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Study: Colorado River has $1.4 trillion economic impact on region

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WASHINGTON – Without water from the Colorado River, Arizona’s gross state product would drop by more than $185 billion in a year and the state would lose more than 2 million jobs, a new report claims.

The first-ever study, released Thursday by Protect the Flows, estimated the Colorado’s economic impact on the six states and seven Southern California counties that draw water from the river at $1.4 trillion a year.

A total of 16 million jobs in the region rely on the direct, indirect and induced economic benefits that the river brings, the report said. Those jobs ranged from recreation and agriculture, which depend directly on the river, to employment in industries that are less directly reliant, like health care, manufacturing and biotech.

The report tried to put the overall regional impact of the river in perspective by noting that it would equal one-twelfth of the nation’s gross domestic product – or three times the retail sales of Walmart in 2012.

“I think what this shows us is just how critical having a healthy river is to Arizona’s overall economy,” said Garrick Taylor, a spokesman for the Arizona Chamber of Commerce and Industry, which was not involved in the study.

The study was commissioned by Protect the Flows, a coalition of businesses in the region that rely on the river. It was produced by the L. William Seidman Research Institute at Arizona State University’s W.P. Carey School of Business.

The report looked at the gross state product, employment and labor income of the region: the states of Arizona, New Mexico, Nevada, Colorado, Utah and Wyoming, and the Southern California counties of Los Angeles, Orange, Imperial, Riverside, San Diego, San Bernardino and Ventura.

It also looked at the amount of Colorado River water consumed for agriculture and for municipal and industrial uses in those areas. Then it calculated what would happen to the economy if that water was not available for a year, and no substitute source of water was available.

Arizona, which draws 40 to 50 percent of its water from the Colorado, would see some of the sharpest impacts, edging Colorado in job losses and trailing slightly in declines to gross state product. Both states would lose just under 2.15 million jobs, but Colorado would lose an estimated $189 billion in economic activity to Arizona’s $185 billion.

Southern California, which draws up to 92 percent of its farming water and 37 percent of its municipal and industrial water from the river, would be the big loser. It would lose 7 million jobs and $657 billion in gross state product, the report claims.

An official at Protect the Flows said the report points to the importance of public policy that will help businesses create and implement strategies to improve water-use efficiency and conservation.

Many businesses in the river basin are already doing what they can to reduce their water footprint,  said Ann Tartre, director of corporate partnerships at Protect the Flows. But she said those efforts need to continue and be supported.

“We need help from policymakers to make it easier and simpler for businesses to implement some of these strategies,” Tartre said.

Taylor, of the Arizona chamber, said the report not only shows the impact of the river, but illustrates businesses’ interest in protecting the resource.

“You can be both pro-business and be pro-water conservation,” Taylor said. “It (the report) draws that direct link between the health of the Colorado River and the prosperity of the state and the region.”