In Northwest Colorado, local communities depend on water, not only to support their growing populations, but also to bolster outdoor recreation and tourism, agricultural production and more. As Colorado and the West face growing aridification driven by climate change, threats to water quality, quantity, timing and more are increasing — and driving overall economic uncertainty. 

A new report from the Northwest Colorado Council of Governments Water Quality/Quantity Committee seeks to illustrate the relationships between economic activity, water and emerging threats in Eagle, Grand, Gunnison, Pitkin, Routt and Summit counties. Collectively, the report refers to these as the headwaters counties, owing to the vast number of source waters and major tributaries that originate within their mountains — including the Colorado River, which has its headwaters in Grand County and delivers water to over 40 million downstream users.

While the latest report serves as an update to an edition from 2012, the need to understand these relationships was punctuated by this year’s dire water situation. 

The 2025/26 winter saw a record-low snowpack, followed by periods of intense heat — including, critically, in March — which spurred streamflows to peak early and at record-low levels. While much of the northwest was experiencing some level of drought throughout the year, the conditions intensified in the late spring and early summer, driving concerns for recreational users, businesses, municipalities, producers and others around water supply. 

“When reservoirs and streams are depleted, local communities suffer acute consequences, especially when peak flows and snowpack are out of sync with vacation and holiday seasons,” said Kristin Green, the committee’s director. “A robust headwaters’ economy benefits all of Colorado and is impacted by water users across the state. Moving forward, water operations should be leveraged to alleviate environmental degradation and maximize recreational flows in the headwaters counties.”  

What is threatening water in Northwest Colorado? 

According to the report, water quantity, water quality and water system health, timing of runoff, where water is flowing or stored and temperature are among stakeholders’ chief worries when it comes to sustaining their water-reliant economies. 

Many of these are tied to climate change-based threats and concerns around transmountain diversions — in which water is carried from the headwaters counties east to the Front Range. 

There are 16 transmountain diversion projects in the six counties — with several others either currently in the works or being considered. For subbasins in the region, transmountain diversions can consume up to 62% of flows during an average year and up to 80% in a drought year, with the largest diversions coming from the Colorado River below Windy Gap Reservoir outside Granby. 

Transmountain diversions take around 500,000 acre-feet from the Colorado River basin each year, according to a technical report submitted to the council by Lotic Hydrological. Colorado’s 2023 Water Plan estimates that one acre-foot of water can support two families of four or five people for one year.

In addition to driving supply concerns, the report emphasizes that these diversions can have environmental consequences that include direct impacts like increased pollutant concentrations, loss of natural river flows and peaks, increased temperatures as well as indirect ones such as loss of wildlife habitat, declines in tourism, ability to treat wastewater and regional economic impacts. 

“The study rests on the fact that water resources emanating from the Headwaters Counties are neither consistent nor unlimited, subject to considerable future uncertainty,” the report states. “Besides year-to-year weather variations, longer-term climate changes are evident, and climate scientists expect these trends in climate change to continue.” 

Using data from Colorado State University’s Climate Center, the report states that, in comparing 2000-2023 to the previous 49 years, climate change has lowered spring snowpack by 3-23%, led to earlier spring runoffs, lowered streamflows by 3-19%, led to a decline in summer soil moisture and increased evaporative demand by around 5%. 

The report details that these impacts to temperature, precipitation, snow-water equivalent in snowpack, runoff, streamflows and soil moisture will continue in the coming decades and are likely to have ripple effects on Northwest Colorado’s largest economic sectors. 

How water impacts Northwest counties’ economies 

The report describes the economic prospects for these six counties as “bright, as long as there are adequate water supplies to sustain them.” 

“All the economic sectors which bring economic well-being to the headwaters counties depend heavily on water,” the report states. “Maintaining the recently expanded current levels of activity, much less meeting higher levels, will be the challenge.”

Between 2010 and 2023, the population of the six counties grew by around 9,000 people, or 6%, with Gunnison, Summit and Grand counties experiencing some of the fastest growth — increasing by 13%, 8.4% and 8%, respectively. This growth is expected to continue, with populations anticipated to increase by an additional 20% by 2050.  

In addition to the growth in year-round residents, all six counties also have to contend with second homeowners — which it reports account for around 40% of the region’s dwellings — and a growing number of tourists. In 2024, the six counties had an estimated 17.8 million visitors. Eagle County, according to the report, had the largest number of visitors: 5.5 million.

Recreation and tourism are among the region’s major economic drivers, joining agriculture, extractive industries — including coal, oil and gas and mining — and hydropower generation. All of which, the report states, are “highly water-dependent,” with variances in the nature and intensity of their dependence.

The region’s three major river basins — the Colorado, Gunnison and Yampa-White-Green — drew around 2.1 million participants for water-driven outdoor recreation in 2020, including fishing, boating, snowsports and more. According to the report, the total gross domestic product generated by these water-based recreational activities that year was over $2.8 billion. 

They also generated over 35,800 jobs, $1.7 billion in wages and $272.4 million in state and local taxes. 

“These recreational activities are all extremely dependent on water supplies arriving at the “right volume, place, time, temperature and quality,” the report states. 

Take, for example, the snowsports industry, which is the main source of economic stimulus for these counties in the winter. As a state, Colorado reported having nearly a quarter of the country’s ski visitor days in 2024. The ski industry generated about $4.85 billion and 51,000 jobs in the 2022-2023 season, according to a study from RRC Associates. In Summit County alone, the economic impact of skiing was estimated at $1.2 billion in 2022 by a 2026 report from Gitnux. 

However, this past winter’s record-low snowpack illustrated how changes to hydrology and climate could lead to closed ski runs, reduced employee hours and expenditures, and shorter seasons. 

Future climate models are clear that things will be getting hotter in Colorado, meaning that, while models show increased winter precipitation — 7% more at Vail Mountain by 2050 compared to 1970-1999 — it is more likely to fall as rain and not snow. With peak snowpack and snowmelt also likely to shift weeks earlier by 2050, the report states that ski resorts’ opening and closing dates will be less certain, and seasons are likely to be shorter — threatening entire ski town economies. 

Facing this uncertainty, ski resorts are increasing their reliance on snowmaking, and therefore, on water. 

According to the report, many resorts have completed or are planning expansions to combat changing and uncertain hydrology. Winter Park, Granby Ranch, Copper Mountain, Arapahoe Basin, Keystone Resort, Vail Mountain and Aspen Snowmass are listed among those planning to expand snowmaking. 

By 2050, snowmaking water demands are expected to increase by nearly 141% at Crested Butte Mountain Resort, nearly 97% at Routt County resorts, 79% at Summit County resorts and 75% at Grand County resorts. 

Another example of how water could impact the region’s economy is around agriculture, which represents the headwaters counties’ “most water intensive and most consumptive” economic sector. 

Around one-fifth of the land in these six counties is privately owned agricultural land, which generates around 2,000 jobs and around $95 million in market value from crop and livestock sales, but also supplements “the forces of attraction for visitors,” the report states. 

“Rural, agrarian lifestyle and aesthetics work in combination with vast, undeveloped public lands and recreational amenities to bring visitors who recreate in the counties,” it adds. 

Farmers and ranchers, however, are facing a shortfall of water, which reduces production, lowers sales volume and profit, reduces employment opportunities and results in less economic activity generated by the sector.