Amazon has pledged $20M for Colorado River conservation. Why big companies care about saving water

LAUREN GILGER: We’ve all heard how dire the future of the Colorado River is, especially for us who rely on its water here in Arizona. But just how much would it cost to help save it? And who should be ready to foot the bill?

Well, the state and just about every municipality in it are getting ready to shell out a whole lot in water conservation efforts. And now, one big player in the private sector is stepping up, too: Amazon. The online retail giant has pledged $20 million to water-saving efforts in Arizona and California as part of a longer-term effort.

Business

Amazon will spend millions to help save Colorado River water

Alex Hager

The company launched the "Colorado River Basin Collaborative" and an effort to spend $100 million on water conservation over two years.

KJZZ’s Alex Hager joins us now with more on the plan and the role of private business in our collective water futures. Good morning, Alex.

ALEX HAGER: Good morning, Lauren. Thanks for having me.

LAUREN GILGER: Thanks for coming on. So, tell us more first, Alex, about this plan from Amazon to spend money on saving water here. What are they going to do?

ALEX HAGER: Yeah. So, what we know so far is that it’s $20 million out the gate. That’s going to fund a few different water conservation projects, perhaps most notably here, they’re going to upgrade irrigation efficiency with a tribe in northern Arizona that they did not name, citing some ongoing negotiations. And that is also part of a longer-term plan where they are creating this collaborative. I believe they’re bringing together a few different companies to join these efforts, and the goal there is raising $100 million for water conservation over the course of two years. And just to put this into context a little bit, this is a fairly significant amount of money from the private sector. I can’t say conclusively that it is the, you know, single largest corporate tranche of money for ... water conservation, but it is certainly the largest in recent memory for me.

LAUREN GILGER: Yeah. OK, so let me ask you about this quote from Amazon that you reported, Alex. They told you that, , “Companies that benefit from being in that basin have an opportunity and really a responsibility to help solve those problems.” So, I want to talk about that responsibility from the private sector, what it means, how much have private businesses gotten involved, for example, in helping with kind of the water shortage on the Colorado River, Alex — which really impacts businesses, too, right?

ALEX HAGER: Yeah, we’re seeing it more lately. And, you know, I was skeptical of this sort of thing initially, both Amazon’s announcement and when I started hearing other companies do this a few years ago. You know, it’s not every day that large corporations act purely out of the goodness of their own hearts.

So, I talked about this with the head of a group called Business for Water Stewardship. It’s an organization that really is focused on rallying money from private companies for this kind of thing, for water conservation. And, you know, over about five years, they rallied about $30 million for water conservation projects.

And the head of that group told me they’re mainly doing it for two big reasons. They see risk. And the first is operational risk. Basically, if you are building big factories, or shipping hubs, or any kind of large industrial infrastructure, if you’re putting it in a place where you want it to operate long-term, it is going to be a problem if there is not a long-term water supply. So, the first thing is they’re trying to mitigate that risk.

The second thing is reputational risk. And the idea there is that as this water crisis is getting bigger, it is attracting more attention and a lot of hard opinions. We’re seeing it showing up in campaign ads now, right? ... And I think the idea there is that companies know that if the water crisis becomes big enough that everyone has an opinion about it, they want to be part of the solution rather than the problem.

I mean, we’re seeing this with data centers right now, right? I mean, there’s companies that now have a significant amount of risk in terms of setting up data centers in communities because those communities are so concerned about their impact to the water system that they might protest the construction of that. So, companies, I think, are looking to make sure that they can operate for a long time, and then people will let them operate for a long time.

LAUREN GILGER: A balance there, for sure. OK. So, let’s put this into context, though, in terms of how much money this is, right? Like, this is, as you say, a significant investment from the private sector, $20 million, part of a larger thing overall, right? But how much money might it take, Alex, to really save enough Colorado River water to like make a dent? It’s so dire, right?

ALEX HAGER: It is going to take a lot of money. When we talk about saving Colorado River water, there’s a few big ways that we do it. Typically, it is paying farmers, very large agricultural users of water, to just pause growing. A lot of times, it is paying cities to save maybe a little less water by making their systems more efficient or reducing leaks in some of their pipes.

All of those programs cost billions of dollars. We saw the Inflation Reduction Act under the Biden administration ... allocated $4 billion for those. That money is still on its way out the door in some cases, and we have just seen new calls for another $2 billion. So, $20 million is a relative drop in the bucket. But the federal government might not be able to foot this bill by itself, and I wouldn’t be surprised if we see more money from more places kind of chip in to this water conservation work.

LAUREN GILGER: So, most of that money, as you’re saying, comes from governments, taxpayers, things like that. I mean, like, you mentioned some of the ways in which we can and are paying people to save money in various ways in city or ag, right? But I mean, like, can you save enough? Like, how much is it just that we are too many people and too much going on in this region?

ALEX HAGER: That is the big question. You know, right now, one of the big questions for the Colorado River going forward is how much can we cut back on water through a voluntary basis where people get to choose how much they cut and when and then get paid for it, and how much is this problem big enough and expensive enough that it will be significantly easier for big governments to find some way through a way that doesn’t get them sued to force people and businesses to use less water.

LAUREN GILGER: Yeah. OK, so Amazon says that this plan, they know like isn’t going to solve the whole problem here, but it does seem like it’s part of this bigger effort. Talk a little bit about their long-term goal. They use the word momentum.

ALEX HAGER: Yeah, I think the big thing that we see in that regard is, you know, sort of the “teach a man to fish” approach, right? Is that one of the ways that we can save water is by paying people right now to guarantee that they will use less water for say, two years. Or ... you can give them money for some sort of project that kind of guarantees repeated savings. So, instead of just using less, it is coming up with infrastructure that just uses less by itself — like programs that are more effective at detecting leaks or sprinklers that use less water to grow the same amount of crops or grass on someone’s lawn, that kind of thing. So, I think what they’re alluding to here is the idea that they could get a lot of value out of putting money into these projects that have kind of year-after-year returns.

LAUREN GILGER: ... Is water augmentation a part of this conversation ever, Alex, from the business side?

ALEX HAGER: Not that I have heard yet. Most of this seems to be concerned with saving water in places that are already using it. I’ve seen other companies give water for, you know, agricultural equipment that is automated. So instead of having to go out into the field and turn a crank to shut off the water, you can do it with the touch of a button and you save water in the amount of time it takes you to do that. But I have not yet heard of corporate money going towards augmentation projects.

LAUREN GILGER: All part of this larger conversation. All right, KJZZ’s Alex Hager. Thank you so much for coming on, Alex. Appreciate it.

ALEX HAGER: Thanks for having me.