Editor’s note: This article is published through the Great Salt Lake Collaborative, a solutions journalism initiative that partners news, education and media organizations to help inform people about the plight of the Great Salt Lake.
On top of environmental dangers, a new University of Utah study warns, a dried lake bed and toxic dust storms could bring huge business losses to the Wasatch Front.
Spiraling dangers from a dried-up Great Salt Lake would gradually spread well beyond its shores, a study warns, eventually threatening Utahns’ health and economic well-being.
Not only does the prospect of a dried lake bed menace one of the West’s cornerstone ecosystems, but the effects of its collapse for the Wasatch Front also could pose rising risks to public health, quality of life and the very economic viability of the state’s most populous area, a new legal analysis finds.
Scholars with the Wallace Stegner Center at the University of Utah‘s S.J. Quinney College of Law posit what they call “the unthinkable” — a desiccated Great Salt Lake-turned-Great Salt Dust Bowl, disruptive of weather patterns and capable of spewing heavy-metal-laden dust over the region.
Prior research has already predicted this dire scenario, with some labeling it “an environmental nuclear bomb” as the saline lake’s water volumes have fallen to around half their historic levels in recent years, drawing worldwide attention and mixed reactions from policymakers.
This legal study, published by the Washington, D.C.-based Environmental Law Institute, examines in that bleak light a host of potential business and financial risks.
The co-authors find these threats could grow hefty enough to reach well past industries directly dependent on the lake’s bounty, such as brine shrimp harvesters, mineral extractors and birding and boating enthusiasts — and affect the bottom lines of publicly traded companies and the region’s overall economy.
The trajectory of full-on lake collapse could wreak billions in damage over time to the outlook as well for property values along the Wasatch Front, tourism, the ski industry, health insurers, the ability of Utah‘s technology sector to recruit vital talent and far beyond.
Those business risks, they contend, eventually would become material enough to trigger formal reporting requirements under federal law. Publicly traded firms, municipalities issuing public bonds and even business executives themselves, experts say, could soon be required to disclose the impacts of such financial dangers to regulators, investors and the public — or otherwise face legal exposure — were the effects of a failed lake to deepen.
The article looked at past research and existing regulatory triggers and applied lessons from the evaporating declines of other salty lakes around the globe, including Owens Lake, Mono Lake and the Salton Sea in California; Iran’s Lake Urmia; and the Aral Sea between Kazakhstan and Uzbekistan.
It found that the Great Salt Lake’s proximity to nearly 2.8 million Utahns offers a unique paradigm “for how ecological collapse can generate far-reaching financial liabilities across economic sectors, with profound implications for securities disclosure liability.”
“Most alarmingly,” say the co-authors affiliated with the Stegner Center’s Great Salt Lake Project, “it is increasingly clear that the policy tools currently available are insufficient to meet the challenge.
“While hope remains that the region will find the willingness to take the necessary steps,” they write, “without drastic changes, failure seems just a matter of time.”
Adding economic risk to ‘a parade of horribles’
Brigham Daniels, study co-author, U. law professor and director of its Great Salt Lake Project, emphasized in an interview that a collapsing lake scenario is “by no means baked in.”
The article, he said, sought to highlight additional reasons why “it is very, very important to focus our attention in changing the trajectory.”
The piece appeared in the law journal’s April-May edition, written by Daniels; Elizabeth Parker, a senior attorney and senior fellow with the Stegner Center’s law and policy program; Abigail Allen, an associate accounting professor at Brigham Young University; and Corinne Doerner, a Great Salt Lake Project research fellow.
Daniels said the study’s take on environmental crises and securities liability added to “a parade of horribles that we could tick off about what’s going to happen if the lake fails.”
“This is one of the other bad consequences, that it’s going to hurt some corporations’ bottom lines,” the professor said. “And long before those bottom lines are hurt, disclosure requirements are going to kick in under security laws, that the material risks of those kinds of impacts are going to need to be disclosed.”
Yet altering the lake’s future by restoring ample water levels to fend off an ecological-turned-economic disaster, he said, remains well within reach.
“The Great Salt Lake,” Daniels said, “is really presenting a question to us: ‘Which future do we want?’ And because its challenges are caused, by and large, by people, we actually have an opportunity to navigate toward human-led solutions.”
Positive signs for the lake?
State lawmakers have launched an overhaul of many of the state’s pioneer-era water laws in hopes of replenishing flows to the lake, in a strategy many expect will to take years to unfold.
The lake’s 20-year decline has stabilized of late after a recent year of record snow replenished mountain streams and reservoirs, allowing more water to flow to the lake. It currently is 5 feet higher than its all-time low, but it will need to rise another 5 feet to attain a minimum healthy elevation.
According to a leading Utah advocate for brine shrimpers and other businesses whose futures hinge on the lake’s health, these are uplifting signs that policy steps and more favorable weather are bringing beneficial effects.
“If there’s good news about what’s going on, it’s that the lake today is meeting most of its beneficial uses,” said Tim Hawkes, board chair of the Great Salt Lake Brine Shrimp Cooperative.
“We have a healthy brine shrimp industry. We have a healthy Gilbert Bay ecosystem. We have tourism. We have lake effects now, and we have a healthy and thriving ski industry,” said Hawkes, also a former state lawmaker. “And so it’s important to realize that these are very real threats, but they’re probably decadal threats more than, you know, the kind of threat that’s today.”
Still, the Great Salt Lake’s direction could easily veer again toward a danger zone with a single hot dry summer, Hawkes said, followed by an anemic winter for precipitation.
More fundamentally, Hawkes said, he and many key industry allies would agree that “Utah‘s economic health is tied to the health of the lake. That is poorly understood in the business community and poorly understood among the general public.”
Deeda Seed, a senior campaigner with the Center for Biological Diversity, a nonprofit that is suing the state over the lake’s status, said there’s long been an emerging understanding of serious economic repercussions from the lake dying “and that it hits every sector.”
“But what folks at the Stegner Center have done,” she said, “is really dived into what uncertainty is created out of this, and what that means from a risk perspective in business.”
Expanding circles of danger
The lake shriveled to its lowest recorded level in 2022, a decline that the Stegner Center authors note has been driven by unsustainable water consumption due to agricultural diversions and municipal and industrial uses.
The retreat exposed over 800 square miles of dried lake bed, their study notes, much of it infused with arsenic and other toxins now threatening to become airborne hazards.
Citing a report by the state-led Great Salt Lake Advisory Council, U. scholars considered economic losses from a declining lake reaching as high as $25.4 billion to $32.6 billion over 20 years, with more than 6,500 jobs lost.
In dire and expanding concentric circles of risk, the Stegner Center authors build on prior research to spell out how mineral extraction industries would face losses of hundreds of jobs and up to $1.3 billion, while impacts on the brine shrimp sector could hamper a significant piece of the world’s aquatically grown food supply.
Losses to birding, hunting, sailing, hiking, swimming and other recreation from a shrunken lake would cost additional tens of millions, the study suggests, based partly on similar, though far smaller, lake declines elsewhere.
The effects of persistent dust storms would jeopardize snowfall levels across the region, the authors write, potentially affecting Utah‘s snowpack-dependent water supplies and its economic reliance on winter recreation.
“On a smaller scale,” the article warns, “the recreational use value from the downhill ski industry would decline along with the lake, resulting in annual ski resort losses.”
Damage to other sectors, quality of life
Real estate would likely take a multibillion-dollar hit in direct relation to air quality and other environmental degradation. The study notes a far smaller collapse of California‘s Salton Sea brought a $7 billion devaluation to a much more sparsely populated surrounding property market.
“Since real estate and homes in highly air-polluted areas are unfavorable,” study says, “the toxic and airborne dust emerging from the lake bed will lower real estate market values across the Wasatch Front.”
Health-related economic impacts could be sizable, according to the research, which indicated that communities near Lake Urmia, Aral Sea, Owens Lake and Mono Lake alike all reported elevated illness rates. Writ on a Wasatch Front scale, similar effects could pose severe and costly health consequences for the state’s insurers and public health systems.
But the most profound economic consequences for Utah, the study suggests, might be a reshaping of its entire long-term future, with a decline in environmental conditions and diminished quality of life becoming “a powerful deterrent for business.”
“Dust from a shrinking lake could accelerate out-migration, reduce business attraction, and make employee retention increasingly difficult,“ the authors write, ”presenting severe challenges for Utah‘s economic future.”
That would be especially true for some of the crown jewels of its existing economic, the study finds, “particularly in industries such as technology, finance and professional services, where employee and environmental well-being are central to siting decisions.”
“As air quality worsens and the region’s habitability declines,” the article says, “Utah may experience a slowdown in economic growth compared to its potential under more favorable environmental conditions.” Under that collapse scenario, it says, the breadth of adversely affected industries will only widen as the severity of the economic risks escalate.
Triggers on reporting the risks
If the lake keeps drying out, the scholars conclude, risks from economic consequences will eventually trigger legal requirements for public companies in affected industries or with large economic footprints in the region to disclose those facts to investors and the public.
“The further the lake is pushed toward ecological collapse,” they caution, “the broader and more severe the impacts become, and, consequently, the larger the number of entities that will have to provide disclosures and the more damaging those disclosures will prove.”
That also extends, the authors write, to governments that issue municipal bonds, which would “bear significant risks associated with both the disclosure and real economic consequences of Great Salt Lake’s rapid deterioration.”
Yet the study notes that recently expanded disclosure rules under U.S. securities law, prompted by concerns over climate change, could now be sidetracked under the Trump administration. That’s particularly true what’s called the “Final Rule” under regulations enforced by the U.S. Securities and Exchange Commission, which is also mired in litigation.
Existing regulations, they write, already create “significant disclosure obligations” for Great Salt Lake-affected firms” and those will become “increasingly more urgent as deterioration continues.”
“If the lake continues to dry,” it adds, “there is no silver lining for regional companies and industries.”
More Great Salt Lake reporting: Here’s what it takes to restore Great Salt Lake back to healthy levels
