Flessa, K.W., 2004. $200 per acre-foot: Nature’s services and the natural value of water in the Colorado delta and estuary.  Gulf of California Conference, Tucson, AZ, June, 2004. 

The diversion of Colorado River water for agriculture and municipal use has changed the value of ecosystem goods and services provided by the 12,000 sq. km. delta and estuary. Ecosystem goods and services are the benefits that human populations derive, directly or indirectly, from ecosystem functions. In a landmark paper, Costanza et al. (1997, Nature 387: 253-260) provide rough estimates of the dollar value of ecosystem services such as disturbance regulation, waste treatment, habitat, recreation, and food production for floodplain, desert, cropland, estuarine and other biomes.

In the Colorado Delta, Imperial Valley and Valle de Mexicali, irrigation projects transformed floodplain, wetland, and desert biomes into cropland, while in the northern Gulf of California, upstream diversions of all types converted estuarine habitats into biomes more similar to marine shelf habitats. I used conservative estimates from Costanza et al. to estimate the dollar value of ecosystem services in the original and the converted biomes of the delta and estuary. The conversion of desert to cropland doubled the value of services provided per hectare. In contrast, the conversion of floodplain and wetland biomes to cropland decreased the value of ecosystem services by two orders of magnitude. In the marine environment, the transformation from an estuarine to a marine shelf biome decreased the value of ecosystem services by an order of magnitude.

The net loss of value of ecosystem services caused by the diversion of Colorado River water is ~ $2.4 billion per year. Prior to conversion, the value of ecosystems services totaled ~ $2.7 billion per year; since diversion, the annual value has decreased by an order of magnitude to about $262 million.

Assuming that the Colorado River supplies 13 million acre-feet (16 billion cubic meters) of water per year, the ecosystem value of water is $208 per acre-foot ($0.17/cubic meter). Current U.S. agricultural water prices for Colorado River water range from $16 to $32 per acre-foot and municipal prices range from $300 to $880 per acre-foot. Existing prices are based on the cost of conveyance and market forces, not on the value of the ecosystem services. The ecosystem cost of $208 per acre-foot is a hidden subsidy currently paid through the loss of nature’s services to society.