How Water Scarcity Is Changing the Economics of the Southwest

The Colorado River, which supports $1.4 trillion in annual economic activity across seven states, faces a critical water crisis due to decades of decline, record-low snowpack, and depleting reservoirs like Lake Powell. Federal intervention is now necessary as states cannot agree on a long-term water-sharing solution, with proposed cuts disproportionately affecting Arizona and potentially threatening hydropower production. The Southwest's economic viability increasingly depends on adapting to a fundamentally shrinking water supply.