A new economic analysis by UC professors shows the high cost of inaction on California’s perpetual water supply challenges. It estimates that the state could lose enough water each year to supply up to 9 million households — with economic losses totaling between $3.4 and $14.5 billion per year, depending on the severity of the scenario.

The study, “Inaction’s Economic Cost for California’s Water Supply Challenges,” builds on prior research showing that California’s total water supply is on track to shrink by 12–25% by 2050, a loss of up to 9 million acre-feet per year, equivalent to one or two Lake Shastas.

The new report emphasizes that without coordinated state action, these reductions could result in 3 million acres of fallowed farmland, 67,000 lost jobs, and lasting damage to California’s agricultural and rural communities.

We’ve done the math—and the costs of inaction are high economically and environmentally." — Jay Lund

Authored by Jay Lund and Alvar Escriva-Bou of UC Davis and Josué Medellín-Azuara of UC Merced, the study identifies four major factors challenging California’s water supply system:

• Groundwater management: Implementing the Sustainable Groundwater Management Act will limit groundwater pumping.
• Climate change: Diminished snowpack is expected to reduce natural water storage.
• Environmental flows: Increased water is required to support ecosystems and combat sea-level rise, particularly in the Sacramento-San Joaquin Delta.
• Colorado River Reductions: Decreased allocations is expected to affect Southern California.

“We’ve done the math—and the costs of inaction are high economically and environmentally,” said Lund, a UC Davis professor of engineering and founding director of the Center for Watershed Sciences. “California urgently needs a long-term, statewide strategy to prepare for growing water challenges ahead.”

While conservation efforts remain vital, the research indicates they alone are insufficient to address the projected water deficit. New investments in stormwater capture, water recycling, desalination, and storage and conveyance infrastructure are also essential.

The report was commissioned by the California Municipal Utilities Association. Their May 13 press release is available at CaWaterForAll.com.