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Southwest drought can pack a hefty punch
Published May 24, 2006
The bare slopes in Arizona’s high country this winter said it all.
In the grip of one of the state’s worst droughts on record, business for Arizona’s ski resorts dried up with the weather for much of the 2005–06 season, financially squeezing the industry and some of its snow-dependent communities.
While the ski industry is one of the most visible victims of a dry spell that has taken hold of the Southwest, researchers at the University of Arizona (UA) say the drought likely will cost many millions of dollars if it persists, with the financial fallout extending to continued on page 4 agriculture, tourism, recreation, fire suppression, and property values in the months ahead.
“Unlike a tornado, drought is not flashy or obvious,” said Gregg Garfin, program manager of the Climate Assessment for the Southwest (CLIMAS) project at UA. “It relentlessly wears away at us and impacts the natural amenities we value and the water supplies we depend on. Tallying drought impacts is like watching a building collapse, only in slow motion.”
Before rain and snow pushed through the region on March 11–12, prompting Arizona ski resorts to re-open briefly, some areas of the Southwest had logged a record-breaking dry stretch. The recentprecipitation provided a brief respite from drought and La Niñainduced dry conditions, and could put a damper on the fire season, “but we still have a ways to go for even average streamflow,” Garfin said. Streamflow is the total amount of water that flows through river systems that helps replenish the water supply. La Niña, which developed late in the season, is a sustained cooling of sea surface temperatures in the eastern and central tropical Pacific Ocean and is associated with drier winters in the Southwest.
Pinning a dollar amount on the economic effects of drought can be difficult because researchers have to tease out climate variability from a number of other factors that play a role in the market, said George Frisvold, a professor in the UA Department of Agriculture and Resource Economics.
But Frisvold, a CLIMAS investigator, has shown that drought exacts a significant toll on revenue from nature-based tourism and water-recreation in the national parks in the Southwest, where roughly 26 million people annually converge to take advantage of the great outdoors, spending more than $1.3 billion in the surrounding communities in the process.
In a recent study, Frisvold and UA graduate student Srinivasa Ponnaluru found that lake levels, which are tied to drought, influenced the number of visitors to lakes in the region, including Lake Powell in the Glen Canyon National Recreation Area straddling southern Utah and northern Arizona.
Between 1999 and 2003, the level of Lake Powell fell 78 feet, and the number of hikers, boaters, anglers, and others who typically visit the park plunged with the shoreline, Frisvold said.
While only a relatively small percentage of the entire Arizona economy, Frisvold points out, “this employment and spending is quite important to local, rural economies, and there’s the multiplier effect. You put money into the pockets of people who live there, and they turn around and spend it. You’re generating more income than the original dollar spent.”
The researchers estimated that the decline from the 1999 lake levels cost the park about 212,000 visitors in 2003, leading to a $14 million reduction in local sales and a loss of about 300 jobs.
Drought-related wildfires also can pack an economic punch, beyond the obvious costs of battling the blazes. The Cerro Grande Fire in New Mexico, which began as a prescribed burn amid drought conditions in 2000, burned through 47,000 acres, cost nearly $570 million in disaster expenses and claims, and displaced more than 400 families, according to the Federal Emergency Management Agency. Frisvold and Ponnaluru estimate that 66,000 fewer people visited Bandelier National Monument because of the fire.
Other wildfires that have erupted during drought years have proven staggeringly expensive: The combined estimated cost of wildfires that tore through Arizona between 2002 and 2004 is $196.8 million.
Long term drought that kills native trees also can dampen property values, said Bonnie Colby, a professor in the UA Department of Agriculture and Resource Economics and CLIMAS investigator. In a study that looked at the quality of vegetation in Tucson’s washes, Colby found that homebuyers are willing to pay a 5 to 10 percent premium Figure 1. Lake Powell with low water levels in November 2004. Credit: R. A. Taylor for houses near “ribbons of green,” riparian areas lush with healthy, large trees like cottonwoods and mesquites.
Colby, who also studies how drought influences the market price of water, said cities sometimes turn to leasing water from farmers during extended dry spells, when demand and prices are higher. Some southwestern urban interests, which can include water providers, developers, multicity water districts, golf courses, and other businesses, are negotiating to lease water from agricultural areas.
Leasing also has economic implications for farm communities and related agricultural jobs; it leaves less water for growing crops and reduced economic activities linked to crop production, she said.
Within the agriculture sector, livestock bears the brunt of the drought because ranchers depend on rangeland conditions to graze cattle, explained Brian Hurd, an assistant professor in Agricultural Economics and Agricultural Business at New Mexico State University.
“For the state and rural economies, the livestock and ranching sectors are going to be hit pretty good as far as I can tell.” Hurd said, adding that he has not crunched the numbers. “When a drought happens, it hits the range grass really hard and reduces the amount of stocking that can be done. That puts upward pressure on supplemental feeding operations, like bringing hay and alfalfa out to the cattle. It gets expensive and it encourages ranchers to thin the herd.”
That creates a market surplus, which drives down the price of beef for ranchers. But once conditions improve and the ranchers want to replenish their stock, cattle are in short supply and more expensive, Frisvold said.
“So they are selling low and buying high,” Frisvold said. “The dynamics of that can really hit ranchers.” Cities and farmers have been buffered a bit from the effects of drought because they can pull from ground water and river basins. But if the drought intensifies and temperatures climb, hauling water to rural communities, leasing water from farmers, and generating power through a reduced Colorado River could carry a hefty price tag, researchers say.
“Big changes are coming if we continue on this trajectory. We won’t be able to do business as usual,” Garfin said. “Drought is a wake-up call. We don’t want to hit the snooze button because if we’re living like we’re waiting for climate change to happen, when it happens it’s going to be too late. We have to pay attention and use our water and resources wisely.”