As droughts, exacerbated by the human-induced degradation of the environment, are projected to affect three-quarters of the global population by 2050, it becomes crucial to invest in sustainable land and water management practices to mitigate their financial impacts, which currently exceed $307 billion annually worldwide. This urgent call for action was highlighted in a new report unveiled today at the Conference of the Parties (COP16) of the United Nations Convention to Combat Desertification (UNCCD).
The report draws upon an extensive range of evidence and case studies from various countries, such as Chile, India, Jordan, Kenya, Spain, and Tunisia. It effectively makes the economic and business case for adopting nature-based solutions (NbS) to combat drought. These solutions focus on restoring ecosystem functions and soil health to improve water flow, storage, and supply, which are vital for human well-being. Such practices include reforestation, controlled grazing, and the restoration and conservation of watersheds.
Authored collaboratively by the United Nations University Institute for Water, Environment and Health (UNU-INWEH), the Economics of Land Degradation Initiative (ELD), and the UNCCD, with financial backing from the German Federal Ministry for Economic Cooperation and Development, the International Drought Resilience Alliance (IDRA), and the European Union, the report is a cornerstone resource for policymakers and stakeholders. Andrea Meza, UNCCD Deputy Executive Secretary, stressed the importance of sustainable land and water management to spur economic growth and bolster resilience against drought, increasingly trapping communities worldwide in destructive cycles. The ongoing discussions at COP aim for a pivotal decision on drought, urging global leaders to acknowledge the significant, yet avoidable, costs of drought and to champion proactive, nature-driven solutions within the limits of our planet.
The report points out that urbanisation, deforestation, and the excessive withdrawal of surface and groundwater, compounded by climate change, alter land cover and reduce freshwater availability. Consequently, drought is influenced by scant rainfall and how we manage our terrestrial and aquatic resources. Hence, managing the risks of water shortages and the cyclical nature of droughts and floods can be effectively addressed through appropriate policies, incentives, and investments in our natural assets.
The economic repercussions of droughts and related disasters are vastly underappreciated. Costs often escalate beyond national borders, affecting sectors like energy and health and impacting the broader economy. The implementation costs outlined by countries in their national drought and associated plans are only a fraction of the annual expenses incurred due to drought.
Investing in nature-based solutions reduces the impact of drought and holds substantial economic potential. For instance, an economy that integrates natural systems rather than undermining them could generate up to $10.1 trillion annually in business value and create as many as 395 million jobs by 2030. By tripling investment in these solutions by 2030, an additional 20 million jobs could be created. German Parliamentary Secretary Niels Annen emphasised that every dollar invested in these solutions can yield returns of up to $27, enhancing farmer incomes, bolstering value chain resilience, and reducing long-term economic costs. This underscores the urgent need to revalue land management and restore sustainable practices.
The benefits of nature-based solutions extend beyond drought mitigation; they enhance the income of land and water users and offer co-benefits for climate adaptation, biodiversity conservation, and sustainable development. These benefits are invaluable, regardless of drought occurrences, rendering such solutions a no-regret option.
The report concludes with several recommendations to harness the full potential of sustainable land and water management on a landscape scale. It highlights the importance of integrating nature-based solutions into national drought management strategies, securing land tenure and water rights, and strengthening local governance to facilitate on-the-ground changes.
In conclusion, the economic impact of drought extends beyond immediate agricultural losses, affecting entire supply chains, reducing GDP, impacting livelihoods, and leading to challenges like hunger, unemployment, migration, and long-term human security. Thus, effective management and investment in natural solutions are crucial to mitigate these effects, presenting an invaluable opportunity for both public and private investors to create sustainable livelihoods and economic prosperity in harmony with nature while combating the adverse impacts of droughts and climate change, particularly in developing regions of the Global South.
More information: UNU-INWEH et al, Economics of drought — investing in nature-based solutions for drought resilience, Economics of Drought Report. DOI: 10.53328/INR24CCD001
Journal information: Economics of Drought Report Provided by United Nations University