The cost of drought in Italy

September 28, 2020

Droughts are, after floods and storms, the costliest natural hazard. The expected increa,se in the frequency and intensity of drought events due to climate change reinforces the necessity to improve the quality and reliability of information about the economic impacts of droughts and the need for more accurate cost analyses to embed these estimates into the assessment of the costs of climate change.

A new study realized with the contribution of the CMCC Foundation, recently published on proposes a novel method to assess the overall economic effects of agricultural droughts using a coupled agronomic-economic approach that accounts for the direct and indirect impacts of this hazard in the economy.

"Our results reveal", commented researcher

David García-León, who was Marie Sk?odowska-Curie Postdoctoral Fellow at CMCC@Ca'Foscari Division and he's now at the European Commission, Joint Research Centre, focused his research on assessing the overall macro-economic effects (% GDP) of agricultural drought impacts in Italy using a coupled CGE-econometric approach. The other authors of the study are the CMCC researchers

In this study, the authors focused on agricultural droughts, which represent the impact on crop yields. "We used a satellite-based indicator of agricultural drought, the vegetation indicator fAPAR - fraction of Absorbed Photosynthetically Active Radiation -", Dr. García-León explains, "to detect and monitor the impacts on vegetation growth and productivity of environmental stress factors, especially plant water stress due to drought".

"This data", CMCC researcher Andrea Staccione adds, "have been then correlated with the geo-referenced data of land use and agricultural production at the farm-level provided by the Italian Council for Agricultural Research and Economics (Consiglio per la Ricerca in agricoltura e l'analisi dell'Economia Agraria - CREA) in order to assess the direct impacts of agricultural droughts on crop productivity."

The study distinguished between three types of drought severity levels (mild, moderate and extreme), and three representative years of each state were selected to describe each scenario: solar years 2003, 2006 and 2011 were studied as extreme, moderate and mild dry years, respectively. After the estimation of the direct impacts of droughts on crop yields using statistical models calibrated for each crop, the authors estimated the indirect impacts at the sectoral, regional and country-wide level. "Local-level, crop-dependent productivity shocks were fed into a regionalised Computable General Equilibrium model specifically calibrated for the Italian economy", CMCC researcher Gabriele Standardi explains. "Our estimates indicate that the total damages caused by agricultural droughts in the Italian economy can range from 0.01?0.10% of Italian GDP, that is, from approximately EUR 0.55 to EUR 1.75 billion. These damages concentrate but extend beyond the agricultural sector, with substantial identified impacts on food industry manufacturing and wholesale and trade services". This estimated overall effect on GDP is coherent with other outcomes obtained in different studies and, in particular, the agricultural production loss identified under severe drought conditions (EUR 2 billion) is consistent with the figure reported by the Italian Association of farmers in 2017, considered an extreme dry year. The spatial distribution of the identified losses showed large regional heterogeneity, according to the geographical configuration of droughts in a specific year, and on the specific crops cultivated in the different areas analysed. Moreover, the simulations suggested the presence of a recomposition of land use and production, that is a land-use substitution effect from less to more drought-resistant crops following a drought (e.g. olive).

"In the end, Andrea Staccione concludes, "it's important to highlight that our approach is fully systematic and scalable and thus could be applied to more specific areas or could be expanded to implement large pan-European drought cost assessments. Our study therefore might improve policy approaches to managing drought risks, while pointing out the best pre-impact (mitigation) and post-impact (response) interventions to be included in drought plans".

The proposed methodology shows its full potential as a support to decision-making processes on land use and drought management. For example, regional risk maps could help to identify areas with the highest exposure and vulnerability. The analyses of the drought risk on specific regions could also contribute to defining insurance tools that reflect the costs produced by drought events and, consequently, appropriate compensation tools.
-end-
Read the full paper: David García-León, Gabriele Standardi, Andrea Staccione,
Land Use Policy, Volume 100, 2021, 104923, ISSN 0264-8377, https://doi.org/10.1016/j.landusepol.2020.104923.

CMCC Foundation - Euro-Mediterranean Center on Climate Change

Related Climate Change Articles from Brightsurf:

Are climate scientists being too cautious when linking extreme weather to climate change?
Climate science has focused on avoiding false alarms when linking extreme events to climate change.

Mysterious climate change
New research findings underline the crucial role that sea ice throughout the Southern Ocean played for atmospheric CO2 in times of rapid climate change in the past.

Mapping the path of climate change
Predicting a major transition, such as climate change, is extremely difficult, but the probabilistic framework developed by the authors is the first step in identifying the path between a shift in two environmental states.

Small change for climate change: Time to increase research funding to save the world
A new study shows that there is a huge disproportion in the level of funding for social science research into the greatest challenge in combating global warming -- how to get individuals and societies to overcome ingrained human habits to make the changes necessary to mitigate climate change.

Sub-national 'climate clubs' could offer key to combating climate change
'Climate clubs' offering membership for sub-national states, in addition to just countries, could speed up progress towards a globally harmonized climate change policy, which in turn offers a way to achieve stronger climate policies in all countries.

Review of Chinese atmospheric science research over the past 70 years: Climate and climate change
Over the past 70 years since the foundation of the People's Republic of China, Chinese scientists have made great contributions to various fields in the research of atmospheric sciences, which attracted worldwide attention.

A CERN for climate change
In a Perspective article appearing in this week's Proceedings of the National Academy of Sciences, Tim Palmer (Oxford University), and Bjorn Stevens (Max Planck Society), critically reflect on the present state of Earth system modelling.

Fairy-wrens change breeding habits to cope with climate change
Warmer temperatures linked to climate change are having a big impact on the breeding habits of one of Australia's most recognisable bird species, according to researchers at The Australian National University (ANU).

Believing in climate change doesn't mean you are preparing for climate change, study finds
Notre Dame researchers found that although coastal homeowners may perceive a worsening of climate change-related hazards, these attitudes are largely unrelated to a homeowner's expectations of actual home damage.

Older forests resist change -- climate change, that is
Older forests in eastern North America are less vulnerable to climate change than younger forests, particularly for carbon storage, timber production, and biodiversity, new research finds.

Read More: Climate Change News and Climate Change Current Events
Brightsurf.com is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.