Rising economic damage from droughts: a growing global challenge, according to the OECD

  • According to the OECD, economic damage caused by droughts will increase by 35% by 2035.
  • Nearly 40% of the planet is experiencing more frequent and intense droughts, affecting both developed and developing countries.
  • Overexploitation of aquifers and soil degradation threaten water security and agricultural production.
  • The OECD recommends investing in prevention and efficient water management to improve resilience to drought.

economic damage due to droughts

The droughts They have ceased to be perceived as an isolated phenomenon and have become a recurring challenge affecting societies and economies around the world. The intensification of these events, closely linked to climate change, not only puts agriculture and water supplies at risk, but also brings increasingly high economic costsInternational organizations warn of a future where more severe and prolonged droughts will be the norm, not the exception.

A recent report by the Organisation for Economic Co-operation and Development (OECD) provides figures that underline the seriousness of the problem. Experts predict that Economic losses associated with drought could increase by at least 35% by 2035, based on the current situation. This estimate reflects a trend affecting virtually the entire planet and warns of the urgent need to act to avoid a greater impact on the economy and society.

Global impact and increase in affected area

The report highlights that the Land area exposed to drought has doubled since the beginning of the 20th centuryIn recent decades, around 40% of the Earth has seen an increase in both the frequency and severity of these episodes. This reality is largely due to the imbalance in weather patterns caused by global warming: higher temperatures favor greater evaporation, reduce the amount of water available in the soil and hinder the natural recovery of aquifers.

The scientific models suggest that if global temperatures rise by 4°C, droughts could be up to seven times more intense and recurrent. This escalation does not discriminate by level of development: while poorer countries suffer most from hunger, migration, and loss of livelihoods, in advanced economies the monetary losses are equally significant. In 2021, farmers in the United States saw drought cause more than $1.100 billion in damage, while the summer of 2022 in Europe ended with losses exceeding €40.000 billion.

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Pressure on water resources and risks for the future

One of the most notable data of the study is the accelerated deterioration of the underground aquifersCurrently, 62% of the monitored aquifers show a continuous decrease in their levels, a clear symptom of overexploitation and misuse that compromises the water security in the medium and long term. Experts warn that, if current trends continue, the rate of depletion of these resources could reach double before 2100.

La soil degradation and the reduced capacity of ecosystems to provide vital services, such as climate regulation and water filtration, further aggravate the situation. Reduced river flows and lowering water tables will particularly affect regions already facing intensive water demands, such as the Mediterranean Basin and Southern Africa.

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Scientific uncertainty and the challenge of management

Although climate models indicate a clear upward trend in the risk of drought, there are still great unknowns regarding the exact speed and distribution of these effects. Differences between models and measurement methods make it difficult to make completely accurate predictions. Therefore, the report emphasizes the importance of strengthening monitoring systems and improving the integration of scientific research and public policy.

In this sense, pressure on basic resources such as water affects key activities, from food production to electricity generation and transportation. According to the OECD, this situation can translate into social and economic conflicts, especially if adequate adaptation measures are not adopted.

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Proposed solutions: prevention and adaptation

To respond to the challenge, the OECD insists on betting on the prevention and adaptation, promoting a more efficient water management, soil restoration, modernization of agricultural practices, and urban adaptation. These investments, far from being wasteful expenditure, can multiply the economic benefits by three—or even ten—fold compared to what is lost due to inaction.

The report suggests that a combination of integrated public policies and international collaboration will be essential to strengthen the resilience of societies in the face of increasing droughts. Improving planning, investing in more sustainable infrastructure, and raising public awareness are key steps to mitigate the negative effects and ensure a less uncertain future.

Evidence collected by the OECD shows that Droughts represent a serious and growing economic and social threatThe implementation of measures focused on sustainable water management and the protection of natural resources will be essential to minimize these impacts. Without concrete action, the damage could be prolonged, affecting the economic stability and well-being of millions of people for decades to come.


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