- The opinion says Colorado River demand has exceeded supply for decades.
- River flows could decline another 20% by 2050.
- Growing industries are adding new water demands.
- The authors point to conservation, water reuse and restoration as possible tools.
- They say more investment and cooperation are needed to expand those efforts.
Friday, September 25, 2026 — An opinion published Sept. 22 on the World Economic Forum website
describes the Colorado River Basin as facing a form of “water bankruptcy,” with long-term demand exceeding the river’s available supply. The authors, writing as water awareness, efficiency and stewardship advocates, say climate models project Colorado River flows could decline another 20% by 2050 and 35% by 2100, while cities, farms, tribes and industries continue to depend on the river. They also point to growing water demands from semiconductor manufacturing and artificial intelligence infrastructure. Rather than presenting the problem as one with a single solution, the authors highlight approaches already being used in the basin, including urban conservation, industrial water recycling, wetland and floodplain restoration, and structures designed to slow streamflow and recharge shallow groundwater. They argue that expanding those efforts will require substantially more investment, particularly for agriculture and nature-based restoration, along with cooperation among governments, tribes, businesses, farmers and communities. The World Economic Forum notes that the views expressed in the article belong to the authors and do not necessarily represent the Forum.
Republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License:
How the American West can restructure its water debt
Mina Guli, Founder and CEO, Thirst
A river in crisis is usually described as a countdown clock towards running out of water. But from our combined perspective as advocates for water awareness, efficiency and stewardship, it’s a far more dynamic problem. What we’ve found through Keep the River Running, our campaign for the Colorado River, is instead a complex mismatch between supply and demand.
This is not drought. It is bankruptcy.
There is now a term for this, and it is not drought, it is a water bankruptcy. For a century the basin spent more water than nature deposited. The pattern is not unique to the United States. River flows and aquifer depletion across the world shows the same mismatched balance sheets, at various stages of denial.
And on the Colorado, this accounting cannot continue. As our State of the Basin Report: A Guide to the Colorado River Crisis shows, climate models project an additional 20% drop in Colorado River flow by 2050 and 35% by 2100. This is aridification, not a dry spell that ends.
The stakes are high: The river’s water supports 40 million people across seven US states and Mexico, $1.4 trillion in annual economic activity and 16 million jobs, according to a 2014 Arizona State University analysis. It irrigates nearly 90% of the nation’s winter vegetable crops, and its two largest reservoirs, Lake Mead and Lake Powell, are at record lows, threatening hydropower generation. Planning for a return to the historical average means building a future economy around a ghost asset.
The US government has quantified the gap: On 21 August, it adopted a new framework that calls for water withdrawals to decrease by up to 3.7 billion cubic metres (3 million acre-feet) a year, depending on conditions over the next decade. This falls on three states: Arizona, California and Nevada.
The growing competition for water: chips, data centres and power.
This water bankruptcy’s creditors go beyond the cities, communities and Tribal Nations that depend on it. Semiconductor fabrication and AI infrastructure are both critical industries in the basin, and both have substantial water footprints.
A 2024 report from Lawrence Berkeley National Laboratory estimates that by 2028 hyperscale facilities alone could consume between 60 and 124 billion litres directly. For scale, even at the high end, that’s far less than combined municipal, commercial and industrial use in the basin – but it’s still on par with a city the size of Tucson, or a year’s worth of some crops. And the industry is growing.
Major semiconductor manufacturers, significant defence, mining, oil and gas, and energy operations all rely on the Colorado River’s water, too, along with dams and thermoelectric plans that generate power.
For these industries, continuing along a business-as-usual path increases their exposure to “wild risk”, where unpredictable and extreme events can ripple through an entire economy.
Three tools already in the water.
Yet the strategies to mitigate that risk are not moonshots. They are Earthshots, and many are already operating in the basin.
1. Urban efficiency. Las Vegas has grown substantially while cutting consumption. The Southern Nevada Water Authority reports a 58% reduction in per capita water use between 2002 and 2023, even as the population grew by more than 786,000, driven by water reuse and by paying people to tear out ornamental turf. Other cities have yet to follow. Nationally, 19.5% of treated drinking water is lost before it reaches a customer or is properly billed – worth $6.4 billion in uncaptured revenue.
2. Corporate infrastructure. Semiconductor manufacturer TSMC is estimated to currently recycle 65% of the water at its north Phoenix complex, and broke ground last year on a 15-acre industrial reclamation plant designed to hit 85% at startup and 90% or better thereafter. Many data centres are also transitioning to more water-efficient cooling, and local governments have begun writing water into land-use law.
3. Nature-based solutions. Restoring wetlands and floodplains builds long-term resilience. Beaver dam analogues, simple structures that slow water and recharge shallow aquifers, are low-tech options that run $50,000 to $100,000 per stream mile against $600,000 to $1 million for conventional engineering. Yet they remain underfunded.
Capital and consensus.
All three are time-tested. All three are already at work. None has been scaled. Why not?
A lack of capital is stymying progress, particularly in agriculture and nature-based restoration, which private investors often overlook. Globally, the World Bank finds that about 91% of annual water spending comes from the public sector and less than 2% from private investors.
Such financing is essential for restructuring. In corporate bankruptcies, loans are used to keep operational control, and retain key employees, suppliers and customers. If the Colorado River Basin is to right-size its use of river water without losing jobs, companies and residents, it also needs investments – and urgently.
Restructurings also require consensus. No single company, city or farm can secure a river basin alone. The serious work of reallocating this water needs to happen collectively and collaboratively; not in a courtroom.
Indeed, consensus is already emerging. Through summits held along the river’s course this summer, in Denver, Las Vegas, Phoenix and Los Angeles, our campaign has convened city officials, global companies, tribes and other communities. And when we conclude at Climate Week in New York, Wall Street will be there.
Our water debts will never be as easy to restructure as our corporate or sovereign debt. Shifting how consumers, boardrooms and investors re-value water is a formidable task. It is always hard to price what is everywhere, flowing visibly through our taps, power grids, factories and veins. But it is necessary. And it is inevitable. Water always finds its level.
