4 | GLENN HEGAR, TEXAS COMPTROLLER OF PUBLIC ACCOUNTS EXHIBIT 3 ESTIMATED ECONOMIC IMPACT FROM DROUGHTS BETWEEN 2020 AND 2070 (IN MILLIONS OF DOLLARS) WATER USE CATEGORY ECONOMIC IMPACT 2020 2030 2040 2050 2060 2070 IRRIGATION Income Loss $843.90 $1,356.90 $1,319.00 $1,287.60 $1,258.80 $1,244.20 Job loss 13,107.50 19,484.30 18,909.30 18,440.50 18,012.70 17,791.40 LIVESTOCK Income Loss $2,196.20 $2,416.40 $2,679.70 $3,031.90 $3,452.60 $3,606.40 Job loss 46,399.60 49,843.60 53,736.20 58,536.70 64,300.70 66,300.40 MANUFACTURING Income Loss $19,192.40 $30,449.70 $35,692.90 $43,552.20 $50,379.70 $55,495.80 Job Loss 156,431.40 244,190.70 278,375.40 331,938.70 379,571.10 414,976.70 MINING Income Loss $67,239.00 $62,450.50 $48,627.10 $38,495.00 $27,513.10 $25,367.90 Job Loss 348,111.00 325,175.50 255,386.40 205,624.50 151,326.30 142,973.20 MUNICIPAL Income Loss $1,814.80 $7,165.50 $15,186.00 $23,348.20 $32,612.40 $42,027.60 Job Loss 34,159.70 117,943.20 244,065.20 373,512.50 520,802.90 671,445.90 STEAM-ELECTRIC Income Loss $6,878.20 $7,298.00 $7,627.70 $7,896.60 $8,125.30 $8,338.50 Job Loss 0.00 0.00 0.00 0.00 0.00 0.00 Source: Texas Water Development Board ECONOMIC IMPACT OF WATER LOSS TWDB indicates that by 2070, prominent water use categories (irrigation, livestock, manufacturing, mining, municipal and steam-electric) may experience income losses and job losses due to the anticipated decrease in the state’s water supply should water management strategies from the SWP not be implemented. Municipal water use is anticipated to experience more than 671,000 job losses by 2070, the largest number of job losses of all water use categories (Exhibit 3). Agriculture-related sectors are especially hard hit by water loss. The drought of record experienced in Texas was between 1950 and 1957, causing crop losses of more than $3 billion, or $27 billion in 2017 dollars. When adjusted for inflation in 2023 dollars, the total in crop losses is $34 billion. The worst drought in recent years occurred between 2010 and 2014, impacting 100 percent of the state and costing an estimated $17 billion in losses in 2011 alone. Texas’ cotton crop, for example, has experienced harvesting declines. The state’s most produced crop, accounting for nearly $2 billion in state exports in 2021, was estimated to experience a $2 billion loss of regional economic activity (before crop insurance) in the High Plains region of Texas in 2022, according to the International Center for Agricultural Competitiveness at Texas Tech University. Additionally, in 2022, farmers across the U.S., including Texas, were anticipated to plant their smallest crop of cotton since 2009, harvesting just 2.9 million bales — 62 percent less than in 2021. Drought conditions are expected to force farmers to abandon two-thirds of acres planted in 2023, a historic high abandonment rate, according to the U.S. Department of Agriculture. INNOVATIVE WATER CONSERVATION PRACTICES Water conservation includes innovative practices that reduce water consumption and improve efficiency to meet future demand; those highlighted by the American Society of Civil Engineers’ (ASCE) Report Card for America’s Infrastructure include technology relating to leak detection, seismic resilient pipes, smart water quality monitoring and real-time data sensors. The ASCE suggests that these innovative practices improve resilience of water systems by allowing utilities to Texas’ Water Demands Could Outpace Supply in Parts of Texas by 2070 What is the drought of record? The drought of record is the period when natural hydrological conditions provided the least amount of water supply. Generally, this also corresponds with high water usage rates. The drought of record is considered a reasonable benchmark for planning because it reflects quite severe, extended drought conditions (the worst experienced ever on record) and uses the best available, actionable science, grounded in historical data and patterns. Source: Texas Water Development Board 31 DEALERS’ CHOICE
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