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Economic Research

Will Southeast's Water Woes Become Water Wars?

photo of drought-stricken Lake Lanier
Photo by Brad Newton
Docks that once extended into Lake Lanier, north of Atlanta, now sit on its sun-baked shores as the water recedes because of the drought. The drought's hardships are hardly limited to Georgia; Lake Lanier's diminished capacity also affects residents, businesses, and wildlife in Florida and Alabama.

Water shortages in the Southeast are causing bigger problems than brown front lawns. In a fast-growing region, increasing demand for water and a constrained supply are squeezing regional economies.

As drought continued to parch the Southeast in late 2007, some areas in Georgia, Alabama, and Florida faced unprecedented water supply concerns. By November, the water shortages and restrictions had begun pinching landscape companies in Georgia and threatened to alter the operations of electricity-generating plants, paper mills, breweries, and other industrial facilities.

While the water shortage in some metro areas, such as Atlanta, escalated to a crisis, many experts warned that such problems likely foreshadow a future of scarce water in the Southeast that will demand deft planning and compromise. The economic impact of long-term water shortages could be profound because water is so central to daily living, power generation, and manufacturing.

Is the drought drying up economic growth?
Projecting specific potential economic effects of ongoing shortages and water management is difficult. But water supply problems could eventually restrict population growth and development in areas with the gravest problems, said Atlanta Fed economist Chris Cunningham, who studies the economic role of infrastructure.

Robin Kundis Craig, a professor at the Florida State University College of Law and an expert on water issues, doesn't expect an immediate groundswell of limited-growth sentiment among public officials in the Southeast, however. Ultimately, if water use is constrained for long, "it's difficult to justify continued development, especially high-impact development," she said.

During what is generally regarded as the region's worst-ever drought, the business community has started to worry. While climatologists and water experts predict more droughts, the current dry spell has laid bare not just the banks of lakes and rivers but also a welter of related economic and political dilemmas.

The Atlanta area's largest business organization, the Metro Atlanta Chamber of Commerce, sounded an alarm in mid-October. Sam Williams, the group's president, called the metro area's water shortage "the biggest and most imminent economic threat to our region." The group is pushing for a long-term, statewide water plan, which does not yet exist.

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Meanwhile, David Ratcliffe, Southern Co. chief executive officer and Federal Reserve Bank of Atlanta board member, wrote letters to the governors of Alabama, Florida, and Georgia expressing concerns that reduced river flows, already substantially lower than their norms, could force the company to alter operations at power plants that provide electricity to hundreds of thousands of people. In Georgia, thermoelectric plants are the biggest users of water, according to data from the U.S. Geological Survey.

"We do not have a breakdown of the impact on specific industries or any forecasting figures for what-ifs because it's really too early to tell," said Tanya Dunne, a Metro Atlanta Chamber spokesperson, in October. "The drought we're in right now is a wake-up call, and if not addressed it will put us at a disadvantage for growth as a region going forward."

Other areas with plentiful water can tout that resource when courting new industry. Indeed, Ron Littlefield, mayor of Chattanooga, Tenn., said officials there remind industrial prospects that the city has a healthy water source, even during scarcities elsewhere. "The drought has amplified and underscored the advantages we enjoy by the grace of God and the Tennessee River," Littlefield told the Chattanooga Times Free Press in October.

Few curbs on development so far
While proponents of growth are worried about the prospects for future growth in thirsty areas, most area governments had taken little action as of late 2007 toward curbing development in the Southeast. But Paulding County, Ga., an Atlanta suburb whose population swelled 49 percent, to 121,530, from 2000 to 2006, was an exception. In late October, the county commission froze rezoning applications, figuring new construction would further strain dwindling water supplies.

Some other area governments have also seen the need to restrain growth. The South Florida Water District now requires local governments to prove they will have sufficient water for proposed development, according to the Palm Beach Post.

Though water shortages have long been a more critical problem in the West than in the Southeast, the notion that scarcity could restrain growth is hardly new to some Southeastern planners. In October 1971, William Storch, then chief engineer for the South Florida Water District, cautioned a group of builders, "There is a limit to the number of people that South Florida can support through its water resources." Storch predicted that limited water meant some of those builders' plans could never get off the ground, the Post recalled in a July 2007 story.

Time has proved Storch largely wrong. Since 1971, the combined population of Palm Beach County and the two counties to the north, Martin and St. Lucie, has soared more than 280 percent, to 1.67 million, according to 2006 U.S. Census Bureau figures. Those three counties, plus Dade, home to Miami, and Broward, home to Fort Lauderdale, added about 575,000 people from 2000 to 2006, Census figures show.

Metro Atlanta has likewise continued to expand at breakneck speed as state legislative proposals to encourage water conservation have languished. From the end of 2000 through April 2007, according to the Atlanta Regional Commission, a planning agency, metro Atlanta's population swelled by 600,000, the equivalent of adding the metropolitan Charleston, S.C., population.

As water dries up, tensions rise
The ongoing drought has heightened long-simmering tensions over water suppliesÑamong states, counties, municipalities, and even industries. Georgia, Alabama, and Florida have skirmished over water in court for nearly 20 years. Alabama Gov. Bob Riley labeled the competing claims to the Chattahoochee-Flint-Apalachicola river basin "essential issues that go to the economic livelihood, safety and quality of life of people living downstream from Atlanta." Riley and Georgia Gov. Sonny Perdue have written dueling opinion pieces in the Atlanta Journal-Constitution and, along with Florida Gov. Charlie Crist, have taken their cases to federal officials.

During the fall of 2007, the dispute intensified over the volume of water the U.S. Army Corps of Engineers (USACE) was releasing from Lake Lanier, metro Atlanta's primary source of drinking water, into the Chattahoochee River through Buford Dam. Perdue maintained that the USACE was sending more than enough water downstream to support power plants and endangered species in Alabama and Florida and that the water comes at the expense of Atlantans' drinking water needs.

In mid-November, the U.S. Fish and Wildlife Service agreed to have the USACE reduce the amount of water released daily from Lake Lanier and other federal reservoirs into downstream waterways by about 6 percent through June 1, 2008. That reduced flow means more water in the lake to supply metro Atlanta's needs, and further reductions in releases could come if the Fish and Wildlife Service determines that federally protected mussels and sturgeon in Florida can survive the lower flows into the Apalachicola River.

These disagreements are inflamed by the ongoing drought, to be sure. But they demonstrate the problem that could become commonplace in the future as the Southeast struggles to divvy up a scarce water supply. Echoing many others, David Stooksbury, Georgia's state climatologist, said in October that weather forecasting models predict that 2008 will be even drier and hotter than 2007.

"Even when rains come back, this [widespread concern over water] is going to recur," said Graeme Lockaby, director of the Water Resources Center at Auburn University, citing the absence of long-term water management plans and disputes among states.

Water is too cheap
A fundamental problem with water is that it's cheap. "It's sort of absurd how little we pay for it," said Mark Risse, a water expert and professor in the University of Georgia's Department of Biological and Agricultural Engineering (see the interview ). He said consumers in the Southeast generally pay some of the cost of cleaning water and transporting it to the tap, but they essentially pay nothing for the water itself.

photo of drought-stricken Lake Lanier
Photo by Brad Newton

The Atlanta Fed's Cunningham noted that price is the single most effective means of encouraging water conservation. Low-flow or dual-mode toilets, front-loading washers that use much less water than top loaders, drought-resistant ground cover—all these features would become more attractive to homeowners if water were pricier, he believes.

He suggested that water authorities might consider flexible pricing: for example, coupling a higher initial rate with a rebate scheme that gives customers a credit on their bill based on their consumption. With this scheme, the average water user would pay about the same as before, the heavy user would pay more, and users who conserve would get money back.

As reservoirs dwindled in the last few months, some counties and cities in north Georgia began discussing pricing structures to encourage conservation, such as rebates for citizens who install low-flow fixtures. The city of Atlanta has now jumped on that bandwagon as well. Some cities and counties throughout the Southeast already employ rebates for low-flow toilets. A couple of state legislators in Georgia have vowed a renewed push for legislation to require more low-flow fixtures, but this sort of effort represents only one part of the issue.

Getting serious about conservation
If water use is to be a serious, ongoing consideration for citizens, it's likely users will not only pay more but will need more information. Homebuyers curious about water use in a new house might appreciate the equivalent of a miles-per-gallon sticker on a new car, Cunningham said. A home for sale could have a sticker on the front door outlining the annual projected water use.

If major shifts in conservation and pricing plans are going to happen, Southerners must change the way they think about water. Such a shift is unlikely to happen fast, experts said. Craig said one key change could come in the way public officials approach planning and zoning. Planners should consider water use the same way they think of land use in making development decisions, she recommended.

"I don't think people have changed from thinking 'This is a drought problem' as opposed to 'This is a long-term problem,' " Craig said. "And I think that's the critical transition."

She believes conservation measures could go a long way toward alleviating water shortages in Southeastern states but added that the mentality among the public and elected officials is not yet dedicated to conserving water.

Pricing schemes, incentives to use low-flow fixtures, and simply fixing leaky pipes have reaped major water savings in some cities, but room for improvement in the Southeast's infrastructure exists. In the 16 counties of metro Atlanta, about 14 percent of water in the public system is lost to leaks, according to the Atlanta Regional Commission. In Birmingham, which like north Georgia faced water restrictions in the fall, the Water Works reports that 26 percent of its water is unaccounted for and lost, according to an August story in the Birmingham News.

Some U.S. cities have saved substantial water through conservation. A leak-detection program in New York City saved 30 million to 50 million gallons of water a day in its first few years in the 1980s, according to the U.S. Environmental Protection Agency (EPA). Los Angeles kept its water consumption level steady while the city's population grew by 1 million from 1970 to 2000, according to a 2002 paper by the University of Georgia River Basin Science and Policy Center.

Tampa, Fla., began a rebate program in 1993 for low-flow toilets. The Tampa Water Department has paid rebates of up to $100 to more than 30,000 toilet buyers. Along with other conservation measures, including a limit on irrigated turf grass in new developments, the rebate program helped the city reduce per capita water usage by 26 percent between 1989 and 2001, according to the EPA.

For now, booming growth in Southeastern metropolitan areas is straining water supplies and driving plans for additional reservoirs and other infrastructure, Cunningham said. Those costs will inevitably be borne by rate payers. But, he added, municipalities must consider how to pass along the costs: Should the existing residents pay, or should developers and landowners foot more of the bill through higher hookup fees?

Those questions are just a couple among countless others that will face the Southeast as the issues of water management and the economic impact of water shortages appear likely to endure.

This article was written by staff writer Charles Davidson.