Uncharted Waters : The New Economics of Water Scarcity and Variability

Report
from World Bank
Published on 24 Oct 2017 View Original

Misery in Slow Motion: The Deep and Long Lasting Effects of Drought

New data highlights hidden impact of changing climate and erratic rainfalls.

WASHINGTON, October 24, 2017—Repeated droughts around the world have shockingly large and often hidden consequences, destroying enough farm produce to feed 81 million people every day for a year, damaging forests, and threating to trap generations of children in poverty, according to a new report from the World Bank Group.

Uncharted Waters: The New Economics of Water Scarcity and Variability presents new evidence on how increasingly erratic rainfall impacts farms, firms and families. It also shows that although floods and storm surges pose major threats, droughts are “misery in slow motion,” with impacts deeper and longer lasting than previously believed.

“These impacts demonstrate why it is increasingly important that we treat water like the valuable, exhaustible, and degradable resource that it is,” said Guangzhe Chen, Senior Director of the World Bank’s Water Global Practice. “We need to better understand the impacts of water scarcity, which will become more severe due to growing populations and a changing climate.”

The report found that impacts caused by drought can cascade into unexpected areas.

For families, the effects of drought can span generations. The report finds that in rural Africa, women born during extreme droughts bear the marks throughout their lives, growing up mentally and physically stunted, undernourished and unwell because of crop losses. New data shows that women born during droughts also have less education, fewer earnings, bear more children and are more likely to suffer from domestic violence. Their suffering is often passed on to the next generation, with their children more likely to be stunted and less healthy, perpetuating a vicious cycle of poverty.

On farms, repeated years of below-average rainfall not only destroys crop yield -- it forces farmers to expand into nearby forests. Since forests act as a climate stabilizer and help regulate water supplies, deforestation decreases water supply and exacerbates climate change.

For firms, the report calculates the economic costs of droughts as four times greater than that of floods. A single water outage in an urban firm can reduce its revenue by more than 8%. And if that firm is in the informal sector, as many are in the developing world, sales decline by 35%, ruining livelihoods and stagnating urban economic growth.

Many of the regions most affected by drought overlap with areas that are already facing large food deficits and are classified as fragile, heightening the urgency of finding solutions.

“If we don’t take deepening water deficits and the bigger and more frequent storms that climate change will bring seriously, we will find water scarcity spreading to new regions of the world, potentially exacerbating issues of violence, suffering, and migration,” said the report’s author and World Bank’s Water Global Practice Lead Economist Richard Damania. “Current methods for managing water are not up to the challenge. This sea-change will require a portfolio of policies that acknowledge the economic incentives involved in managing water from its source, to the tap, and back to its source.”

The impacts of erratic rainfall ripple through farms, firms and families, sometimes for generations. The report offers proposals for how to tackle these challenges, calling for new policies, innovation and collaborations.

The report recommends constructing new water storage and management infrastructure, paired with polices that control the demand for water. Utilities responsible for water distribution in cities also need to be properly regulated to incentivize better performance and investment in network expansion, while also ensuring a fair market return. The report also noted that when flood and droughts turn into economic shocks, safety nets must be put in place to ensure poor families can weather the storm.

PRESS RELEASE NO: 2018/058/WATER
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