Climate Change and the European Water Dimension - Agri ...

member states. Moreover some agencies take a reactive “crisis management”
approach to droughts, rather than a proactive risk management approach.
• At a European scale the approach to drought lags behind other industrialized
countries, with no coordinated European drought forecasting, monitoring and
mitigation network, or commitment to European scale drought research and best
practice to reduce vulnerability.
What is the economic cost of droughts to Europe?
Drought affects all sectors of society in very complex and interactive ways and
therefore its economic cost is difficult to quantify. Typically, published data on the
economic cost of a drought is based upon one sector, in one area, and in one year.
In addition, economic losses in a drought-affected area can result in improved
demand in another area – so the scale at which losses are calculated can be
important. For example, while the total volume of some French agricultural products
fell by up to 60% in 2003, the total value of production was largely unaffected. The
reduced production forced prices up – financial losses in drought-affected areas were
matched by higher profits in the less affected areas.
Planning for future droughts requires good data, and the capability to interpret it
appropriately. However, there is no established methodology to quantify the
economic, social and environmental costs of droughts. Notably the UN Economic
Commission for Latin America and the Caribbean (ECLAC) has done some work to
develop such methodologies. The EC Humanitarian Office (ECHO) has also
sponsored studies on how these methodologies might be developed (CRED, 1997).
These improved methods are essential if reliable estimates are to be made of the
economic costs of climate induced changes in European drought severity. Even with
these serious difficulties, it is apparent from Table V.B.1 that droughts have a major
economic impact upon Europe.
Box 1
Economic costs of droughts compared to floods
Munich Re has estimated the total economic cost (primarily from agricultural data) of
the 2003 drought as approximately US$13 billion. This is comparable to their
estimate of US$13.5 billion for the August 2002 floods. This is consistent with a
recent study by the US National Drought Mitigation Centre (1998) which
summarized the socio-economic impact of droughts - comparing the warning time,
duration, frequency, fatalities, costs and losses and the spatial extent with similar
figures for floods and hurricanes. The costs of the worst recent drought in the USA
(1988-89, $39-40 billion) were on average more than twice the costs of the worst
flood (1993, Mississippi valley, $15-28 billion).
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