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A Scenario-Based Framework for Assessing the Economic Impacts of Potential Droughts

Author

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  • Jaume Freire-González

    (Environmental Change Institute, University of Oxford, Oxford University Centre for the Environment, South Parks Road, Oxford OX1 3QY, UK)

  • Christopher A. Decker

    (#x2020;Centre for Socio-Legal Studies, University of Oxford, Manor Road Building, Oxford OX1 3UQ, UK)

  • Jim W. Hall

    (Environmental Change Institute, University of Oxford, Oxford University Centre for the Environment, South Parks Road, Oxford OX1 3QY, UK)

Abstract

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 modeled 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.

Suggested Citation

  • 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.
    • Handle: RePEc:wsi:wepxxx:v:03:y:2017:i:04:n:s2382624x17500072
    DOI: 10.1142/S2382624X17500072
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    3. Giovanni M. Sechi & Alexei A. Gaivoronski & Jacopo Napolitano, 2019. "Optimising Pumping Activation in Multi-Reservoir Water Supply Systems under Uncertainty with Stochastic Quasi-Gradient Methods," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 33(5), pages 1881-1895, March.

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