Reservoirs in arid regions often provide critical water storage but little is known about their greenhouse gas (GHG) footprint. While there is growing appreciation of the role reservoirs play as GHG sources, there is a lack of understanding of GHG emission dynamics from reservoirs in arid regions and implications for environmental policy. Here we present initial GHG emission measurements from Lake Powell, a large water storage reservoir in the desert southwest United States. We report CO₂-eq emissions from the shallow (< 15 m) littoral regions of the reservoir that are higher than the global average areal emissions from reservoirs (9.4 vs. 5.8 g CO₂-eq m⁻² d⁻¹) whereas fluxes from the main reservoir were two orders of magnitude lower (0.09 g CO₂-eq m⁻² d⁻¹). We then compared our measurements to modeled CO₂ + CH₄ emissions from the reservoir using four global scale models. Factoring these emissions into hydropower production at Lake Powell yielded low GHG emissions per MWh⁻¹ as compared to fossil-fuel based energy sources. With the exception of one model, the estimated hydropower emissions for Lake Powell ranged from 10−32 kg CO₂-eq MWh⁻¹, compared to ∼400−1000 kg CO₂-eq MWh⁻¹ for natural gas, oil, and coal. We also estimate that reduced littoral habitat under low water levels leads to ∼50% reduction in the CO₂ equivalent emissions per MWh. The sensitivity of GHG emissions to reservoir water levels suggests that the interaction will be an important policy consideration in the design and operation of arid region systems.