Study: Paying Farmers Best Method to Conserve Colorado River

TL/DR –

A study examining 462 federally funded Colorado River conservation and supply projects found that the most cost-effective way to conserve the river’s shrinking water supply is to alter agricultural water usage. The study revealed that agricultural conservation programs can conserve water for as low as $69.89 per acre-foot, significantly cheaper than local supply projects such as reservoirs and wastewater treatment facilities. In addition, these programs, particularly those offering financial incentives to farmers to reduce water use, have been successful in delivering water savings at a relatively low cost.

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Colorado River Water Conservation: A Look at Agricultural Usage and Potential Savings

The Colorado River’s water supply is rapidly decreasing due to persistent drought and population growth, presenting significant challenges for states that heavily rely on the supply. In light of these concerns, a comprehensive study has revealed a cost-effective and immediate solution: rethinking the way we manage agriculture, which currently accounts for approximately 80% of the river’s water usage. The study suggests that farmers could be incentivized not to use their full water allotment, which has proven to be a remarkably cost-effective strategy.

This study analyzed 462 federally funded Colorado River conservation and supply projects using spending data provided by the U.S. Bureau of Reclamation. The water projects assessed spanned a variety of sectors, from large-scale infrastructure investments such as reservoirs and wastewater treatment plants, to agricultural water use. These projects accounted for about $1 billion in federal funding from 2004 to 2024. The study’s findings were published last week in the Journal of the American Water Resources Association and were conducted by UC Riverside’s School of Public Policy in partnership with the Utah Rivers Council.

Comparing Costs and Water Savings

One of the key findings of the study was that not all water savings are created equal. Some projects can save water at a fraction of the cost of others, leading to increased efficiencies. For instance, water conservation programs within the agricultural sector were found to save water for as little as $69.89 per acre-foot. On average, such programs cost $417 per acre-foot, while local supply projects, including reservoirs and wastewater treatment plants, cost over $2,400 per acre-foot on average.

The study also revealed that paying farmers to reduce their water usage during non-critical periods was a common and effective approach, saving an average of 747 acre-feet per year at a cost of about $140 per acre-foot. Offering incentives to farmers to leave fields unused, especially those growing water-intensive crops such as alfalfa, also proved very effective, yielding average annual water savings of 17,500 acre-feet per year at an average cost of about $193 per acre-foot.

Looking Towards More Efficient Use of Funds

The federal government has historically spent about 30% of water conservation funding on agricultural projects. These projects typically have a lifespan of around three years, after which water savings are expected to diminish. Notably, a large portion of the funding used to incentivize farmers to conserve water was provided by the Biden-era Inflation Reduction Act, which helped double agricultural water conservation from 1.5 million acre-feet to over 3 million acre-feet.

Water recycling and treatment facilities also emerged as a cost-effective measure to save significant amounts of water over the long term, despite their higher initial construction costs. These facilities had an average lifetime cost of $385 per acre-feet and an average annual water savings of about 18,600 acre-feet. However, only about 7% of federal water conservation funding was spent on water reuse projects.

Disparities in Federal Funding and Opportunities for Improvement

The study revealed a disparity in federal funding distribution for water conservation projects between Upper Basin and Lower Basin states. Between 2004 and 2024, Upper Basin states, including Colorado, Utah, Wyoming, and New Mexico, received just 6% of overall water conservation spending by the U.S. Bureau of Reclamation. In contrast, Lower Basin states such as California, Arizona, and Nevada received about 75% of the funds, with the remaining 19% allocated to tribal areas.

The researchers argue there are opportunities to more efficiently use federal dollars to conserve water across the Colorado River Basin by reassessing funding priorities. One example is the Upper Basin state of Colorado, which received about $610,000 in federal funding for 47 water conservation projects, yielding average annual savings of about 2,100 acre-feet at a cost of about $285 per acre-foot. This contrasts sharply with Nevada, which received nearly $6 million for 28 water conservation projects, saving an average of 1,500 acre-feet per year at a cost of about $3,800 an acre-foot.

The study concludes that there is substantial potential for water savings through improved water recycling efforts and better targeting of agricultural conservation programs, especially in states with high water-intensive crop cultivation.

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