ASU Report Quantifies CAP’s $1 Trillion Impact on Arizona’s Economy

Central Arizona Project April 30, 2014

Central Arizona Project’s (CAP) delivery of Colorado River water from 1986 through 2010 has generated in excess of $1 trillion ($1,090,000,000,000) of Arizona’s gross state product (GSP), according to a study recently commissioned by CAP with the W.P. Carey School of Business at Arizona State University. The GSP represents the dollar values of all goods and services produced in the region and is a measurement of the economic output of a state, a counterpart to the gross domestic product for the nation. In recent years, the existence of CAP has generated an economic benefit approaching $100 billion per year, accounting for at least one-third, and sometimes more, of the entire Arizona gross state product.

Simply put, Arizona would be entirely different if CAP’s 336-mile-long canal system was never constructed, commencing almost 40 years ago. By delivering at least 1.5 million acre-feet (almost 500 billion gallons) of Colorado River water every year, CAP has dramatically and positively changed the economic and environmental landscape of our state.

In order to calculate the economic impacts of CAP water deliveries, the researchers prepared a baseline scenario of Arizona’s annual economy as it has evolved with CAP water deliveries. A “no-CAP” scenario was produced for the same time period with water supplies reduced by the amount delivered each year by CAP. The differences between the scenarios represent the annual and cumulative impacts of CAP water deliveries on Arizona GSP and employment.

There are several other key findings. One is that CAP’s supply of water to municipal industrial and agricultural customers in 2010 is estimated to have generated annual employment of more than 1.6 million jobs. Another finding is that Government, Healthcare, Retail, Real Estate and Travel sectors would have lost more than 60 percent of these jobs had the CAP water supply been unavailable. Thirdly, if the recreational benefits and other impacts associated with the operation and maintenance of the aqueduct system and Lake Pleasant are added to the water supply analysis, statewide economic impacts of the operation of CAP would be even greater.

CAP is governed by the Central Arizona Water Conservation District (CAWCD), a 15-member, publicly elected board of directors from Maricopa, Pima and Pinal counties. According to board president Pamela Pickard, “The study was commissioned as part of a greater effort to understand and quantify the impact of CAP and its Colorado River water supplies on central and southern Arizona. The results clearly demonstrate that the delivery of Colorado River water creates jobs in all sectors—cities, businesses and agriculture. We are proud to contribute so much to Arizona.”

David Modeer, general ,manager of CAP, added, “Preserving this vital resource is foremost in our minds. The Colorado River is experiencing long-term drought and CAP’s focus is to continue to work diligently with our customers and stakeholders to ensure this resource is available to support the future of our state and Southwest region.”

“Central Arizona Project is one of the reasons why the desert flourishes and the economy continues to grow and attract new business to the state,” said Barry Broome, president and CEO of the Greater Phoenix Economic Council. “CAP’s water deliveries to cities, farms and industry have been crucial to our economic vitality.”


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