• The OECD’s ‘Global Drought Outlook: Trends, Impacts and Policies to Adapt to a Drier World’ finds that climate change is driving the severity of droughts, with 40% of the planet having experienced more frequent and intense droughts in recent decades. 

• Immediate and co-ordinated action across government agencies to anticipate, prevent, and adapt to evolving drought risk could help limit losses and damage, while enhancing the ability of communities and economies to withstand and recover from drought.

• The report by the Organisation for Economic Co-operation and Development (OECD) provides a global assessment of drought risk, impacts and policy in the context of climate change. 

• It examines observed and projected drought trends and their drivers, and explores how climate change influences the frequency, duration and intensity of drought events. It also highlights the wide‑ranging economic, social and environmental consequences of drought.

What is drought?

• Droughts are periods characterised by a significant hydrological imbalance in water sources or reservoirs, typically marked by “drier-than-normal” weather conditions. These periods are primarily driven by low rainfall and can be further intensified by high temperatures or strong wind, which accelerate water evaporation, as well as human activities.

• This imbalance affects various components of the water cycle, including soil moisture, surface water (e.g. lakes and rivers) levels, and groundwater reserves. 

Droughts are usually classified based on their main drivers and impacts:

i) Meteorological drought refers to a prolonged period of low precipitation.

ii) Agricultural (or ecological) drought refers to a condition where soil moisture is insufficient to meet the needs of crops and vegetation.

iii) Hydrological drought occurs when surface or groundwater water levels drop below average over a prolonged period.

• While interlinked, droughts are distinct from water scarcity, aridity, and desertification. 

• In fact, droughts are characterised by below-average water or precipitation levels, while water scarcity refers to an imbalance between water supply and demand. Water scarcity can thus arise independently of drought conditions, such as when water extraction surpasses the renewable supply, or as a result of water pollution and infrastructure failures. 

• Drought and aridity differ in their temporal nature. Whereas drought is a temporary phenomenon, aridity is a permanent climatic feature of regions with low rainfall and high evaporative demand, such as deserts. 

• Desertification, on the other hand, refers to the process of land degradation in arid regions, driven not only by droughts but also by unsustainable human activities such as agricultural expansion, deforestation, and urbanisation.

Drought stems from a combination of drivers

• Droughts are becoming increasingly frequent and severe worldwide. The report shows that the global land area affected by drought doubled between 1900 and 2020, with 40 per cent of the planet experiencing increased drought frequency and intensity in recent decades. 

• Many of the most extreme droughts in recorded history have occurred in recent years, including the 20-year drought in Mexico and the devastating 2022 drought in Europe and the United States.

• The growing risk of drought stems from a combination of drivers, with climate change at the core. 

• Rising temperatures increase evaporation, disrupt precipitation patterns, and reduce snowpack and glacier reserves. For instance, climate change made the 2022 European drought up to 20 times more likely and increased the likelihood of the ongoing drought in North America by 42 per cent. 

• Projections suggest that under a +4°C warming scenario, droughts could become up to seven times more frequent and intense compared to a scenario with no climate change.

• Human activities like deforestation, urban expansion, and unsustainable agricultural practices further worsen drought risk by degrading ecosystems and water resources. 

• Irrigation accounts for 70 per cent of global water withdrawals and, when practiced unsustainably, can exacerbate drought conditions by up to thirty times in some regions. 

• Urban development facilitates soil sealing, reducing water infiltration and aquifer recharge in all OECD countries. 

• These challenges will keep compounding existing climate pressures, further threatening freshwater availability.

• Droughts disrupt freshwater availability, with far-reaching effects on the ecosystems that rely on it. 

• An analysis reveals that, since 1980, about 37 per cent of global land has experienced significant soil moisture decline. 

• Similarly, groundwater levels are falling globally, with 62 per cent of monitored aquifers in decline, while many rivers worldwide are experiencing significant decreases in stream flow. 

• These changes in water availability accelerate soil degradation and negatively affect ecosystems such as forests and wetlands, affecting plants’ biomass and distribution. 

• This threatens biodiversity and disrupts essential ecosystem services, including water purification and carbon sequestration, exacerbating future drought risks through damaging feedback loops.

The socio-economic implications of drought

• An analysis highlights a sharp rise in the economic costs of drought, with losses and damages increasing globally at an annual rate of 3-7.5 per cent. 

• As water scarcity constrains entire sectors and disrupts trade, the OECD projects that an average drought event in 2025 is at least twice as costly as in 2000, while by 2035, costs are expected to be at least 35 per cent higher than today. 

• Agriculture is the most affected sector: in particularly dry years, crop yields can decline by up to 22 per cent, while a doubling of drought duration could reduce the production of key crops like soy and corn by up to 10 per cent. 

• In California, the 2021 drought alone caused $1.1 billion in agricultural losses, underscoring the vulnerability of even advanced economies. 

• However, the economic impacts of drought extend far beyond agriculture. 

• Severe droughts can reduce fluvial trade volumes by up to 40 per cent and reduce hydroelectric production by more than 25 per cent, affecting supply chains and energy availability. 

• Yet, current estimates remain context-specific, and further analysis is needed to fully understand the effects of drought on different sectors.

• The human toll of drought is equally stark. Despite accounting for only 6 per cent of natural disasters, droughts cause 34 per cent of all disaster-related deaths and exacerbate displacement and migration, especially in Sub-Saharan Africa. 

• Prolonged droughts trap people in vulnerable situations in cycles of poverty, heightening social inequalities. 

• Food security is also at stake, as observed in the Horn of Africa, where five consecutive years of low rainfall left 23 million people in severe hunger in 2023. 

• Combined, these impacts can trigger political instability, social unrest, and geopolitical tensions over scarce resources.

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