How Water Scarcity Is Changing the Economics of the Southwest

The Colorado River provides water to seven states, contributing to an estimated $1.4 trillion in annual economic activity. But decades of decline, record-low snowpack and shrinking reservoirs have pushed the system toward crisis, with Lake Powell nearing levels that could threaten hydropower production. As key rules expire and states fail to reach a long-term deal, the federal government is stepping in with proposed cuts to lower-basin water use, hitting Arizona especially hard. Will the Southwest be able to survive on a shrinking Colorado River? (Source: Bloomberg)