Can the Inflation Reduction Act Ease the Worst Drought in a Millennium?

Can the Inflation Reduction Act Ease the Worst Drought in a Millennium?

Record-low water levels and a “mega drought” not suffered in a millennium are causing people and states reliant upon Lake Mead and the Colorado River to take drastic measures. The Inflation Reduction Act, with its focus on tackling climate change issues, is hoping to alleviate the crisis.

Decades-long Drought the “New Normal”

Lake Mead and the Colorado River are created from melted snow flowing from the Rocky Mountains. Seven Western states, or basin states—California, Wyoming, Colorado, New Mexico, Utah, Nevada and Arizona—depend on this river water, as do 29 Native tribes and Mexico.

Lake Mead is a crucial water source for some 25 million people, but its levels are now at a mere 25%, its lowest since it began filling in 1937.

“We’re in what we’re calling now about the 23rd year of drought along the Colorado River,” Julie Hill-Gabriel, the National Audubon Society’s Vice President of Water Conservation, tells Political IQ. “In some ways we’re looking to acknowledge that when you have 23 consecutive years, it’s probably not really a drought condition anymore, it’s just the new normal under the impacts of climate change.”

Max Boykoff, Professor & Chair of the Department of Environmental Studies at the University of Colorado Boulder calls it a “mega drought,” the worst in over 1,000 years. “And there are lots of concerns about how long this is going to last,” he says. “But over 1,000 years, that’s conservative, sadly. Some are saying 1,200 years.”

Drought Impacting Food Prices

A new survey by The American Farm Bureau Federation (AFBF) found drought conditions in 60% of U.S. farmland—not just out West, but in the Southwest and the Central Plains as well—is causing 40% of American farmers and ranchers to make tough decisions, like killing off crops before they reach maturity and selling off heads of cattle. That’s up 24% from last year.

“Farmers are already facing increased costs, mainly because of higher fuel costs, and higher labor costs,” said George Conboy with the financial firm Brighton Securities. “That translates directly into higher food prices.”

Fruits, nuts, and vegetables come mostly from states with high levels of drought. According to the AFBF’s report, farmers compelled to forgo planting or destroy orchards “will likely result in American consumers paying more for these goods and either partially relying on foreign supplies or shrinking the diversity of items they buy.”

As much as 10% of Yuma County, Arizona’s $3.4 billion worth of lettuce, baby greens and other vegetable production are expected to be destroyed by the drought this year.

Inflation Reduction Act Puts Billions Toward the Drought

The Inflation Reduction Act, signed by President Biden on August 16, targets $4 billion to address the ongoing drought in the West, along with $20 billion in climate-smart agricultural practices.

“It is significant money,” notes Boykoff. “It is four times the amount of the monies that were put forward for similar challenges in Obama’s stimulus bill. This is a real inflection point that can help us avert some real problems ahead.”

Hill-Gabriel points out that the $4 billion for tackling drought gives priority to the Colorado River basin. “That is the only ecosystem and water system mentioned specifically. So it could go to other places, but the fact that that is the one place called out, it was really important.”

The legislation includes voluntary reductions in water consumption and conservation projects, but much of that $4 billion will also be used on projects to restore ecosystems and habitats impacted by the drought.

For example, Hill-Gabriel suggests, “Market supply interventions that can help incentivize shifting to lower water-use crops or modifying where certain crops are grown. The ones that are having the bigger challenge with access, maybe that’s not where you grow a super-high water-use crop.”

And this $4 billion will be added to more than $8 billion from last year’s bipartisan Infrastructure Law that’s been allocated specifically to focus on drought.

Boykoff also makes note of $27 billion being set aside by the Inflation Reduction Act for something called a “Green Bank.”

“That’s money that’s going to be available for a range of urban and rural communities to access funds to help offset and diminish the negative impacts of climate,” he says. “So that’s very important.”

States Cut Back Water Use, Look for Multi-state Solutions

Last week, after the basin states failed to reach a water reduction agreement, the Federal Government stepped in, mandating cuts to two of them—Nevada, which had to reduce its water from the Colorado River by 8%, and Arizona, which had to cut its use by a whopping 21%. Mexico has also cut its intake from the river by 7%. But officials fear more reductions will be needed.

On Sunday, Sen. Mark Kelly (D-AZ) said that his state was doing its part; it was time for others to step up. “Arizona has made an offer to put more and leave more water up in Lake Mead by far than any other states.”

U.S. Department of Reclamation is responsible for allocating the $4 billion in drought resources within the Inflation Reduction Act—and for the immediate management of conditions along the Colorado River and Lake Mead. The Department wants the basin states to find ways to right now to reduce between two and four million acre feet of water each.

“We’re hoping that if the states don’t come with an option, then Reclamation will come with a direction to the states,” says Hill-Gabriel. “But let them take a little more time to try to come to those agreements, layered with, ‘And by the way, here are more resources that are being brought to the table.'”

Conservation Groups to Feds: Be Smart, Think Long-term

Audubon and five other conservation organizations sent a letter to the Department of Reclamation and the Department of the Interior, shared with Political IQ, making recommendations about how to allocate the $4 billion. It included ways to “avoid speculation and profiteering” schemes, to which they say Western states are prone. The letter says the Department should take localized criteria into consideration when providing funding or granting contracts, regardless of price promotions or any potential “run on available water.”

In other words, don’t let the government (and our taxpayer money) get ripped off by con men.

“And from the conservation community, what we don’t want to see is things that are not really incentivizing adaptation,” says Hill-Gabriel. “If we are helping agriculture accommodate their yield while using less water it’s a win-win for everybody. If it’s just trying to find water from somewhere else without looking at innovation or ways of adapting to a dryer future, that’s going to have less of a long-term, sustainable path.”

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