The Economic Impacts of Droughts: A Framework for Analysis

Freire‐González, Jaume; Decker, Christopher; Hall, Jim W.

doi:10.1016/j.ecolecon.2016.11.005

Cited by 114 publications

(75 citation statements)

References 41 publications

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“…It is obvious that the explanation for the occurrence of drought will affect how the event must be modeled. However, we follow a recommendation by Freire‐Gonzales, Decker, and Hall () and model the drought as a natural hazard. One obvious way of doing this is to assume that the recharge vanishes during the event.…”

Section: Benchmark Policies Notation and Basic Assumptionsmentioning

confidence: 99%

Groundwater management: Waiting for a drought*

Amundsen

Jensen

2019

Natural Resource Modeling

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In this article we present a stylized model for optimal management of an unconfined groundwater resource when the threat of drought exists. The drought is modeled as a stochastic event that hits at an uncertain date and two benchmark management policies are investigated: (a) A policy of optimal dynamic management ignoring the threat of drought; and (b) an economically optimal policy that accounts for the threat of a drought. We show that the optimal predrought steady‐state equilibrium stock size of groundwater under policy b is larger than that under policy (a) Furthermore, we show that an increase in the probability of a drought gives rise to two counteracting effects: One in the direction of a larger predrought steady‐state equilibrium stock size (a recovery effect) and one in the direction of a lower predrought steady‐state equilibrium stock (an extinction effect). We find that the recovery effect dominates the extinction effect. Recommendations for Resource Managers: We analyze two groundwater extraction policies that can be used when a threat of drought exists: (a) Dynamic optimal management ignoring the threat of drought; and (b) dynamic optimal management taking the threat of drought into account. We show that the predrought steady‐state equilibrium stock size of water should be larger under the policy (b) than under policy (a). This conclusion has three implications for resource managers: Current groundwater management should take future extraction possibilities into account. A resource manager ought to take the threat of drought into account in groundwater management. A buffer stock of water should be built‐up before the drought to be drawn upon during the event.

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Section: Benchmark Policies Notation and Basic Assumptionsmentioning

confidence: 99%

Groundwater management: Waiting for a drought*

Amundsen

Jensen

2019

Natural Resource Modeling

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“…familial relationships between the sub-systems [8]. Conceptually speaking, this means that households are at risk of drought since their ability to meet their demand for blue and green water [33,34] is impaired by spatio-temporal water scarcity. The term 'risk' is often used in an unspecified manner, but in this study it encompasses two dimensions, the environmental hazard itself to which societal entities (i.e., households) are exposed and their vulnerability, which specifically includes the sensitivity of these entities to drought and their inherent ability to cope with adverse conditions in the short-term [35].…”

Section: Study Design and Indicator Selectionmentioning

confidence: 99%

Blended Drought Index: Integrated Drought Hazard Assessment in the Cuvelai-Basin

Luetkemeier

Stein

Drees

et al. 2017

Climate

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Drought is one of the major threats to societies in Sub-Saharan Africa, as the majority of the population highly depends on rain-fed subsistence agriculture and traditional water supply systems. Hot-spot areas of potential drought impact need to be identified to reduce risk and adapt a growing population to a changing environment. This paper presents the Blended Drought Index (BDI), an integrated tool for estimating the impact of drought as a climate-induced hazard in the semi-arid Cuvelai-Basin of Angola and Namibia. It incorporates meteorological and agricultural drought characteristics that impair the population's ability to ensure food and water security. The BDI uses a copula function to combine common standardized drought indicators that describe precipitation, evapotranspiration, soil moisture and vegetation conditions. Satellite remote sensing products were processed to analyze drought frequency, severity and duration. As the primary result, an integrated drought hazard map was built to spatially depict drought hot-spots. Temporally, the BDI correlates well with millet/sorghum yield (r = 0.51) and local water consumption (r = −0.45) and outperforms conventional indicators. In the light of a drought's multifaceted impact on society, the BDI is a simple and transferable tool to identify areas highly threatened by drought in an integrated manner.

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“…Resource-dependent economic growth may only create short-term prosperity rather than sustained development, as described by the effects of the Dutch disease [8][9][10][11]. On the other hand, numerous studies show the impact of a deteriorated ecological environment, such as pollution on economic recession and drought on productivity or conflicts [12,13]. The second type of research focuses on the impact of development on the ecological environment in terms of, for example, the environmental Kuznets curve and "pollution heaven" theory.…”

Section: Introductionmentioning

confidence: 99%

Nexus between Ecological Conservation and Socio-Economic Development and its Dynamics: Insights from a Case in China

Guo

Zhou

2020

Water

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Achieving sustainable socio-economic development in areas designated for ecological conservation is a challenge for many developing countries. The nexus between ecological conservation and socio-economic development is particularly complex in these areas for the reason that most of them are located in poor regions and their resource utilization is constrained by ecological conservation practices. A conceptual framework was proposed for examining the nexus between ecological conservation and economic development in a social-ecological system to explain the pathways and mechanisms of influence between the ecosystem and the social system. We chose the Lashihai watershed in Yunnan Province, China, as the case study area to explore whether a positive feedback loop between ecological conservation and socio-economic development has been formed, as well as how to promote the positive evolution of socio-economic and ecological status. The ecosystem and socio-economic system in the Lashihai watershed closely interact and form a dynamic system with a positive evolutionary trend. If negative factors, such as an uneven distribution of income and new population pressures, are not appropriately managed, they are likely to break the positive feedback loop and trap the system in a negative feedback loop. We discuss the main factors that contribute to the interactions between ecological conservation and livelihoods, and develop policy recommendations for governments in other countries and regions to promote conservation and better livelihoods in conjunction.

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The Economic Impacts of Droughts: A Framework for Analysis

Cited by 114 publications

References 41 publications

Groundwater management: Waiting for a drought*

Groundwater management: Waiting for a drought*

Blended Drought Index: Integrated Drought Hazard Assessment in the Cuvelai-Basin

Nexus between Ecological Conservation and Socio-Economic Development and its Dynamics: Insights from a Case in China

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