Droughts may creep in stealthily, but their impacts are often more devastating and far-reaching than sudden storms or floods. In 2021, droughts in California led to agricultural losses exceeding USD 1 billion. Prolonged dry conditions in Central America resulted in severe water shortages in 2024 and halted ships on one of the world’s most critical trade routes – the Panama Canal – leaving rivers and reservoirs across the region too dry to generate hydropower and prompting countries to restart emissions-intensive coal power plants. The human toll of droughts remains most severe in Africa, where extreme drought conditions left 23 million people in severe hunger in 2023.
Climate change has increased the land area exposed to droughts and worsened the impacts on communities and economies. In addition to more variable rainfall, rising temperatures accelerate evaporation, reduce soil moisture and increase stress on depleting freshwater resources. We estimate that the economic impacts of an average drought today can be up to six times higher than in 2000, and costs are projected to rise by at least 35% by 2035.
In light of these growing risks, countries must proactively and urgently adapt to droughts well before they strike. The OECD’s Global Drought Outlook provides a comprehensive, evidence-based assessment of how drought trends and impacts are evolving under climate change and identifies policy responses for effective adaptation. The analysis demonstrates that drought resilience cannot be achieved through water management alone. It requires co-ordinated action across agriculture, land use, energy, transport, industry, construction and health systems. The report also underscores the need for sustained investment in risk prevention, robust data and monitoring systems, alongside inclusive governance that addresses the needs of vulnerable populations and ecosystems.
As climate pressures intensify, strengthening drought resilience must become a global priority. The OECD remains committed to supporting countries in advancing effective, forward-looking solutions that enable societies to anticipate, prepare for and adapt to increasing drought risks in a changing climate.
Jo Tyndall
Director
OECD Environment Directorate