In the absence of action to limit and adapt to climate change, the impact of droughts on Europe’s economy could reach over €65 billion a year by 2100, according to a JRC study published today in Nature Climate Change.

As a share of the total GDP of EU countries and the UK, this is more than double the annual €9 billion costs of droughts today: 0.15% of total GDP, compared to 0.07% today. Most of these impacts can be avoided by reducing carbon emissions to keep global warming well below 2°C by the end of the century, and by increasing the resilience of drought-sensitive sectors.

Climate change will cause more frequent and intense droughts in southern and western parts of Europe. This will lead to higher damages to economic sectors that depend on water availability, like agriculture, energy production and public water supply.

The researchers developed a new method of drought modelling to quantify these potential impacts across Europe’s regions. They found the highest increases in drought losses in southern and western parts of Europe, where drought conditions at 4°C could reduce regional agriculture economic output by 10%.

With no action, the economic costs as a share of GDP by 2100 could reach 0.3% in Romania and 0.24% in Bulgaria, the two countries with the highest projected losses in the EU. The impacts on Europe’s countries could be reduced by 40%-60% with appropriate mitigation and adaptation measures.
Action to lessen the impact of droughts

The study’s findings can help in targeting regional EU investments to address the unequal burden of drought impacts and the differences in adaptation capacities. The study recommends targeting adaptation measures in drought-sensitive regions and sectors, such as:

increase the natural retention capacity of river basins, creating the conditions for storage
water conservation and water saving practices;
improve water-use efficiency in power production and industry;
development of stress-resistant crops to enhance yield stability under water-shortage conditions.

Additional measures to lessen the impacts of droughts include economic diversification, insurance and other market tools, social safety nets, monitoring and data collection, and early warning and alert systems. The COPERNICUS Emergency Management Service (CEMS) produces real time drought information through the European Drought Observatory (EDO). The Observatory will be extended with a drought risk assessment under the ‘EDO for Resilience and Adaptation’ (EDORA) project, which aims to improve drought resilience and adaptation in EU Member States.
Background

The study is part of the JRC’s PESETA IV project, which aims to better understand the effects of climate change on Europe, for a number of climate change impact sectors, and how these effects could be avoided with mitigation and adaptation policies.

Climate change and environmental degradation are an existential threat to Europe and the world. To overcome these challenges, the Commission has developed a new growth strategy, the European Green Deal, that will transform the EU into a modern, resource-efficient and competitive economy, where:

there are no net emissions of greenhouse gases by 2050
economic growth is decoupled from resource use
no person and no place is left behind

The European Green Deal will turn climate and environmental challenges into opportunities, and make the transition just and inclusive for all.

The European Commission also recently adopted an EU strategy on adaptation to climate change. The new strategy sets out how the EU can adapt to the unavoidable impacts of climate change and become climate resilient by 2050.While climate change will alter the distribution of water in time and space, quantifications of drought risk under global warming remain uncertain. Here, we show that in Europe, drought damages could strongly increase with global warming and cause a regional imbalance in future drought impacts. In the absence of climate action (4 °C in 2100 and no adaptation), annual drought losses in the European Union and United Kingdom combined are projected to rise to more than €65 billion per year compared with €9 billion per year currently, or two times larger when expressed relative to the size of the economy. Drought losses show the strongest rise in southern and western parts of Europe, where drought conditions at 4 °C could reduce regional agriculture economic output by 10%. With high warming, drought impacts will become a fraction of current impacts in northern and northeastern regions. Keeping global warming well below 2 °C would avoid most impacts in affected regions.