Megadrought has huge implications for business: Action is needed

Despite California’s recent storms, the fact remains that the state, like the rest of the American West, remains in the grip of an ongoing megadrought, the driest 22-year period in the last 1,200 years. While these storms may have temporary eased drought conditions in California and replenished depleted water supplies, inadequate water infrastructure borders how much water can be captured and stored for drier periods than just flowing into the sea. In any case, According to according to the US Drought Monitor, California is still experiencing drought conditions, and some regions, such as the Imperial Valley, are experiencing drought conditions and water outages I persist. Outside of California, much of the West continues to dry out in a prolonged drought, and as the drought moves east, the Mississippi River dropped out considerably, while parts of the Missouri River are now at record low levels.

We are already seeing the serious impact this drought will have on our country, and it is clear that unless action is taken, this impact will only get worse. Apart from the obvious fact that we cannot survive without water, every industry and every job depends on sufficient freshwater resources. To adapt to the unfolding water crisis, state and local policymakers must use the array of federal funds and other policy tools provided by Congress and the executive branch to address this challenge head-on.

A critical question

Lakes Powell and Mead, reservoirs that provide water to millions of people in the West, are on critically low levels. Even with well above average snowpack in the headwaters of the Colorado River this year, it will have minimal effect on restoring these critical water supplies in the long term. Recently, a community outside of Scottsdale, Arizona got a water supply cut off due to dwindling water supplies from the Colorado River. Even after torrential rains earlier this year, at the time of writing, California grades that 386 water systems in the state are now failing and another 431 are at risk of failure – affecting nearly 2 million people. According to a new report on the impact of the drought on California, the amount of unused cropland in the state increased by an estimated 752,000 acres in 2022 compared to 2019, representing $1.7 billion in lost revenue. In Texas, cotton farmers were forced to fallow nearly 70% of all the cotton they planted in the state in 2022 – leading to a 21% drop in the US cotton crop, while nearly three-quarters of all US farmers (74%) reported being forced to reduce yields due to drought, According to to the National Farm Bureau Federation.

In addition to agriculture and drinking water, water scarcity will seriously affect other sectors. Water is a critical input to countless industries, from manufacturing to mining, and is needed in almost all forms of energy production. Without enough water, the data centers that power the digital economy will overheat, affecting countless areas of our economy and society. Unless decisive action is taken, this unfolding water shortage will have a devastating impact: food and clean water shortages, less reliable power grids, unstable digital servers and a crippled manufacturing sector. It is clear that as severe drought conditions continue, this will continue to have a huge impact on our country and the world at large. Serious action is needed.

States and localities are taking action

In many states and localities, a number of efforts are already underway. In Colorado, a renewed efforts is underway to expand cloud seeding to increase snowfall during the winter months, snowfall that feeds the critical Colorado River basin. A new desalination plant was built in Orange County, California approved last year, which will provide 5 million gallons of fresh water per day. In Nevada, politicians have guided for years in the implementation of water conservation policies such as water-efficient plumbing, water reclamation and reuse. In addition, aquifer recharge is required in many states more and more is seen as a vital way to restore natural underwater reserves during periods of heavy rainfall, while ensuring that water reserves do not simply evaporate during scorching summers. While none of these examples is a “silver bullet” to solving the water crisis, each is an example of the tools available to state and local policymakers.

Fortunately, significant federal resources are available to states and localities to implement policy solutions like these to address this water crisis. State and local policymakers should prioritize these resources to increase their water efficiency, such as water reclamation and reuse projects, and to secure more freshwater resources through the use of technologies such as cloud seeding and desalination.

What must be done

The Law on Investments in Infrastructure and Employment provides 8.3 billion dollars in water resilience funding for western states and localities through discretionary grants administered by the US Bureau of Reclamation. This includes significant funding for a range of applications, including funding for water recycling, desalination and water efficiency projects. This includes $1 billion for water recycling, $1.15 billion for water storage improvement projects, $1 billion for rural water projects and $250 million for desalination projects and studies. With these funds, countries can build desalination plants to increase the supply of fresh water to coastal population centers, use water more efficiently with upgraded water storage and water recycling systems, and provide farmers with the water resources they need need, through investment in rural water infrastructure.

Many states also still have ample funds available from the America’s Rescue Plan (ARP) Act. Locally, according to data from the National Association of Counties, the National League of Cities and Brookings Metro, cities and counties still have nearly half of their ARP allocations. Recently, Congress passed legislation as part of this year’s omnibus that allows states and localities more flexibility to use these COVID relief funds for infrastructure projects and disaster relief. States should take advantage of this new flexibility to use their COVID relief projects to counter the water crisis.

Finally, the president should declare a federal disaster for the ongoing megadrought to free up additional federal emergency resources for drought-stricken states, as a group of western governors have done previously requested. As the Western governors noted in their 2021 letter to the president, the Stafford Act specifically allows for a federal drought disaster declaration. Under the Stafford Act, an emergency declaration would allow the Federal Emergency Management Agency (FEMA) to deploy significant federal emergency resources for direct assistance to individuals and businesses, as well as public assistance to state and local governments and hazard mitigation assistance .

While the president did I declare disaster for the recent flooding in California, this assistance is limited to flood-related efforts and offers no assistance for the ongoing drought and the water crisis it has created. By declaring a federal drought disaster, the President can unlock these much-needed federal emergency resources for states and localities, as well as provide direct federal assistance to affected individuals and businesses to alleviate the damage caused by this ongoing natural disaster.

The United States is facing a truly epochal challenge: a water shortage not seen in more than a millennium. It is imperative that state and local policymakers use every available resource to implement policy decisions to use the water they have more efficiently and to increase the amount of fresh water available. At the same time, Congress and the White House must act to provide additional resources to states and localities. In doing so, policymakers at all levels of government can help build greater water resilience, ensuring that the United States can meet and overcome this challenge.

For the authors

Grant Baker

Associate Manager, Strategic Advocacy and State and Local Policy, US Chamber of Commerce,

Grant Baker is the Associate Manager for Strategic Advocacy and State and Local Policy at the US Chamber of Commerce.

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