The Governor's plan to fix California’s aging water system and improve the movement of water across the Delta will produce huge economic benefits for the state. That’s the conclusion of a comprehensive new Statewide Economic Impact Report released today by the Brown Administration. Authored by economist Dr. David Sunding of The Brattle Group, the report details the long-term economic benefits of a more reliable, higher quality water supply as well as the enormous stimulus and hundreds of thousands of new jobs that the construction project will create.
In the simplest terms, BDCP and the proposed twin tunnels, will generate $84 billion in statewide economic activity and create more than 1 million jobs over the next 50 years. It accomplishes that by helping to restore reliability to California’s water supply, which has currently been denied to almost 4,000 San Joaquin Valley farms and 25 million consumers who depend on water moving reliably through the Delta.
So who benefits from the BDCP? The answer is just about everyone. Of the $13 billion in construction costs in the first 10 years of the project, $11 billion, or almost 85 percent, is wages. That is money in the pockets of construction workers, maintenance personnel, farm and farm-related employees and the people who will manage the enhanced environmental areas that are part of the project.
The report also says that 390,000 urban and 134,000 farm jobs will be preserved as a result of the BDCP. That means that if we don’t move forward with the project, people who may not even have a direct connection to the BDCP are at risk of losing their jobs in the future because of reduced water supply reliability and a declining economy.
The report is good news for a state that has struggled under the weight of economic difficulties and high unemployment. These numbers provide hope for Californians who are unemployed or underemployed. They also provide hope for businesses that want dependable resources to help them grow. And the certainty of a water supply for thousands of farms means that California consumers will continue to find locally grown fresh fruits and vegetables in the market.
There are costs associated with the BDCP. They're important but they add up to much less than the overall benefits of the project. In the Delta, for example, the report estimates there will be $34 million in reduced agricultural production, up to $79 million in transportation delays during construction, and air quality impacts of up to $16 million.
In contrast, according to the report, economic and enhanced recreational opportunities in the Delta will far outweigh the costs and disruptions outlined above. In addition to 177,000 direct construction jobs, fishing, boating, hunting and other recreational activities will benefit to the tune of an additional $222 million to $370 million as a result of habitat restoration and other enhancements. California will also benefit from a net reduction in greenhouse gas emissions by as much as half a billion dollars over the 50-year life of the project permit.
Taken as a whole, the total cost over the 50-year project period comes to $129 million. Compared to the overall increase in economic welfare for residents of $4.8 billion to $5.4 billion, the report concludes that these costs only amount to about 2.3 percent of the total value that BDCP will deliver for the state.
Considering California’s history it is not surprising that an investment in water supply infrastructure will pay big dividends. From the Gold Rush to local projects in the 1880s to the State and federal projects in the middle of the last century, water development has helped fuel business opportunities and improved the quality of life for California’s residents. Together, all of California’s water supply projects have helped propel the state into one of the top 10 economies in the world. The benefits provided by the BDCP and the water supply reliability it will bring is the same kind of catalyst for jobs that will add still more luster to California’s reputation as “The Golden State.”