Template-type: ReDIF-Paper 1.0
Author-Name: Ioannis Tikoudis
Author-Name: Margaux Gabriel
Author-Name: Walid Oueslati
Title: The toll of droughts: Environmental impacts, economic costs, and international consequences
Abstract: This paper examines the environmental, economic, and wider impacts of droughts, using statistical analyses, literature reviews, and ex-post calculations. Droughts contribute to land degradation and affect animal survival, though evidence on the resilience of fauna to droughts is limited. Strong evidence suggests that droughts reduce plant biomass in forests, wetlands, and croplands. Agriculture suffers significant losses, as crop volumes are estimated to drop by 5-22% in the driest years. Droughts also disrupt fluvial transport and hydroelectric power generation, though the economic impact on these sectors is harder to systematically quantify. The study finds that economic losses and damages due to droughts may be increasing at an annual rate that exceeds 3.0%, implying that the average drought episode in 2025 is at least twice as costly as it was in 2000. Additionally, droughts influence migration patterns and may contribute to conflict, though most of the evidence remains limited to Sub-Saharan Africa.
Classification-JEL: Q13; Q15; Q18; Q54; Q57; R23; D74
Keywords: agriculture, climate change, conflict, costs, droughts, ecosystem resilience, environmental security, food security, impacts, losses and damages, migration, water scarcity
Creation-Date: 2025-05-23
Number: 260
Handle: RePEc:oec:envaaa:260-EN