[dsr3]

That's a very good point! The feasibility studies could solve the engineering question but social/economic (not as in cost-benefit, but in which group/organization/corporation will have more priority) is much more harder to solve.

But in my personal guess, a strong NGO/political activism by CA could influence the canal for the better. After all, construction of such canal, aside from having the support of the Federal Government, would requires an interstate compact/agreement. California would probably impose a decent environmental standard. Furthermore, Southeast states would also impose a strong limitation on the waters they will agree to divert. Unlike China, US States has strong sovereignty on matter like this and it would probably lead to some kind of equilibrium on the 'sustainable' water diversion rate.