos.

Sources:

CBS News. 2015. Las Vegas Uncaps Lake Mead’s “Third Straw” for Water Supply. Viewed online 10/22/15 at http://www.cbsnews.com/news/las-vegas-uncaps-lake-meads-third-straw-for-water-supply.

Lake Mead Water Database. This in an online data portal providing information about the water level of Lake Mead. If you access this site, be careful about the date in the top heading of the webpage. For some reason, it does not seem to update properly, while the rest of the information seems to update properly. The date of the most recent measurement is given as the top value in the list of recent measurements. Accessed online 10/20/15 at http://lakemead.water-data.com.

2015. Las Vegas Valley Water District. Wikipedia. Accessed online 10/20/15 at https://en.wikipedia.org/wiki/Las_Vegas_Valley_Water_District.

Drought in California Part 14: A Scenario California May Follow

In Part 13 of this series, I reviewed the basic facts of California’s future water deficit as I understand them. Then I outlined 2 scenarios of how California might respond, and developed estimates of how each would affect the California economy. But I felt that both scenarios, while instructive, were probably not realistic representations of what California might actually do. In this post I develop estimates for a third scenario that I think is more realistic.

In developing a 3rd scenario, the most important question to be answered is how much desalination California will pursue. Desalinating water to cover the deficit in urban areas would be first priority, I believe. They consume the smaller fraction of water, economic activity is concentrated in them, and the largest ones are located close to the coast, where the desalination plants would have to be located.

Agriculture is a different story, however. As I discussed in Part 7, it is conceptually possible for California to desalinate sufficient water to cover the entire deficit. Now let’s think about some practicalities. The counties with the largest agricultural output are Fresno, Kern, Tulare, Monterey, Merced, Stanislaus, San Joaquin, Kings, Ventura, and Imperial.

The farming regions of Monterey and Ventura Counties are low-lying and are close to the ocean. The water would not have to be lifted a significant amount, and the pipeline to connect desalinated water into the water distribution system would not have to be excessively long.

The farming region of Imperial County is low lying – below sea level, actually. However, it is cut-off from the Pacific Ocean by the Peninsular Ranges, and it would be very expensive and energy intensive to lift the water over the ranges. The Imperial Valley is only about 80 miles from the Gulf of California. However, the 80 miles belong to Mexico. Thus, the desalination plants would have to be in Mexico, with whom significant conflict already exists over water from the Colorado River. Further, because the Gulf of California is not open ocean, the issue of whether the waste brine could be disposed of safely would become a larger concern.

The remaining 7 counties lie in the southern portion of the Central Valley. All are more than 50 miles from the coast. They are cut off from the coast by the Coastal Ranges except at one point: the San Francisco Bay Delta. We have noted the important role played by the delta in the delivery of water through the California State Water System and the Central Valley Aqueduct. Water coming down the Sacramento River empties into the delta and crosses the delta north-to-south to the Clifton Court Forebay, where it is pumped into the canals and aqueducts that deliver it to the San Juan Valley and Southern California. Theoretically, desalination plants could be located along the shore of San Francisco Bay. Sea water could be delivered to them from the Pacific Ocean through pipelines laid through the Golden Gate. The brine would be returned to the ocean in separate pipelines via the same route. Fresh water would enter pipes that travel into the delta, and eventually to the Clifton Court Forebay. From there, desalinated water would feed through existing infrastructure into the existing water distribution system. The system would not have to be greatly enlarged because the desalinated water would be replacing reduced supply. Many engineering challenges would have to be overcome, but none that seem impossible.

The problems involved in delivering desalinated water to agricultural areas would be political and environmental as much as they would be physical and financial: could the desalination plants be located and designed in such a way that they did not harm sensitive ecological areas? Could they be located in ways that did not harm the beautiful, high-priced coastal areas where they would be located? Could Mexico’s cooperation be secured?

So, the question becomes: would California choose to desalinate enough water to cover only the urban deficit, redirecting currently existing supplies to agriculture? There would still be an agricultural water deficit, resulting in the loss of farms and farm economy, though it would be smaller. Or would California desalinate enough water to cover the whole deficit?

In Part 14 of this series, I noted that estimates say that California can conserve or recycle 4.2 million acre-feet of urban water, representing 17% of the total deficit, but 48% of the urban deficit. I also guessed (and it was little more than an informed guess) that California had the potential to conserve 10% of agricultural water without affecting the economic viability of farms or reducing crop yields. This amounted to 2.8 million acre-feet per year, 11% of the total deficit and 15% of the agricultural deficit. This potential for conservation adds a complication to the question of how much water would California choose to desalinate: would California choose to minimize conservation and emphasize desalination, retaining a freer, less constrained lifestyle? Or would California choose to minimize desalination and maximize conservation, reducing the immense task of developing the infrastructure needed for desalination, with its associated costs, but constraining and degrading the California lifestyle?

If California chooses to desalinate sufficient water to cover the entire deficit, then the costs will be much as I discussed them in Part 5: $25.6 billion yearly. That is roughly equal to 23% of the annual state budget, or 1% of the annual gross state product. But, I believe that California will not do that. It will prove too difficult to build the infrastructure required to desalinate enough water to cover the entire 25.1 million acre-feet deficit I project for the future. It would need to occur at the same time that the world is transitioning away from fossil fuel to renewable energy, which is itself a massive infrastructure program. In addition to the solar farms that will be constructed for the transition away from fossil fuels, building solar farms to power the desalination plants would prove to be too much.

Scenario 3

In this scenario, California will emphasize conservation. That will reduce urban water demand from the current 8.8 million acre-feet to 4.6 million acre-feet. In this scenario, California will desalinate this much water, enough to cover all urban demand after conservation. Future urban water supplies from currently existing sources will be less than they are today, but by desalinating this much water, California will nevertheless free 2.8 million acre-feet of water from current sources to redistribute to agriculture. This water is currently being delivered to urban areas via the California State Water System, which flows through the Central Valley, California’s largest agricultural area.

The cost of desalinating this much water will be approximately $4.7 billion dollars.

With the additional 2.8 million acre-feet of supply, and with a 10% reduction in water demand due to conservation, the agricultural deficit will be reduced to 13.5 million acre-feet. This represents 53% of current agricultural water consumption, and I will assume that California will experience a 53% loss of its agricultural sector. In Part 13 of this series I noted that the annual sales of farm products was $46.2 billion, but because many other industries depend on agricultural production, the actual value of agriculture to the California economy is about $90.2 billion. Thus, a 53% loss would translate to about $47.8 billion in economic losses each year.

Add the cost to desalinate urban water and the agricultural loss, and the total becomes $52.5 billion. This is approximately equal to 2.2% of California’s gross state product. (I am equating the cost of desalination to a decline in economic output of equal size. This is not precisely correct, for desalination will result in the economic inputs of building and operating the necessary infrastructure. However, for the average Californian, the cost of water will simply increase. They will pay more, but receive no additional services. It will function similarly to a tax increase, or an increase in the price of oil. In addition, the amount involved is small compared to the losses in the agricultural sector.)

California GDP Growth 2007-2014. Data Source: Bureau of Economic Analysis.

California GDP Growth 2007-2014. Data Source: Bureau of Economic Analysis.

A 2.2% hit is a big hit. From 2007-2013 California’s GDP growth (in current dollars) averaged 2.7%. But measuring in current dollars means that some of the growth includes inflation. If you adjust for inflation, then over that period GDP growth has averaged 0.9%. (Bureau of Economic Analysis 2014a) Thus, a 2.2% hit would result in an average 1.3% decline in real GDP every year. And even if the effect of the water deficit were only half as large as I estimate, it would still result in an average yearly GDP decline of 0.2%.

Since a recession is often defined as two consecutive quarters of declining GDP, and depression is defined either as a recession lasting two or more years, or as a decline of 10% or more in GDP, the scenario I envision would certainly mean an ongoing recession in California, and eventually a full-blow depression (Wikipedia a, Wikipedia b). I will not go into detail regarding the effects of depression, they are terrible. But I will go so far as to say that unemployment will drastically increase, and people will be forced to leave the state to find work. At the same time, people will stop moving to the state, resulting in a net out-migration. It is almost certain that asset values will collapse, both due to the economic decline and the surplus resulting from the out-migration.

The agriculture sector will be hit the hardest, that seems clear. However, because many other industries depend on agriculture, and because urban water consumers will have increased water costs, the effects will be felt throughout the economy.

Now, some may argue that by selecting the years 2007-2013, I have biased the results. These years include the Great Recession, and California was hit hard. These people would argue that these years yield an unrealistically low estimate of annual GDP increase. I would reply that, as noted in Part 12 of this series, California’s economic growth has been in a long-term decline for almost 40 years. If one were going to project from the long-term record, then one might expect California’s GDP growth to slow to zero or contract, even without the effects of the water deficit.

Thus, it seems likely that the current drought, exacerbated by future declines in water supply due to climate change, will have serious and ongoing effects on California’s economy.

Sources:

Bureau of Economic Analysis. 2014a. Regional Data. http://www.bea.gov/iTable/iTable.cfm?reqid=70&step=1&isuri=1&acrdn=1#reqid=70&step=1&isuri=1. This is a data portal. For the current dollars data in this post, I selected GDP in current dollars, All industries, California, and 2006-2014. For the inflation adjusted date in this post, I selected GDP in chained 2009 dollars, All industries, California, and 2006-2014.

Wikipedia a. Depression (economics). Viewed 9/29/2015 at https://en.wikipedia.org/wiki/Depression_%28economics%29.

Wikipedia b. Recession. Viewed 9/29/2015 at https://en.wikipedia.org/wiki/Recession.

Drought in California Part 13: Some Options California Won’t Try

To figure out what effects the drought will have on California’s economy, one must guess how California will respond. First, let’s review a few facts that were developed in the previous parts of this series: by sometime around mid-century, California will face an annual water deficit that averages 25.1 million acre-feet each year, which represents about 39% of the state’s current water supply (Part 3). Agriculture consumes roughly 28.3 million acre-feet of water per year, 76% of California’s total consumption, while urban users consume about 8.8 million acre-feet, 26% of total consumption (Parts 6, 7 and 8). One can therefore attribute 19.1 million acre-feet of the deficit to agriculture, and 6 million acre-feet to urban consumers.

Urban conservation and recycling have the potential to conserve 4.2 million acre-feet of water per year. That would represent only 17% of the total water deficit, but it would represent 48% of the urban deficit. The analyses I read suggested this amount of water could be conserved without materially affecting the economy or quality of life in California, but I thought otherwise. Looking at the strategies seemed to make it clear that urban conservation at this level would make California more costly, and it would degrade the lifestyle for which California is famous. The result is that California would become a less attractive place to live (Part 8).

The potential of agricultural conservation was controversial, ranging from only 500,000 acre-feet per year to well over 3.4 million acre-feet per year. I felt the reality lay somewhere between the extremes, but probably closer to the lower estimate than the upper (Part 7). One can only guess what will actually be achieved, therefore I will assume that California will be able to reduce agricultural water consumption 10% without affecting the economy or crop yields. Since California’s farms consume 28.3 million acre-feet per year, that would represent 2.8 million acre-feet, about 11% of the total projected deficit, and about 15% of the deficit attributable to agriculture.

I concluded that the only strategy that could provide meaningful additional water was desalination. Desalinating enough water to cover the entire deficit is conceptually possible, but it would involve a massive infrastructure project that would have to overcome many difficult hurdles. It would also be expensive, with an annual cost of $25.6 billion dollars. That is roughly equivalent to 23% of the state budget, or 1% of the state GDP. (Note that these costs are annual – they would occur every year. See Part 5 of this series.) (Parts 4 and 5)

Scenario 1: Economic loss = $800 billion (35% of gross state product), 6.6 million people unemployed (44% of the workforce).

If California does nothing, then the state will suffer a 39% deficit in water supply. That is roughly equivalent to the scenario explored in the Seitman Foundation Study. You may recall from Part 11 that this study explored the economic consequences of a loss of Colorado River water to the 7-county region that receives it (which I am calling the CRWR). The Colorado supplies about 62% of the total water in the region (92% of agricultural water and 37% of urban water). The size of the water deficit my analysis envisions is about 63% as large as the loss envisioned in the Seitman Foundation Study. The Seitman Foundation Study concluded that losing water from the Colorado River loss would result in an economic loss equivalent to 55% of all economic activity in the CRWR, and 70% unemployment. The analysis used a linear model, so it can be extrapolated to the state as a whole: California would suffer economic losses equivalent to 55% x .63 = 35% of all economic activity, and 70% x .63 = 44% unemployment. Given that the Gross State Product is $2.31 trillion (Part 12) and total state employment is 15.1 million (Bureau of Labor Statistics, May 2014) the loss would amount to $800 billion of losses and 6.6 million people unemployed. It would be an economic catastrophe!

Well, we know California will NOT do nothing. It is an unrealistic scenario, they are already taking action.

California’s economic output is concentrated in its urban areas, agriculture accounts for only about 1.5% of California’s GDP. The same is true for population – the bulk of California’s population is concentrated in its urban areas. Thus, California may simply divert water from agriculture to urban consumption. There are a couple of ways it might be done, which would have only slightly different effects.

Scenario 2: Economic loss = $44.2 billion (1.9% of gross state product), 280,000 unemployed, plus unknown effects of higher food prices.

California could simply take water away from agriculture and divert it to urban areas by fiat. California’s current water withdrawals are 37.1 million acre-feet, of which about 8.8 million acre-feet represent urban consumption and 28.3 million acre-feet represent agricultural consumption. But with a 39% reduction in water supply, withdrawals could only be 22.6 million acre-feet. Covering urban consumption completely would leave 13.8 for agriculture, or 49% of current supply. This would mean a loss of about 49% of California’s farms. Since agriculture represents about 1.5% of the California economy, this would represent a loss of about 0.74% of the total California economy.

Losses would exceed that amount, however, because agriculture is closely linked to many other industries – food processing, farm equipment and supplies, financial services, textiles, and transportation, for instance. The total value of agriculture to the California economy was estimated at $90.2 billion in 2009. A 49% loss would equate to $44.2 billion, or 1.9% of California’s economic output at the time. Employment in agriculture and agriculture-related industries was estimated at 1.4 million jobs. If we imagine that 20% of those would be lost, then it would represent a 0.28% increase in unemployment statewide. (Agricultural Issues Center 2009) Agricultural areas would be hit the hardest. Most likely they would depopulate.

I’m not able to estimate the effect that a 49% loss of California farm production would have on prices. Most likely, food production from other states would compensate for some of the loss, but not all of it. It is likely that food prices would increase, and the effects would be greatest on those food products for which California dominates national production (grapes, wines, nuts, several fruits and vegetables). Higher food prices would act as a break on economic activity by reducing the amount of money people have to spend on other goods and services. The effects could be disastrous for low-income families.

During the Great Recession, the U.S. economy contacted by about 3% (Federal Reserve of St. Louis 2015). Further, the effect was brief: after 3 months GDP began growing again, and within 7 months it had surpassed its previous high. The economic hit we are discussing here would be smaller in size (1.9% vs. 3%), but permanent.

A different way that California could obtain the same end result would be for farmers to sell their water allocations to urban areas. If this were to work, then farmers who were selling water to urban areas could not have their water cut off. Some sort of legal arrangement would have to be worked out so that they received first priority on water deliveries. Thus, it would require abolishing the system of water rights that has been in effect for over 100 years. The water delivery numbers would be the same as those in Scenario 2: urban areas would remain completely covered, and about 49% of the current water supply to farms would be lost. The difference is that the farmers would be compensated for it, though farm-related industries would not. Farm workers and workers in related industries would still suffer unemployment. Agricultural regions would still suffer, and most likely depopulate. Thus, the benefits would not really flow to the farm workers or the farming regions, but rather be concentrated in the owners. With no reason to be on their farms, the owners might even live elsewhere. Urban areas would foot the bill for the water, and in this sense they would pay twice. The loss in farm acreage would still result in food price increases similar to those discussed above, but in addition, urban consumers would pay increased costs for water – perhaps significantly increased. Thus, the inhibiting effect on the economy would be even greater, though not possible for me to quantify.

I think Scenario 2 is also unlikely to occur. It doesn’t take into account the potential to obtain additional water from desalination, it doesn’t take into account the effects that the loss of 49% of California’s agricultural production would have on the food supply in the United States, and it doesn’t consider issues of fairness – it is unfair to concentrate all the hardship into one sector of the economy. Supplying sufficient water to urban areas will still remain a top priority, but a mix of strategies will be used.

In the next post, I will develop a 3rd scenario that I think represents a reasonable guess at what California might actually do.

Sources:

Agricultural Issues Center. 2009. The Measure of California Agriculture. Chapter 5, Agriculture’s Role in the Economy. Davis, CA: Agricultural Issues Center, University of California, Davis. Downloaded 9/14/2015 from http://aic.ucdavis,edu/publications/moca/moca_current/moca09chapter5.pdf.

Bureau of Labor Statistics. May 2014. “May 2014 State Occupational Employment and Wage Estimates: California.” Occupational Employment Statistics. Viewed online 9/15/2015 at www.bls.gov/oes/current/oes_ca.htm#00-0000.

Federal Reserve of St. Louis. 2015. Gross Domestic Product. Downloaded 9/14/2015 from https://research.stlouisfed.org/fred2/series/GDP#. This is a web page and data portal. The data can be downloaded by selecting the Export tab, and “Graph Data.”

Drought in California Part 12: The California Economy in General

This is Part 12 in my series Drought in California. It will focus on a few facts about California’s economy that will be needed if we are to construct an estimate of the economic impact of the drought.

California’s economy is usually described in superlatives. Gross Domestic Product (GDP) is the total output of goods and services in a region. When the region is a state, sometimes it is called State GDP, and sometimes it is called Gross State Product. California’s Gross State Product was $2.31 trillion in 2013. It is the largest Gross State Product in the United States, accounting for 13.35% of all economic output in this country. It is 40% larger than the economic output of the state in second place, Texas (Bureau of Economic Analysis 2014a). If California were a country, its GDP would rank as 7th largest in the world, behind only the United States, China, Japan, Germany, the United Kingdom, and France. (Wikipedia 2015a)

The industry sector group “Finance, Insurance, Real Estate, Rental, and Leasing” is the largest in California, with a 2014 output of $484 million, or 21% of the total. Next are “Professional and Business Services,” and “Government.” (Bureau of Economi Analysis 2014b) Agriculture is one of the smaller industry group, with a 2014 output of $34.8 billion, or 1.5% of total economic output. (I have been saying 2% in previous posts, due to the effect of rounding.) Agriculture, though a small part of the total economy, will be important for my economic analysis because of its outsize consumption of water.

Figure 35: California and United States GDP Growth, 1964-2014. Source: Bureau of Economic Analysis.

Figure 35: California and United States GDP Growth, 1964-2014. Source: Bureau of Economic Analysis.

Historically, California’s GDP has grown faster than that of the United States. Figure 35 compares growth in California’s GDP to that of the United States as a whole from 1964 to 2014. For California and the nation as a whole, GDP growth has fluctuated, but it has been positive except for the period of the Great Recession in 2008-2009. Sometimes California has grown faster than the USA as a whole, other times slower. However, over the whole time period, California has grown more rapidly 31 out of 51 years, and its average GDP growth outstrips that of the USA 7.09% to 6.70%. While a 0.39% difference doesn’t sound like much, in economic terms it is a significant advantage.

(Click on chart for larger view.)

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Figure 36: California and United States Decadal Population Growth, 1860-2010. Data sources: U.S. Census Bureau, 1996 and Undated.

Figure 36: California and United States Decadal Population Growth, 1860-2010. Data sources: U.S. Census Bureau, 1996 and Undated.

There are many reasons that California’s economy has grown robustly. One of the reasons is that California’s population has grown (Figure 36). For most of its history, California’s rate of population growth (blue bars) has significantly exceeded that of the USA (red line). California experienced an initial surge in population following the discovery of gold (the famous 49ers). It experienced a second surge during the 1930s, when the Dust Bowl caused huge numbers in the Midwest to seek a better life in the Golden State. Since then, however, California’s rate of population growth has been slowing, to the point that in 2000 it was approximately that of the USA as a whole, and in 2010, it was slightly less.

Now, the role of population growth in economic growth is controversial. The bottom line is that nobody has been collecting data long enough or reliably enough to settle the issue. Many factors other than population also affect economic growth, and without a lot of very reliable data over a long time, it simply is not possible to parse out the effects of each. Thus, people argue. Further, GDP is a measure of total economic output, not a measure of individual well-being. Companies want GDP to grow, because it tends to increase their revenues, and hence their profit. If they have significant debt, growing revenues can make it easier to pay it off. Governments tend to like GDP also, because growing GDP means increased tax revenues, making it easier for them to afford the services they are supposed to deliver. Growing GDP, even though it is not a measure of individual well-being, tends to be associated with well-being. Periods of shrinking GDP tend to be periods of depression, times of privation and hardship for many. However, it is at least conceptually possible for individual quality of life and well-being to be independent from GDP. (Coleman and Rowthorn 2011)

It is not possible to statistically relate California’s economic and population growth. However, it doesn’t take a rocket scientist to see that, when a state’s population grows by about half every 10 years, as California’s did for many decades, there will be a lot more people around. They will produce and consume goods and services in every increasing amounts, and the economy will grow. (So will the consumption of water, by the way, and that is part of the problem California now faces.)

There are no conclusions to be reached here, but the data suggests a question that is very important for our economic analysis of how the drought will affect California: how will the drought affect California’s population growth? Will the state continue to grow as before? Will growth slow, or even stall? In Part 11, I briefly recounted 3 stories; two involved cities where opposition to development had arisen because of the drought, and one involved a city devastated because the wells went dry. Add in the costs and inconveniences associated with water conservation and desalination, and put it all in the context of long term trends towards slower economic and population growth. Will the effects of the drought transition California to a long-term population decline, and how will that effect the economy?

Sources:

Bureau of Economic Analysis. 2014a. Regional Data. http://www.bea.gov/iTable/iTable.cfm?reqid=70&step=1&isuri=1&acrdn=1#reqid=70&step=1&isuri=1. This is a data portal. For the data in this post, I selected GDP in current dollars, Total output for all industries, All states, and 2014.

Bureau of Economic Analysis. 2014a. Regional Data. http://www.bea.gov/iTable/iTable.cfm?reqid=70&step=1&isuri=1&acrdn=1#reqid=70&step=1&isuri=1. This is a data portal. For the data in this post, I selected GDP in current dollars, All industries, California, and 2014.

Coleman, David and Robert Rowthorn. 2011. “Who’s Afraid of Population Decline? A Critical Examination of Its Consequences.” Population and Development Review. (37-Supplement), 217-248. Downloaded 9/12/2015 from http://onlinelibrary.wiley.com/doi/10.1111/j.1728-4457.2011.00385.x/epdf.

United States Census Bureau. 1996. Population of the States and Counties of the United States: 1790-1990. Downloaded from http://www.census.gov/population/www/censusdata/PopulationofStatesandCountiesoftheUnitedStates1790-1990.pdf

United States Census Bureau. Undated. Table 1. Intercensal Estimates of the Resident Population for the United States, Regions, States, and Puerto Rico: April 1, 2000 to July 1, 2010. Downloaded from http://www.census.gov/popest/data/intercensal/national/nat2010.html.

Wikipedia. 2015a. Comparison Between U.S. States and Countries by GDP (nominal). Viewed online 9/12/2015 at https://en.wikipedia.org/wiki/Comparison_between_U.S._states_and_countries_by_GDP_%28nominal%29.

Drought in California Part 11: Studies of the Economic Damage

This is the 11th post in my series on Drought in California. In Part 10 I reviewed some effects that drought can have on a region. In this post I will begin to quantify what those effects might be for California. First, a few examples to illustrate the issues:

Conflict has arisen in Dublin CA, over a new water park the city is building. The park will require 480,000 gallons to fill, and will have features that spray or dump water through the air, increasing evaporation. City officials already admit that they may have to mothball parts of it until the drought is relieved. Local residents worry that the city is spending millions to build a boondoggle that will be unusable because of the drought. Can California afford to have water parks at a time when its reservoirs are at historic lows (Nir 2015)?

Folsom Lake in 2011 and 2014. Source: California Department of Water Resources via NASA.

Folsom Lake in 2011 and 2014. Source: California Department of Water Resources via NASA.

Conflict has arisen in Folsom, California over proposals to build new housing developments. Folsom Lake, the local reservoir, is one of the poster children for the California drought (photo at right). The city manager argues that the drought is temporary, and that Folsom’s water rights will easily support the additional housing. But is the drought temporary? When current residents have been required to reduce water consumption by up to 34% in some locations, can the state support increased population, more housing, and the consequent increase in water consumption? On the other hand, if California stops building new housing, what will happen to the economy (Nagourney 2015)?

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Emergency Water Distribution Tank, East Porterville, CA. Source: Community Water Center.

Emergency Water Distribution Tank, East Porterville, CA. Source: Community Water Center.

East Porterville is a town of about 7,500 in the Central Valley. There is no public water system, and the people rely on wells, which started going dry last year. About 3,000 are now without water in their homes. An economically disadvantaged community, residents don’t have the financial resources to drill deeper. They struggle to cook, clean, and wash, begging a few gallons from neighbors that do have water. Health problems are on the increase. (Castillo 2015, Glenza 2015)

These stories illustrate the types of problems with which California will increasingly have to wrestle.

Many economic forecasts for California don’t seriously consider the drought. I found only two studies that focused specifically on its effects. Both focused on the agricultural sector. The Giannini Foundation Study (Hanak and Mount 2015, Medellin-Azura et al 2015, Howitt, Medellin-Azuara, MacEwan, Lund, and Sumner et all 2015, Sumner 2015, and Howitt, MacEwan, Medellin-Azuara, Lund, and Sumner, 2015) focuses on the entire Central Valley. The Fresno State Study (Zelezny et al 2015) focuses on the San Joaquin Valley, the southern 2/3 of the Central Valley.

These studies conclude that in 2015 the economic effects of the drought on the agricultural sector are being mitigated by some factors that act like buffers. The most important is that farmers are substituting groundwater for their lost surface water. Although this results in increased costs, it mitigates the drought’s effects. In a sense, by building so many reservoirs, California has adopted a similar buffering strategy, allowing the state to draw down the reservoirs during times of drought. A second factor involves crop switching, though in exactly the opposite direction discussed in Part 7 of this series. The most profitable farm products, nuts and grapes, require more labor than do field crops like alfalfa and corn. Farms with secure water rights are switching to nuts and grapes, even though they are more water intensive. As a result, it is buffering the loss of farm jobs occurring because of fallowed land. The authors also noted that, as arcane as the current system of water rights is, it allows senior water rights holders with lower value crops to sell their water to farms with higher value crops. Thus, alfalfa growers, if they have senior water rights, can fallow their fields and sell their water to almond growers.

I should make an aside here that the same system allows farmers with senior water rights to sell their water to urban areas that have water shortfalls. In fact, some water systems in Southern California already purchase water from farms to supplement their supplies.

Overall, the studies estimate that the drought will result in $2.6 to $3.4 billion of lost economic output in 2015. California’s gross state product in 2013 was about $2.2 trillion, so the loss would represent less than 0.2% of California’s total economic output. The studies estimate that the drought would cause the loss of about 18,600 farm jobs and 564,000 idled farm hands. Regional unemployment is high, ranging from almost 10% to almost 14% in the San Joaquin Valley, but it is due to the continuing effects of the Great Recession, not the drought. Even though crop switching has reduced the loss in farm jobs, the number of farm workers decreased to 169,000 in 2014, from a high of 192,000 in 2010 (a decrease of 12%).

While locally the impact may be severe, as in East Porterville, the impact is small on the scale of the whole state. The effects of the drought are so small for two reasons. First, the two studies consider the drought as an isolated one-year event. They both emphasize that, if the water shortage continues, the economic effects will become much more dire, but neither study does the analysis. Second, the studies consider only one region of the state. The regions of highest economic activity lie outside the area studied, and are not included.

This series has emphasized, however, that drought affects the entire state, and it is likely to become the “new normal” in California. In the future California will face an annual deficit of 25.1 million acre-feet, or 39% of its annual dedicated water supply. Over time, the buffering strategies described above are likely to be exhausted: you can’t draw down aquifers and reservoirs forever, at some point they go dry; you can’t sell your water allocation if it has been cut off; you can’t switch to nuts and grapes if there is no water for them.

I found only one study that looked at the economic consequences if a region of California lost a significant portion of its water, and the loss was not buffered or replaced by other water sources. This study (the Seidman Foundation Study) asked what the economic consequences would be if water from the Colorado River was lost. It considered the 7 states that depend on water from the Colorado River, but in California it considered only the 7 Southern California counties that receive Colorado River water: Imperial, Los Angeles, Orange, Riverside, San Bernardino, San Diego, and Ventura (which I will call the Colorado River Water Region, or CRWR) (James et al 2014). This region includes two of the largest producing agricultural counties in the state, Imperial and Ventura, but it also includes huge metropolitan areas: Greater Los Angeles and San Diego. The Colorado River accounts for about 92% of agricultural water supply, and 37% of municipal water supply in the CRWR.

The study found that if Colorado River water were cut off for a year, the CRWR would suffer $657 billion in economic loss. This loss would represent 55% of the regions total economy! The sectors with the largest losses would be real estate and rental, public administration, and healthcare-social services. The sector with the smallest losses would be agriculture-forestry-fishing-hunting – the percentage of loss would be high, but the raw amount would be small because the sector is such a small part of the overall economy. Job losses would total over 7 million. Since employment in the CRWR is 10 million (California Economic Development Department 2015), the loss of employment would be a staggering 70%!

I want to note two aspects of the study. First, it assumed that the lost Colorado River water would not, and could not, be replaced. Second, the study used a linear model, whereby the effects on the CRWR would be proportional to the amount of water lost. That is, if 10% of the Colorado River water were lost, the effects would be 10% of the total. If 50% were lost, the effects would be 50%. These characteristics will make this study useful as a basis to extrapolate to all of California.

Thus, the data suggests that the economic effects of the drought have not yet been particularly severe because buffering strategies have mitigated them. Without the buffering strategies, the effects may well have been severe. However, buffering strategies are unlikely to be useful under the scenario that I envision.

Since no published studies exist that directly address the question, in the next post I will begin the process of constructing an estimate of the economic losses the future water shortage will cause in California.

Sources:

California Department of Water Resources (photo). 2/25/14. Drought in Folsom Lake, California. Via NASA, https://www.nasa.gov/jpl/multimedia/california-drought-20140225/#.VdYLrHtpey0.

California Economic Development Department. 2015. Labor Force and Unemployment Interactive Map. Webpage accessed 2015-09-01 at http://www.labormarketinfo.edd.ca.gov/LMID/Geographic_Information_Systems_Maps.html.

Community Water Center (photo). Emergency Water Distribution Tank, East Porterville CA. Downloaded 9/2/2015 from http://www.communitywatercenter.org/drought.

Castillo, Andrea. 2015. “Drought Disaster in East Porterville Turns to Budding Health Crisis.” Fresno Bee. 6/20/15. Accessed online at http://www.fresnobee.com/news/state/california/water-and-drought/article25023559.html.

Glenza, Jessica. 2015. “The California Town With No Water: Even An ‘Angel’ Can’t Stop the Wells Going Dry.” The Guardian. 4/20/15. Accessed online at http://www.theguardian.com/us-news/2015/apr/20/east-porterville-california-drought-bottled-water-showers-toilets.

Hanak, Ellen and Jeffrey Mount. 2015. “Special Issue: The Economics of the Drought for California Food and Agriculture.” Agricultural and Resource Economics Update, Giannini Foundation of Agricultural Economics. Downloaded 8/26/2015 from http://giannini.ucop.edu/media/are-update/files/issues/V18N5_g9jdEzd.pdf.

Howitt, Richard, Duncan MacEwan, Josue Medellin-Azuara, Jay Lund, and Daniel Sumner. 2015. Preliminary Analysis: 2015 Drought Economic Impact Study. Downloaded 8/26/2015 from https://watershed.ucdavis.edu/files/biblio/2015Drought_PrelimAnalysis.pdf.

Howitt, Richard, Josue Medellin-Azuara, Duncan MacEwan, Jay Lund, and Daniel Sumner. 2015. “Economic Impact of the 2015 Drought on Farm Revenue and Employment.” Agricultural and Resource Economics Update, Giannini Foundation of Agricultural Economics. Downloaded 8/26/2015 from http://giannini.ucop.edu/media/are-update/files/issues/V18N5_g9jdEzd.pdf.

James, Tim, Evans, Anthony, Madly, Eva, and Kelly, Cary. 2014. The Economic Importance of the Colorado River to the Basin Region. Phoenix, AZ: Seidman Research Institute, Arizona State University. Downloaded 8/26/2015 from http://seidmaninstitute.com/protect-the-flows.

Medellin-Azuara, Josue, Duncan MacEwan, Jay Lund, Richard Howitt and Daniel Sumner. 2015. “Agricultural Irrigation in This Drought: Where is the Water and Where Is It Going?” Agricultural and Resource Economics Update, Giannini Foundation of Agricultural Economics. Downloaded 8/26/2015 from http://giannini.ucop.edu/media/are-update/files/issues/V18N5_g9jdEzd.pdf.

Nagourney, Adam. 2015. “Losing Water, California Tries to Stay Atop Economic Wave.” New York Times, 8/19/2015. Retrieved online at http://www.nytimes.com/2015/08/20/us/losing-water-california-tries-to-stay-atop-economic-wave.html?ref=earth.

Nir, Sarah. 2015. “California Town, United by Drought, Is Split Over New Water Park.” New York Times, 8/15/2015. Retrieved online at http://www.nytimes.com/2015/08/16/us/california-town-united-by-drought-is-split-over-new-water-park.html.

Sumner, Daniel. 2015. “California’s Severe Drought Has Only Marginal Impacts on Food Prices.” Agricultural and Resource Economics Update, Giannini Foundation of Agricultural Economics. Downloaded 8/26/2015 from http://giannini.ucop.edu/media/are-update/files/issues/V18N5_g9jdEzd.pdf.

Zelezny, Lynette, Xuanning Fu, Gillisann Harootunian, David Drexler, Antonio Avalos, Ndeil Chowdhury, Fayzul Pasha, Samendra Sherchan, Jes Therkelsen, Chih-Hao Wang, David Zoldoske, Sargeant Green, and Cary Edmondson. 2015. Impact of the Drought in the San Joaquin Valley of California. Downloaded on 8/26/2015 from http://www.fresnostate.edu/academics/drought.

Drought in California Part 10: How Drought May Affect California’s Economy

This is the 10th post in my series on Drought in California. The previous posts have all focused on the physical reality: how much water will it have in the future, what is the projected deficit, what are California’s options for obtaining additional new water, and what are California’s options for using its water more efficiently. This post will start to focus on what the economic and social consequences might be. In the introduction to the series, I noted that my motivation for writing the series came from a family member who was considering moving to California. I love California and the California lifestyle, but was this a smart move, I wondered, or was it like moving to Oklahoma at the opening of the Dust Bowl? So my analysis will be focused around that issue: what is likely to happen to the employment situation in California, what is likely to happen to property values, and what is going to happen to the vaunted California lifestyle? This post will provide some of the background that will be necessary to try to answer those questions.

I could find no studies that projected the economic consequences if drought became the “new normal” in California. Most economic forecasts I found didn’t mention the drought at all. Those that did tended to consider the drought as a temporary phenomenon – they forecast economic consequences of the drought for 2015. Thus, I will have to construct my own analysis. In this post, I will focus on some background that will be needed.

At the beginning of each post, I have noted some of the problems in conducting an analysis of the kind I am attempting. I wrote about them in the introduction to this series, and I recommend you read that discussion. The problems are even magnified in discussing how California might manage its water problem and what the consequences might be. One reason is that it introduces future economic conditions into the discussion. Another is that if studies of the physical situation were hard to find, studies analyzing the economic situation are even harder to find. A third is that it involves trying to track how changes will ripple out from the sector of their direct impact to affect other aspects of life in California. But most importantly, it involves trying to anticipate what people will or won’t do, and people are highly unpredictable.

Drought may affect California in many ways:

  •  Farms. Production may be reduced and expenses increased. Farm employment may be reduced. Reduced operating income may force farmers to sell or abandon assets. Farms may fail, with the accompanying social dislocation for the farm family living there. Farmers or farm workers may migrate away from the droughts.
  • Farming Communities. Many rural communities depend on farming for their economic base. Reduced farm income may result in reduced income and increased unemployment that ripples through the community via suppliers, retailers, service providers, and financial institutions. Community members may migrate to regions with better economies.
  • Other Rural Communities. Many rural communities derive their water supply from wells. Drought may cause a lowering of the water table, causing a decline in potable water quality plus a complete loss of water supply to some homes and communities. These problems with the water supply may cause a reduction in all kinds of economic activity, plus an increase in waterborne illness. There may also be an increase in illnesses related to dust.
  • Fire. Dry conditions may lead to an increase in fires. In forest land, this may lead to reduced economic activity in the timber industry, and to declines in the recreation industry. In populated areas, it may lead to loss of businesses or homes.
  • Electric Power. Utilities may see reduced hydroelectric generation due to low reservoir levels and/or curtailed water releases. Utilities may also be forced to curtail generation at thermal electric plants that use water for cooling (coal, nuclear), as water supplies decline or become too warm to keep the plant operating at full capacity. Power prices may increase.
  • Wildlife. Habitat for fish, plants, and animals may be destroyed, leading to loss of the fish, plants, and animals. Some of the fish, plants, and animals are themselves the basis of economic development, which would also be lost.
  • Water Bodies. Water levels in reservoirs, lakes, ponds, rivers, and streams may be lower. This would have direct effects for the area adjacent to the water body, but it would also have effects on species that depend on the water body, including humans that use it for water supply and recreation.
  • Soil. Drought may lead to increased erosion, leading to loss of soil quality. Many desert areas have become completely denuded of soil.
  • Construction. Drought may cause restrictions on new housing or commercial construction, which would ripple outward through reduced employment in the construction industry. It may make housing less attractive to potential buyers, or it may cause shifts in the attractiveness of regions depending on their access to water. Asset values may decline, and the effects would ripple outward through the financial services industry.
  • Increased Expenses. Prices may rise for food and other items, as production declines as a result of the drought. Costs may increase via attempts to supplement declining water supplies and via attempts to conserve water. These effects would be felt throughout all sectors of the economy.
  • Reduced economic activity and declining asset values may result in declining tax revenues for state and local governments, including schools. Yet government expenditures may need to increase due to effects of the drought. The result may be a reallocation of funding from current programs or higher taxes.
  • Life Style. Increased expenses for basics may leave less income surplus for amenities and recreation. Water conservation strategies may alter amenities and recreational opportunities, or cause their loss altogether. Water conservation strategies may make multiple aspects of life more complex or more difficult.
  • Mental Status. Drought may cause anxiety or depression about the future and about economic losses.
Is this what's in store for California? Dust Bowl, Dallas, South Dakota. Work found at https://en.wikipedia.org/wiki/File:Dust_Bowl_-_Dallas,_South_Dakota_1936.jpg .

Is this what’s in store for California? Dust Bowl, Dallas, South Dakota. Work found at https://en.wikipedia.org/wiki/File:Dust_Bowl_-_Dallas,_South_Dakota_1936.jpg .

The above list comes from a variety of sources, but the principle one is from the National Drought Mitigation Center (2015). A few of the items on the list are localized. Most of them, however, would be widespread effects that would affect entire regions, if not the entire state. While it may be argued that each individual effect is small, they add together and interact in ways that can make the cumulative effect devastating. Lest anyone doubt that truth, I repeat at right a photograph of the Dust Bowl that I ran in the Introduction to this series. During the Dust Bowl, 500,000 Americans were left homeless, 3.5 million people migrated out of the Plains states. In some regions 75% of the top soil was blown away, the value of farmland declined by up to 28%, and in heavily affected regions the economic losses were never recovered (Wikipedia 2015).

In the next post I will discuss how the effects might play out in California.

Sources:

National Drought Mitigation Center. 2015. Types of Drought Impacts. Downloaded 8/26/2015 from http://drought.unl.edu/DroughtforKids/HowDoesDroughtAffectOurLives/TypesofDroughtImpacts.aspx.

Wikipedia. 2015. Dust Bowl. Accessed online 8/27/2015 at https://en.wikipedia.org/wiki/Dust_Bowl#Human_displacement.

Drought in California Part 9: Summary of the Water Deficit and Strategies to Cover It

This is the ninth post in my series about drought in California. The previous posts have appeared once weekly over 8 weeks, so perhaps it is time for a recap and summary of what is known about California’s water deficit and the strategies that might be used to cover it.

California faces a serious water deficit, both right now and in the future. There are regions in California that receive a lot of precipitation, but much of the state is dry. Even in the wet areas, the bulk of the precipitation falls during the winter, while the spring, summer, and fall are dry. The vast majority of people live in the dry regions of the state. California has thrived by developing one of the most extensive water collection, storage, and transportation systems in the world. This system diverts surface water from Northern California, the Sierra Nevada Mountains, and from the Colorado River. In addition, California pumps groundwater out of its aquifers, the largest and most important of which is the Central Valley Aquifer. Seventy-six percent of the water is delivered to California’s agricultural areas, where it is used for irrigation, and 24% is delivered to its urban areas, where it supports the famous lifestyle for which California is famous.

Estimates of the size of the current California water deficit vary, but the best sources I could find suggest that it may be more than 6 million acre-feet per year. The deficit is covered by draining down both aquifers and surface reservoirs. Part of the shortfall in water has been caused by development. The population of California has skyrocketed, and so has agricultural consumption of water. Most projections expect California’s population to continue to grow, and thus, the water deficit will grow.

However, climate projections suggest that California’s water supply will decrease in the future. In California, much of the winter precipitation falls as snow in the mountains. The California snowpack is particularly important because it serves as the state’s largest “reservoir,” storing water during the winter and releasing it slowly during the rest of the year. This slow release is essential, because it allows the maximum amount of water to nourish vegetation, recharge aquifers, and be collected into reservoirs. Unfortunately, climate projections suggest that by mid-century California’s snowpack will decline by 40%. Such a decline would significantly reduce the water supply.

I found no studies that included climate change in their calculations of California’s future water deficit, so I constructed my own. I calculated that California’s future water deficit will be 25.1 million acre-feet, which is about 39% of California’s current water supply. The most important cause of the deficit will be the decline in the snowpack. The second most important cause will be the projected increase in population.

Theoretically, California could cover the projected deficit by obtaining additional water supplies or by reducing consumption. The possibilities for gaining additional water to cover the deficit include finding additional groundwater resources, diverting additional rivers either inside or outside of California, and desalination. The possibilities for reducing water consumption include reducing the population, reducing the amount of water used to sustain the environment, reducing agricultural consumption, and reducing urban consumption. Whether any of these hold any practical potential is hard to know. But even theoretically, only desalination, agricultural conservation, and urban conservation seemed to hold any potential; the other possibilities seemed unfeasible.

California’s groundwater system has been extensively mapped. The system is already being depleted, and it is unlikely that new aquifers will be discovered.

All but a few of California’s surface rivers have already been impounded and tapped. Looking at the few that have not been impounded revealed very significant problems that would make impounding them difficult, expensive, and highly objectionable.

The possibility of importing water from rivers out-of-state, like the Columbia River, would require a huge public works project to bring the water to California, and then re-engineering and rebuilding the existing California water distribution system to handle the increased capacity. It seemed impractical.

Desalinating enough water to cover the deficit would require the construction of many desalination plants, plus the infrastructure to distribute their water. In addition, it would require the construction of new electricity generation and storage facilities to power them. There would be a nightmare of problems that had to be overcome, and the cost would be high, but it did not seem impossible on the face of it. I wasn’t sure what context to put the cost in, but I calculated the annual cost to be roughly equal to 1/4 of the entire state budget, or 1% of the gross state product.

The notion of reducing population to reduce water consumption was felt to be unrealistic. It is typically abhorrent to governments and to the business community, as fewer people mean lower tax receipts and lower sales. I felt that California might eventually depopulate, but if it does, it would be because people migrated away on their own, not because of a policy choice by the state.

Diverting additional water away from the environment was felt to be impossible without causing severe damage. The environment in California has already suffered significant degradation due to water diversion. For instance, salt water is intruding into the San Francisco Bay Delta, and they are having to build an emergency barrier to try to prevent it.

Because agriculture consumes 76% of California’s water, it is the natural place to look for reduced consumption. I found some sources that suggested consumption could be significantly reduced using a few simple strategies, but other sources that suggested that the optimism was based on faulty analyses and fundamental misunderstandings. Estimates ranged from 0.5 – 3.4 million acre-feet. I felt the true potential lay somewhere between, but it was impossible to know precisely where. In any event, even at the full amount, it represents only a small fraction of the total deficit. I felt that ultimately water would be cut off from many California farms, causing many of them to fail, leading to significant unemployment and dislocation.

And finally, because California’s urban areas consume only 24% of California’s water, water conservation in urban areas can only make good a small percentage of the projected future deficit. Paired with strategies to recycle urban wastewater, it seemed that urban water consumption could make good up to 16% of the deficit. Each water saving strategy, however, saved only a small fraction of the amount that needs to be saved, required an up-front capital expenditure, required the acquisition of new knowledge and expertise, and contrary to claims, reduced the quality of service provided by the water. Thus, consumers would have to implement many strategies. Together, they would impose a noticeable, and possibly significant, burden that would meaningfully degrade the quality of life for which California has become famous.

Thus, California faces a very large projected future water deficit, and covering the deficit will not be easy. Only 3 of the potential solutions seem feasible: agricultural conservation, urban conservation, and desalination. Agricultural conservation and urban conservation are not sufficient to cover the deficit, either alone or in combination. Thus, it seems that California will have to implement some combination of all three.

The remaining posts in this series will attempt to look at how California might go about implementing such a combined program, and will discuss what the costs might be. I will finish with some discussion of how the drought and the attempts to make good the water deficit will affect California economically.