Analysis: The two largest reservoirs in the US have hit record-low levels

Nature & Climate Perspective

**Severe multi-decadal drought driving US reservoir depletion degrades critical riparian corridors and severely undermines baseline LULUCF sequestration capacities. **

• Accelerated degradation of freshwater and riparian ecosystems across the Colorado River basin leads to severe biodiversity loss and localized ecological collapse.
• Desiccation of previously submerged and transitional vegetative areas creates carbon feedback loops, reducing regional soil organic carbon retention and net LULUCF carbon sink performance.
• Long-term structural hydrological deficits exacerbate regional desertification, permanently lowering watershed resilience against ongoing climate shocks.

Market & Policy Outlook

**Diminished hydroelectric generation capacity threatens corporate clean energy sourcing under SBTi and amplifies non-permanence risks under ICVCM guidelines. **

• Federal water allocations and curtailment mandates expose regional utilities to regulatory intervention and operational limits under interstate water compacts.
• Reductions in zero-carbon hydroelectric dispatch diminish local I-RECs supply, forcing corporate power buyers to recalculate Scope 2 emissions and adjust SBTi-aligned procurement pathways.
• Extreme physical water stress elevates non-permanence risk ratings for regional offset projects, directly challenging compliance with the ICVCM Core Carbon Principles (CCPs) on risk mitigation and robust quantification.