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February 19, 2008

The cost of a long drought

We all want sufficient rainfall to put an end to the drought. But if this doesn't happen, and the drought persists, is there any way of estimating the possible adverse impact to the North Carolina economy? Listen

Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:

"Well, we have some immediate impacts that I think we can all see and fairly easily measure. That is, losses to farmers, also to the green industry. And those losses have already been calculated in the several hundreds of millions of dollars. But a long-lasting drought will also bite into other industries in other parts of the economy simply by making the cost of obtaining water or the cost related to reducing water use higher.

"Now if we look at other regions in the world that have suffered long droughts, a good ballpark for the total cost of a long, severe drought is about one percent of the total economy. So in North Carolina's case this would amount to about $4 billion annually. Now, this is a good number to know because it represents the benefit of doing something to replenish our supplies of water."

Posted by Dave at February 19, 2008 08:00 AM