Water decision to wash over Ga. economy

Metro Atlanta and Southwest Georgia could suffer nearly $2.5 billion in economic losses each year if the verdict in the the water wars trial goes against them. Florida says it wouldn’t cost Georgia more than $106 million annually to send more water downstream from the Chattahoochee and Flint rivers during a drought.

Who’s right? Who knows. It depends which expert — among dozens who testified during the recent five week trial in a bankruptcy court here — is more believable.

What’s indisputable, though, is that the economic impact to Georgia could be severe if the special master, appointed by the U.S. Supreme Court to resolve the nearly three-decade long legal battle between Georgia and Florida, rules even partially in Florida’s favor.

Maine attorney Ralph Lancaster Jr. is expected to file his report to the nation’s high court within a month. Florida sued Georgia two years ago claiming wasteful water use upstream is to blame for the collapse of the Apalachicola Bay oyster industry and threats to endangered species downstream.

The Sunshine State seeks a cap on Georgia’s consumption of water, as well as a significant increase in the amount of water that flows over the border during drought. While Florida shoulders a heavy burden in proving Georgia harms its economy and ecology, the special master hinted repeatedly throughout the trial that his decision will likely require both states to share some economic pain.

“You can’t both be winners,” Lancaster said at the trial’s end. “But you can both be losers.”

Georgia has much more to lose than Florida, economically. The Apalachicola-Chattahoochee-Flint (ACF) river basin spreads from Metro Atlanta through Columbus, Albany, eastern Alabama and a large swath of the Florida Panhandle. About 98 percent of the population and 90 percent of the jobs are found in the Georgia portion of the river basin.

And, according to Georgia calculations presented during the trial, 99 percent of the basin’s “gross regional product,” or $280 billion, comes from Georgia.

Farming vs. fishing

Agricultural receipts alone accounted for $4.7 billion across Southwest Georgia in 2013. Florida’s fishery sector — oysters, shrimp, snapper and more — tallied only $11.7 million, according to Robert Stavins, the Harvard professor hired by Georgia to make its economic case to the special master.

Metro Atlanta’s landscaping industry generated about $660 million in 2013 and employed more than 14,000 people.

“Any cap on water consumption in metro Atlanta … would threaten the existing population and future population growth in metro Atlanta and the region’s ability to grow economically,” Katie Kirkpatrick, chief policy officer for the Metro Atlanta Chamber, said in pre-filed testimony.

Florida wants to cap Georgia’s average annual water consumption. Florida also seeks a 40 percent increase in water from the Chattahoochee — Atlanta’s main water source — the Flint, or underground aquifers to flow over the state line near Bainbridge during a drought.

David Sunding, a professor of natural resource economics at the University of California, Berkeley who was hired by Florida, focused water-reduction plans on two geographic areas: Metro Atlanta and Southwest Georgia. The Atlanta region returns only about 60 percent of the water it uses — brushing teeth, washing cars, watering lawns, flushing toilets — to the Chattahoochee River. Replacing old, leaky pipes would reduce wasted water by 15 percent, Sunding testified.

South Georgia and the Florida Panhandle suffered a withering drought in 2011-2012, yet north Georgia was relatively unscathed. If metro Atlanta had reduced outdoor watering by 50 percent, billions of additional gallons of water would’ve flowed down the Chattahoochee to alleviate Florida’s drought.

Sunding, relying on federal labor data, further notes that only a small number of landscaping jobs — less than 10 percent between 2006-08 — disappear during times of drought and state-mandated watering restrictions.

‘Boom-town mentality’

“We talked about these very same (conservation) measures 20 years ago, but Georgia didn’t want to do any of the things described in Sunding’s report,” George William Sherk, a water management expert and former Georgia State University professor, said in an interview. “It was the boom-town mentality; all growth was good. Georgia didn’t want to hear about any limitations on Atlanta’s growth.”

He added, “But agriculture is the low-hanging fruit here.”

Florida spent a good bit of the trial targeting farming practices, and wasteful water use, along the Flint River in southwest Georgia. Agriculture, after all, uses the lion’s share of water in the ACF basin in Georgia.

Farmers should deploy high-tech pivots that drip water onto crops rather than typical irrigation systems that spray water all over fields, Sunding says. State officials should also more strictly enforce the amount of water farmers use and, in particular, crack down on unpermitted irrigated acres. Sunding estimates that Southwest Georgia farmers are irrigating 90,000 acres without permits — maybe one-tenth of the land in the entire Flint River basin.

Sunding also argues that the major row crops along the Flint aren’t worth the economic harm to Florida. Cotton, peanuts, soybeans and corn carried a farmgate value of $1.3 billion in 2013 — “less than one half of one percent of the overall economy of the ACF in Georgia.”

He concludes, “The costs to the farm economy in Southwest Georgia of complying with the consumption caps need not be large in relation to the size of the agricultural economy in the basin.”

Georgia attorneys counter that Sunding’s recommendations — as much as a 71 percent reduction in irrigation during drought years — would impose “draconian” hardships on Georgia’s row crop farmers.

Taking 100,000 irrigated acres permanently out of production, for example, would cost $86 million, Sunding estimates. Fixing metro Atlanta’s water and sewer pipes: $16 million a year. Rejiggering irrigation wells and other water-saving measures would cost millions more.

Conflicting reports

In all, Sunding says, Georgia could supply 40 percent more water to Florida in drought years at costs between $27-$106 million million annually — a pittance given Georgia’s $24 billion annual budget.

Hogwash, says Stavins, adding that the Berkeley professor doesn’t take into account job losses (4,200 annually), tax hits ($15.4 million) and indirect costs to businesses. Reducing irrigation by nearly three-fourths would decimate cotton and peanut production.

Curtailing outdoor watering in metro Atlanta by a similar percentage would cost the region’s economy $2.1 billion, Stavins says, without affording Florida the water they need.

“The proposed remedy,” the Harvard professor said, “would make society worse off.”

Lancaster, the special master, grew weary of conflicting economic impact models and wondered aloud on the trial’s last day why the various reports “all come out favoring the client who hired them.” Nonetheless, he will take the next few weeks to decide who’s to blame and who’s to pay.

“If I was the master, I’d split the baby,” said Robert Abrams, a law professor at Florida A&M University who has written extensively on water rights. “And Georgia has the ability to spread the cost around. Atlanta and all those suburbs can chip in a little bit so that one constituency won’t be hurt too bad if they lose.”

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