The True Value of Water

By David Modeer, General Manager, Central Arizona Project

The growing conversation regarding climate change – or at least the changes in weather patterns around the globe and throughout the U.S. – has led to a changed understanding about the value of water to both individuals and businesses. When you add the drought experienced in the West to the significant floods in other parts of the country, you start to understand why this change is taking place.



Our interest in water has gone beyond whether water is available when you turn on your faucet to get a drink, water your lawn or brush your teeth. There is now a greater understanding of the broad value of water. Water has become much more of an interest to everybody and influences decision making with regard to starting, expanding or relocating a business. 

This is the way we’ve looked at water for years at Central Arizona Project. We know water is extremely important to the end user, but we also realize it’s of vital importance to the economy. Without water, we’d have a much more difficult time attracting people to come and live here and to build the quality of life that attracts business. To that end, we worked with Arizona State University to ask them if they had a way to quantify the value of water to the state as a whole. What is the value to pumping water uphill into the interior of Arizona? The value proved to be significant—from 1986 through 2010 ASU calculated that CAP has generated in excess of $1 trillion of Arizona's gross state product (GSP).

Given the immense value of our water, there are those who actually say our water is too cheap. True, an acre-foot of water is less expensive in Arizona than it is in California, but it’s all quite relative. But when you change the price of water, you not only affect business, you also affect those in society’s lower income levels. There are those who also say that raising the cost of water would improve conservation. Studies and experience have shown that price is a harbinger of how much water people use. So, yes, that might be true, but again you need to take into consideration the total cost to society as a whole.

What is true is that it’s exceedingly important to manage our water resources – especially in light of the potential for shortage in these drought conditions. We do need to educate people that our water supply may not always be as plentiful.

CAP has been preparing to meet these challenges for years. Since 1997, we’ve been working with the Arizona Water Banking Authority to store Colorado River water in underground aquifers where it can be recovered during shortage. We also have been working with state agencies and other stakeholders to develop a plan for the recovery of that water. And, we have been actively engaged with the Arizona Department of Water resources, the other six Colorado River basin states and Mexico to address the long-term health of the system.

As issues related to the sustainability of our water supplies become more challenging, it’s difficult to predict how well we can alter what nature is providing. However, we can better control our management of these resources. However, we can better control our management of those resources. Being more aware of the value of the water we deliver presents opportunities that should not be overlooked. Our decisions must reflect that broader value to our economy and our society in general. It's an ideal opportunity for partnerships beyond our own communities and for bringing together disparate interests to ensure we all can have access to secure, reliable and reasonably-priced water supplies in the future.

Blog based on an excerpt from a soon to be published book titled The Value of Water - A Compendium of Essays by Smart CEOs.

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22, 2014


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