Climate change droughts: A growing threat to global agriculture output

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  Quantumrun Foresight
• January 5, 2022

Insight summary

Climate change is intensifying drought conditions globally, with severe implications for society, the economy, and the environment. These droughts pose significant challenges, particularly for the agriculture sector, leading to food insecurity, social unrest, and economic stress, especially among small-scale farmers. However, they also drive innovation in water management, create new job markets in water conservation and drought management, and require policy changes towards more sustainable water consumption.

Climate change drought context

Experts believe that climate change is contributing to an increasing number of extreme weather events; that includes floods, unprecedented amounts of rainfall, wildfires, and especially droughts. Since summer 2020, drought conditions have been increasing in intensity and spanning across larger regions worldwide. In the US, the states of Arizona, Utah, Colorado, and New Mexico have borne the brunt of these droughts. 

Experts who contributed to the 2021 Intergovernmental Panel on Climate Change (IPCC) report believe that warming global temperatures are worsening drought conditions in drought-prone regions across the world. For example, scientists have recorded uncharacteristically severe droughts in several regions during the 2010s, including southern Europe, Western Amazon, South Africa, Russia, India, and Australia. The IPCC report also states that almost 30 percent of drought conditions are due to human activity. 

Ultimately, a lack of moisture in the air and soil creates drought conditions. The higher temperatures associated with climate change cause greater evaporation of moisture from the soil, deepening the severity of drought conditions. Other factors also contribute to drought-related water shortages, such as lower snowpack volumes, earlier snowmelt, and unpredictable rainfall. In turn, droughts increase the probability of other systemic threats, such as wildfires and insufficient irrigation.

Disruptive impact 

The agriculture sector, which is heavily reliant on predictable weather patterns, is particularly vulnerable. Extended periods of drought can lead to crop failure and livestock death, leading to increased food prices and food insecurity. This development can have a ripple effect on other sectors of the economy, such as the food processing industry, which relies on a steady supply of agricultural products.

In addition to the economic implications, droughts also have profound social consequences. As water sources dry up, communities may be forced to relocate, leading to the displacement of people and potential social unrest. This trend is particularly true for communities that rely on agriculture for their livelihood. Furthermore, the scarcity of water can lead to conflicts over resources, worsening existing social and political tensions. Governments may need to develop comprehensive strategies to manage these potential crises, including investing in water infrastructure, promoting water conservation, and developing drought-resistant crops.

Companies, too, have a role to play in mitigating the impacts of drought. Businesses that rely on water for their operations, such as manufacturing and energy production, may need to invest in water-efficient technologies and practices. Moreover, companies can contribute to broader societal efforts to combat drought by supporting initiatives that promote water conservation and sustainable agriculture. For example, they could invest in technologies that help farmers optimize water use or support community projects that aim to conserve water. 

Implications of climate change-induced droughts

Wider implications of climate change-induced droughts may include: 

• Significant economic stress for small-scale farmers in the developed and developing world due to reduced agricultural output. 


• Increased public and private sector infrastructure investments, such as large-scale water desalination facilities and irrigation networks to support drought-prone regions.


• A surge in the development and adoption of water-efficient technologies, such as drip irrigation and water recycling systems, leading to a shift in the technological landscape and fostering innovation in water management.


• The emergence of new job markets in the fields of water conservation, drought management, and sustainable agriculture, leading to changes in labor dynamics and the creation of new opportunities for employment.


• An increase in migration from drought-stricken regions to areas with more reliable water sources, leading to significant demographic shifts and potential strain on urban infrastructure and resources.


• The potential for heightened political tensions and conflicts over dwindling water resources, leading to shifts in geopolitical dynamics and requiring diplomatic interventions.


• The degradation of natural habitats due to prolonged droughts leading to loss of biodiversity and changes in ecosystem dynamics, with potential knock-on effects on industries such as tourism and fishing.


• The implementation of stringent water usage policies and regulations by governments, leading to changes in societal behavior and potentially driving a more sustainable approach to water consumption.

Questions to consider

• What options are available to governments to improve the water availability in the drought-prone regions of their countries?


• Do you believe that water desalination technologies can solve the water scarcity concerns of large urban populations in regions like the Middle East?