What is the Cost of Drought?

What is the Economic Cost of Drought?

I began searching for ways to lessen the effects of drought, and man oh man I hit the mother lode. I learned that the US government has a drought website that has a plethora of information. I learned that in 2005 the state was the 7^th highest consumers of water/day.   Drought causes many economic problems.  Drought leaves crops weaker and more susceptible to disease or infestation causing reduced yields or crop failure.  Wildfires are the most dangerous and one of the most expensive effect of drought both in dollars and in habitat loss.  Lack of water flows from drought cause hydroelectric dams to shutdown resulting in power shortage.  Municipal water shortages are major effect of drought causing water restrictions.  Fish and wildlife mortality due to lack of food, water and cover that occurs when drought persist. Drought affects many parts of the US economy.   The article continues to say that agriculture is the most sensitive to drought because of its high demand for water.  High temperatures cause an increase in energy demands, and the managing of reservoirs /hydroelectric facilities are increasingly more expensive the less water there is.  The article also brings up every year from 1896 to 1995 some part of the US there has been a drought and it has caused more losses than flooding and hurricanes.  Water Quality is worse during a drought causing cities and states to more extensively treat due to higher toxicity levels in smaller volumes water.  Drought forecasting is proactive response to counteract its effects. Preparedness is a better cheaper choice as it cost less to prepare than it does to pay for the recovery.  The Colorado ecosystem is still reeling from the last drought for example the Mountain Pine Beetle devastation. 
Questions:How can we lessen the problem effects of drought?
How can we improve the quantity and quality of water in Colorado?


What laws are in place or could be in place to limit the use of water in Colorado?