Estimating the potential economic impacts of drought is increasingly prominent in policy discussions on resilience to future population and climate changes. We develop a scenario-based analytical framework for estimating the economic impacts of droughts under a range of assumed climate and policy conditions. The scenarios modelled take account of different assumptions regarding a drought event, including: the source of the drought (green or blue water), temporality, and critically, long-term and short-term policy-making choices. Applying the framework to the UK economy we estimate that, depending on the severity of the drought event and short-term policy choices, the impacts could range from 0.35% to 4.3% of total output in terms of total production. Different long-term policy choices could mitigate the impacts for drought events with similar severity and duration.
A scenario-based framework for assessing the economic impacts of potential droughts
| | Publications| 17/07/2017
Water Economics andf Policy
Freire-González, J., Decker, C. Hill, J. (2017) A scenario-based framework for assessing the economic impacts of potential droughts. Water Economics and Policy, Volume 03.