The Long-Term Economic Effects of Aridification

Abstract

While the existing literature on the economic effects of climate change has mainly focused on temperature and rainfall variations, the impacts of aridification have been often overlooked. Here, we examine the effects of aridification (proxied with a measure of soil potential evapotranspiration) on the GDP per capita. We exploit a 56 km-by-56 km grid-cell global dataset on the annual frequency from 1990 to 2015. We find that first, from 1990, the whole world has experienced an increase of 3.9% in soil aridification, with Africa and South-East Asia being the most affected regions. Second, we find that areas that experienced large soil aridification were associated with a significant reduction in the GDP per capita. We also show that these effects are more significant than those obtained considering precipitation and temperature alone. Third, we use these results to project the costs of future desertification patterns. Our findings show that desertification will continue to generate future losses in GDP growth by 16% and 6.7% in Africa and Asia, respectively.

Keywords: Aridification, Climate change, economic development, Desertification