The Economic Benefits and Costs of Snow in the Upper Colorado Basin the Economic Benefits and Costs of Snow in the Upper Colorado Basin

THE ECONOMIC BENEFITS AND COSTS OF SNOW IN THE UPPER COLORADO BASIN THE ECONOMIC BENEFITS AND COSTS OF SNOW IN THE UPPER COLORADO BASIN AUTHOR Ken Cousins SUGGESTED CITATION Cousins, K. 2017. The Economic Benefits and Costs of Snow in the Upper Colorado Basin. Earth Economics, Tacoma, WA. ACKNOWLEDGMENTS This study was generously funded with a grant from The Walton Family Foundation. Earth Economics would like to thank the following for their invaluable insight: Dr. Dominik Schneider, who generously provided his SWE data; Brian Lazar, Deputy Director of the Colorado Avalanche Information Center; Dr. Jack Schmidt, Director of the Utah State Center for Colorado River Studies; and Dr. Dan J. Mcevoy, researcher at the Western Regional Climate Center. We would also like to thank our team of reviewers, which included Rowan Schmidt and Cyrus Philbrick. The Earth Economics research team for this study included Zac Christin, Rowan Schmidt, Corrine Armistead, and Ken Cousins. Editing, cover and layout design by Cyrus Philbrick. Cover photo from Wikipedia Commons. PREPARED BY 107 N. Tacoma Ave Tacoma, WA 98403 253-539-4801 www.eartheconomics.org [email protected] FUNDED BY ©2017 by Earth Economics. Reproduction of this publication for educational or other non- commercial purposes is authorized without prior written permission from the copyright holder provided the source is fully acknowledged. Reproduction of this publication for resale or other commercial purposes is prohibited without prior written permission of the copyright holder. THE ECONOMIC CC BY Wolfgang Staudt BENEFITS AND COSTS OF SNOW IN THE UPPER COLORADO BASIN When snow first falls to earth, it adversely affects million acres of cropland. As a whole, the basin travel. But accumulated snowpack also supports is estimated to support one-fifth of the nation’s winter recreation, aesthetic values, and regional GDP.1 Snow is a particularly important feature of and local climate dynamics, which in turn influence the water cycle in the Basin, and affects human both wildlife habitat and ecosystem function. As wellbeing and the economy in every phase, seasons change, the pace and timing of snowmelt whether snowfall, snowpack, or snowmelt. The can cause localized flooding, affect water following sections describe many of the economic availability throughout the basin, and directly benefits and costs associated with snow and impact plant and animal species. As water, melted snowpack, with a focus on the Upper Colorado snow supports plants and animals, but is also Basin (UCB). We explore some of the ecological subject to increased evaporation and transpiration, and economic changes that can be expected especially as it flows to lower elevations with from climate shifts, and discuss their significance higher average temperatures. Gravity-driven flow throughout the UCB (and beyond). Finally, we drives hydroelectric generation and both direct point to a few policy responses that are attempting and indirect human consumption of water. to mitigate and adapt to the risks associated with decreasing snowpack and water flows. The Colorado River Basin supplies water to more than 34 million people and irrigates over four EARTH ECONOMICS 1 Falling Snow than twice that of Alaska, in second place.5 Shifts While snowpack provides many critical benefits, in the timing of snowmelt are also likely to impact there are also costs associated with snow, winter tourism and aesthetic values, although this especially as it falls and as it melts. Even moderate has not been closely studied. snowfall can block streets, roads, and highways; snow removal costs the United States around $2.5 Winter Recreation billion every year.2 Snowfall also often leads to Snow and snowpack provide the basis for the transportation delays, lost workdays, damage to winter recreation industry, including alpine and buildings, infrastructure, and agriculture, as well cross-country skiing, snowboarding, snowshoeing, as accidents, injuries, and the loss of life. These snowmobiling, and winter mountaineering. The costs can be considerable: In 2004, the cost of industry is significant for the state of Colorado. snowstorm-related air and ground transportation From 2009 to 2010, winter recreation contributed delays across the United States were estimated over $2.4 billion (2016 dollars) and 37,800 jobs to at over $4 billion (2016 dollars).1 Major storms Colorado’s economy, including 20 percent of all also commonly cause injuries and death. Other ski visits in the country.6 Many local communities storm-related costs include efforts to prepare for rely on this income to sustain their economies storm events—whether they occur or not—and throughout the year. Yet the industry is considered insurance premiums and claims. The March 2003 highly vulnerable to climate change. A 2006 blizzard (Colorado’s most costly to date) resulted study estimated that April snowpack in Colorado in $122.7 million (2016 dollars) in snow and ice counties with ski resorts will decline 43-82 percent damages to private vehicles and homes, with by the end of the century.36,37 over 28,000 claims filed.i Most of this damage was caused when heavy snows collapsed roofs In Colorado, the difference between high and and outbuildings. There was also significant low-snowfall years accounts for over 1.8 million fewer skier visits, translating to a loss of $170 water damage from melting snow, wind damage, 5 and temporary shelter costs.3 Increasingly million (2016 dollars). For ski resorts, a common damaging natural disasters (including wildfires and benchmark for profitability is the “100-days hailstorms) have led to higher insurance premiums; rule,” whereby resorts can remain economically viable with 12 to 20 inches of snowpack over 100 Colorado rates are above the national average and 8 rising.4 See Table 1 for a summary of these costs. days between December and mid-April. While nearly 90 percent of winter resorts make artificial Earlier snowmelt also increases the risk of snow to extend skiing seasons, the process still larger and more frequent avalanches. Since requires low temperatures and sufficient water 1950, Colorado has had the highest number of and energy.9 Snowmaking is especially water- avalanche-related fatalities in the country, more intensive, requiring from 64,000 to 160,000 TABLE 1: THE COST OF WINTER STORMS IMPACT SCOPE YEAR [COST] SOURCE Snow removal United States 1997 [$2.5 billion (annual)] Adams et al 2004 Transportation delays United States 2001 [$4 billion (annual)] (year- round) Damage to homes and Colorado 2003 [$122.7 million (single event)] RMIIA 2015 vehicles *all values in 2016 US dollars. i These figures do not include damage to commercial buildings and infrastructure. 2 THE ECONOMIC BENEFITS AND COSTS OF SNOW IN THE UPPER COLORADO BASIN gallons per acre. The necessary energy can also Natural Beauty and Aesthetic Value be quite significant—as much as 50-80 percent Snowpack also contributes to human wellbeing in of a resort’s annual use, upwards of $550,000 per less direct ways. Even non-skiers enjoy the sight of 10 resort (2016 dollars). These benefits and costs are snow-capped mountains. Though the economics summarized in Table 2. of winter-season-sightseeing are not well-studied, Another alternative is for the industry to shift properties with views of snow-capped mountains winter recreation locations to higher altitudes or commonly fetch higher prices. A 2009 study, which higher latitudes. While this may provide some assessed the impact of a warming climate on long-term flexibility, the costs of relocating are home prices near alpine skiing and snowboarding likely to be substantial. Costs include purchasing locales, revealed a very high correlation (R2 = new property, building additional lift and support 0.72 to 0.98) between home value and snowfall intensity (the percentage of precipitation falling facilities, and promoting those new destinations 12 to their customers.11 Where public infrastructure as snow during winter months). The effect of low must be extended to new or expanded resort snowfall can be substantial; low snowfall years properties, additional costs to the public can were associated with declines of up to 8.8 percent be anticipated. The full cost of extending (or of a home’s value (see Table 3). While the Rockies improving) roads, tunnels, or bridges to access may not face a high risk of snowpack loss in the more remote areas may be unknown, but it short and medium-term, the ultimate losses to represents a substantial cost of a changing climate. property values may be substantial. TABLE 2: BENEFITS AND COSTS OF WINTER RECREATION IMPACT SCOPE YEAR BENEFITS [COSTS] SOURCE Consumer spending $2.4 billion Colorado 2009-2010 Burakowski and Employment 37,800 jobs Magnusson 2012 Snowmaking in low snowfall United States [$550,000 per resort] periods *all values in 2016 US dollars. TABLE 3: HOME VALUE IN LOW-SNOWFALL YEARS IMPACT SCOPE YEAR BENEFITS [COSTS] SOURCE Western United [≤8.8% decline in Home values in low-snowfall years 2009 Butsic et al 2009 States sale value] *all values in 2016 US dollars. EARTH ECONOMICS 3 Habitat and Biodiversity Support effective breeding populations.14 Higher stream temperatures also reduce dissolved oxygen, Thriving ecosystems are critical to Colorado’s further impacting aquatic diversity and general economy. In 2006, recreational fishing, hunting, ecosystem health.15,16 and wildlife viewing in the Colorado basin directly contributed over $1 billion (2016 dollars) to Changes to local and regional climates do not the state’s economy—nearly $2.7 billion (2016 impact all species equally. Conditions that weaken dollars) when indirect and induced spending are some species may favor others. For example, included.13 The spatial extent of snowpack and populations of mountain pine beetle and spruce timing of snowmelt impacts the viability of plant beetle have recently exploded, as earlier spring and animal species (as well as broad ecosystem temperatures have allowed them to emerge four health) throughout the basin, and throughout the to six weeks earlier than in the 1970s.

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