IDEAS home Printed from https://ideas.repec.org/a/spr/waterr/v27y2013i6p1707-1720.html
   My bibliography  Save this article

Methods to Assess Costs of Drought Damages and Policies for Drought Mitigation and Adaptation: Review and Recommendations

Author

Listed:
  • Ivana Logar
  • Jeroen Bergh

Abstract

This article examines available methods for assessing all types of drought costs, including both damage costs and costs arising from adopting policy measures to encourage mitigation of, and adaptation to, droughts. It first discusses damage costs, distinguishing between direct, indirect and non-market costs. Then it examines the suitability of existing methods for estimating drought costs in different economic sectors, their underlying theoretical assumptions, complementarity between different methods, and conditions relevant for their application. The latter include precision, ability to deal with future climate change risks, data needs and availability, and required financial and human resources. The article further considers potential policies for drought mitigation and adaptation and different cost types associated with them. It ends with providing recommendations for good practices regarding the use of methods as well as drought mitigation and adaptation policies. Copyright Springer Science+Business Media B.V. 2013

Suggested Citation

  • Ivana Logar & Jeroen Bergh, 2013. "Methods to Assess Costs of Drought Damages and Policies for Drought Mitigation and Adaptation: Review and Recommendations," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 27(6), pages 1707-1720, April.
  • Handle: RePEc:spr:waterr:v:27:y:2013:i:6:p:1707-1720
    DOI: 10.1007/s11269-012-0119-9
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s11269-012-0119-9
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1007/s11269-012-0119-9?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Llop, Maria, 2008. "Economic impact of alternative water policy scenarios in the Spanish production system: An input-output analysis," Ecological Economics, Elsevier, vol. 68(1-2), pages 288-294, December.
    2. David Hensher & Nina Shore & Kenneth Train, 2005. "Households’ Willingness to Pay for Water Service Attributes," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 32(4), pages 509-531, December.
    3. Ronald C. Griffin & James W. Mjelde, 2000. "Valuing Water Supply Reliability," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 414-426.
    4. Boyd, Roy & Ibarrarã N, Maria E., 2009. "Extreme climate events and adaptation: an exploratory analysis of drought in Mexico," Environment and Development Economics, Cambridge University Press, vol. 14(3), pages 371-395, June.
    5. Charlotte Benson & Edward Clay, 1998. "Drought and Sub-Saharan African Economies," World Bank Publications - Reports 9884, The World Bank Group.
    6. Kulshreshtha, S. N. & Klein, K. K., 1989. "Agricultural drought impact evaluation model: A systems approach," Agricultural Systems, Elsevier, vol. 30(1), pages 81-96.
    7. Pauw, Karl & Thurlow, James & van Seventer, Dirk, 2010. "Droughts and floods in Malawi," IFPRI discussion papers 962, International Food Policy Research Institute (IFPRI).
    8. Howe Charles W. & Smith Mark Griffin & Bennett Lynne & Brendecke Charles M. & Flack J. Ernest & Hamm Robert M. & Mann Roger & Rozaklis Lee & Wunderlich Karl, 1994. "The Value of Water Supply Reliability in Urban Water Systems," Journal of Environmental Economics and Management, Elsevier, vol. 26(1), pages 19-30, January.
    9. Ari M. Michelsen & Robert A. Young, 1993. "Optioning Agricultural Water Rights for Urban Water Supplies During Drought," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 75(4), pages 1010-1020.
    10. Wittwer, Glyn & Griffith, Marnie, 2010. "Closing the factory doors until better times: CGE modelling of drought using a theory of excess capacity," 2010 Conference (54th), February 10-12, 2010, Adelaide, Australia 59263, Australian Agricultural and Resource Economics Society.
    11. Islam, Nazrul, 2003. "What Does A Dry Season Mean To The Western Australian Economy? A Cge Investigation," 2003 Conference (47th), February 12-14, 2003, Fremantle, Australia 57895, Australian Agricultural and Resource Economics Society.
    12. Maria Berrittella & Katrin Rehdanz & Arjen Y. Hoekstra & Roberto Roson & Richard S.J. Tol, 2006. "The Economic Impact Of Restricted Water Supply: A Computable General Equilibrium Analysis," Working Papers FNU-93, Research unit Sustainability and Global Change, Hamburg University, revised Jul 2006.
    13. Holden, Stein & Shiferaw, Bekele, 2004. "Land degradation, drought and food security in a less-favoured area in the Ethiopian highlands: a bio-economic model with market imperfections," Agricultural Economics, Blackwell, vol. 30(1), pages 31-49, January.
    14. Nick Carroll & Paul Frijters & Michael Shields, 2009. "Quantifying the costs of drought: new evidence from life satisfaction data," Journal of Population Economics, Springer;European Society for Population Economics, vol. 22(2), pages 445-461, April.
    15. R. Quentin Grafton & Michael B. Ward, 2008. "Prices versus Rationing: Marshallian Surplus and Mandatory Water Restrictions," The Economic Record, The Economic Society of Australia, vol. 84(s1), pages 57-65, September.
    16. Woo, Chi-Keung, 1994. "Managing water supply shortage : Interruption vs. pricing," Journal of Public Economics, Elsevier, vol. 54(1), pages 145-160, May.
    17. Brouwer, Roy, 2000. "Environmental value transfer: state of the art and future prospects," Ecological Economics, Elsevier, vol. 32(1), pages 137-152, January.
    18. Horridge, Mark & Madden, John & Wittwer, Glyn, 2005. "The impact of the 2002-2003 drought on Australia," Journal of Policy Modeling, Elsevier, vol. 27(3), pages 285-308, April.
    19. David Hensher & Nina Shore & Kenneth Train, 2006. "Water Supply Security and Willingness to Pay to Avoid Drought Restrictions," The Economic Record, The Economic Society of Australia, vol. 82(256), pages 56-66, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. García-León, David & Standardi, Gabriele & Staccione, Andrea, 2021. "An integrated approach for the estimation of agricultural drought costs," Land Use Policy, Elsevier, vol. 100(C).
    2. Caroline King-Okumu, 2018. "Valuing Environmental Benefit Streams in the Dryland Ecosystems of Sub-Saharan Africa," Land, MDPI, vol. 7(4), pages 1-23, November.
    3. Joost R. Santos & Sheree T. Pagsuyoin & Lucia C. Herrera & Raymond R. Tan & Krista D. Yu, 2014. "Analysis of drought risk management strategies using dynamic inoperability input–output modeling and event tree analysis," Environment Systems and Decisions, Springer, vol. 34(4), pages 492-506, December.
    4. Jessica Bhardwaj & Yuriy Kuleshov & Andrew B. Watkins & Isabella Aitkenhead & Atifa Asghari, 2021. "Building capacity for a user-centred Integrated Early Warning System (I-EWS) for drought in the Northern Murray-Darling Basin," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 107(1), pages 97-122, May.
    5. Kang, Hyunwoo & Sridhar, Venkataramana & Mills, Bradford F. & Hession, W. Cully & Ogejo, Jactone A., 2019. "Economy-wide climate change impacts on green water droughts based on the hydrologic simulations," Agricultural Systems, Elsevier, vol. 171(C), pages 76-88.
    6. Dallimer, Martin & Martin-Ortega, Julia & Rendon, Olivia & Afionis, Stavros & Bark, Rosalind & Gordon, Iain J. & Paavola, Jouni, 2020. "Taking stock of the empirical evidence on the insurance value of ecosystems," Ecological Economics, Elsevier, vol. 167(C).
    7. Chhinh Nyda & Cheb Hoeurn & Chea Bora & Heng Naret, 2016. "Using Reservoirs to Adapt to Drought in Agriculture: A Cost-Benefit Analysis from Cambodia," EEPSEA Research Report rr20160317, Economy and Environment Program for Southeast Asia (EEPSEA), revised Mar 2016.
    8. Yaojie Yue & Lin Wang & Jian Li & A-xing Zhu, 2018. "An EPIC model-based wheat drought risk assessment using new climate scenarios in China," Climatic Change, Springer, vol. 147(3), pages 539-553, April.
    9. Manman Zhang & Dang Luo & Yongqiang Su, 2022. "Drought monitoring and agricultural drought loss risk assessment based on multisource information fusion," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 111(1), pages 775-801, March.
    10. Vermeulen, Sam & Cools, Jan & Staes, Jan & Van Passel, Steven, 2023. "A Review of Economic Assessments of Drought Risk Reduction Approaches in Agriculture," 97th Annual Conference, March 27-29, 2023, Warwick University, Coventry, UK 334519, Agricultural Economics Society - AES.
    11. Jaume Freire-González & Christopher A. Decker & Jim W. Hall, 2017. "A Scenario-Based Framework for Assessing the Economic Impacts of Potential Droughts," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 3(04), pages 1-27, October.
    12. Nguyen An Thinh & Nguyen Ngoc Thanh & Luong Thi Tuyen & Luc Hens, 2019. "Tourism and beach erosion: valuing the damage of beach erosion for tourism in the Hoi An World Heritage site, Vietnam," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 21(5), pages 2113-2124, October.
    13. Stavros Sakellariou & Marios Spiliotopoulos & Nikolaos Alpanakis & Ioannis Faraslis & Pantelis Sidiropoulos & Georgios A. Tziatzios & George Karoutsos & Nicolas R. Dalezios & Nicholas Dercas, 2024. "Spatiotemporal Drought Assessment Based on Gridded Standardized Precipitation Index (SPI) in Vulnerable Agroecosystems," Sustainability, MDPI, vol. 16(3), pages 1-16, February.
    14. Freire-González, Jaume & Decker, Christopher & Hall, Jim W., 2017. "The Economic Impacts of Droughts: A Framework for Analysis," Ecological Economics, Elsevier, vol. 132(C), pages 196-204.
    15. Farhang Daneshmand & Akbar Karimi & Mohammad Nikoo & Mohammad Bazargan-Lari & Jan Adamowski, 2014. "Mitigating Socio-Economic-Environmental Impacts During Drought Periods by Optimizing the Conjunctive Management of Water Resources," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 28(6), pages 1517-1529, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Freire-González, Jaume & Decker, Christopher & Hall, Jim W., 2017. "The Economic Impacts of Droughts: A Framework for Analysis," Ecological Economics, Elsevier, vol. 132(C), pages 196-204.
    2. Zhang, Fan & Fogarty, James, 2015. "Nonmarket Valuation of Water Sensitive Cities: Current Knowledge and Issues," Working Papers 207694, University of Western Australia, School of Agricultural and Resource Economics.
    3. Elizabeth L. Roos & Heinrich R. Bohlmann & Jan H. van Heerden & Nicholas Kilimani, 2016. "Counting the cost of drought induced productivity losses in an agro-based economy: The case of Uganda," Working Papers 616, Economic Research Southern Africa.
    4. Clevo Wilson & Wasantha Athukorala & Benno Torgler & Robert Gifford & Maria A. Garcia-Valiñas & Shunsuke Managi, 2021. "Willingness to pay to ensure a continuous water supply with minimum restrictions," Empirical Economics, Springer, vol. 61(3), pages 1519-1537, September.
    5. Dupont, Diane P., 2011. "Reclaimed Wastewater and the WTP to avoid Summer Water Restrictions: Incorporation Endogenous Free-riding Beliefs," 85th Annual Conference, April 18-20, 2011, Warwick University, Coventry, UK 108778, Agricultural Economics Society.
    6. Masato Yamazaki & Atsushi Koike & Yoshinori Sone, 2018. "A Heuristic Approach to the Estimation of Key Parameters for a Monthly, Recursive, Dynamic CGE Model," Economics of Disasters and Climate Change, Springer, vol. 2(3), pages 283-301, October.
    7. Mesa-Jurado, Maria A. & Martin-Ortega, Julia & Ruto, Eric & Berbel, Julio, 2011. "The economic value of guaranteed water supply for irrigation under scarcity conditions," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114650, European Association of Agricultural Economists.
    8. Bethany Cooper & Michael Burton & Lin Crase, 2019. "Willingness to Pay to Avoid Water Restrictions in Australia Under a Changing Climate," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 72(3), pages 823-847, March.
    9. Jaume Freire-González & Christopher A. Decker & Jim W. Hall, 2017. "A Scenario-Based Framework for Assessing the Economic Impacts of Potential Droughts," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 3(04), pages 1-27, October.
    10. Maria de los Angeles Garcia Valinas, 2006. "Analysing rationing policies: drought and its effects on urban users' welfare (Analysing rationing policies during drought)," Applied Economics, Taylor & Francis Journals, vol. 38(8), pages 955-965.
    11. Joost R. Santos & Sheree T. Pagsuyoin & Lucia C. Herrera & Raymond R. Tan & Krista D. Yu, 2014. "Analysis of drought risk management strategies using dynamic inoperability input–output modeling and event tree analysis," Environment Systems and Decisions, Springer, vol. 34(4), pages 492-506, December.
    12. Steven Buck & Maximilian Auffhammer & Stephen Hamilton & David Sunding, 2016. "Measuring Welfare Losses from Urban Water Supply Disruptions," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 3(3), pages 743-778.
    13. Cooper, Bethany & Crase, Lin & Burton, Michael P., 2010. "Urban Water Restrictions: Attitudes and Avoidance," 2010 Conference (54th), February 10-12, 2010, Adelaide, Australia 58892, Australian Agricultural and Resource Economics Society.
    14. Breisinger, Clemens & Zhu, Tingju & Al Riffai, Perrihan & Nelson, Gerald & Robertson, Richard & Funes, Jose & Verner, Dorte, 2011. "Global and local economic impacts of climate change in Syria and options for adaptation:," IFPRI discussion papers 1091, International Food Policy Research Institute (IFPRI).
    15. Alfonso Expósito, 2019. "Valuing Households’ Willingness to Pay for Water Transfers from the Irrigation Sector: A Case Study of the City of Seville (Southern Spain)," Sustainability, MDPI, vol. 11(24), pages 1-18, December.
    16. Al-Riffai, Perrihan & Breisinger, Clemens & Verner, Dorte & Zhu, Tingju, 2012. "Droughts in Syria: An Assessment of Impacts and Options for Improving the Resilience of the Poor," Quarterly Journal of International Agriculture, Humboldt-Universitaat zu Berlin, vol. 51(1), pages 1-29, February.
    17. Woo, Chi-Keung & Wong, Wing-Keung & Horowitz, Ira & Chan, Hing-Lin, 2012. "Managing a scarce resource in a growing Asian economy: Water usage in Hong Kong," Journal of Asian Economics, Elsevier, vol. 23(4), pages 374-382.
    18. Katrin Millock & Céline Nauges, 2010. "Household Adoption of Water-Efficient Equipment: The Role of Socio-Economic Factors, Environmental Attitudes and Policy," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 46(4), pages 539-565, August.
    19. John Freebairn, 2013. "Imperfect Knowledge and Urban Water Decisions," Economic Papers, The Economic Society of Australia, vol. 32(1), pages 32-40, March.
    20. Francisco González Gómez & Jorge Guardiola & Edna Guidi Gutiérrez, 2012. "Willingness to pay more for water in a climate of confrontation: The case of Sucre, Bolivia," Working Papers. Serie EC 2012-03, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:waterr:v:27:y:2013:i:6:p:1707-1720. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.