A Probabilistic Risk Assessment of the National Economic Impacts of Regulatory Drought Management on Irrigated Agriculture.

Drought frequency and intensity is expected to increase in many regions worldwide, and water shortages could become more extreme, even in humid temperate climates. To protect the environment and secure water supplies, water abstractions for irrigation can be mandatorily reduced by environmental regulators. Such abstraction restrictions can result in economic impacts on irrigated agriculture. This study provides a novel approach for the probabilistic risk assessment of potential future economic losses in irrigated agriculture arising from the interaction of climate change and regulatory drought management, with an application to England and Wales. Hydrometeorological variability is considered within a synthetic data set of daily rainfall and river flows for a baseline period (1977–2004) and for projections for near future (2022–2049) and far future (2072–2099). The probability, magnitude, and timing of abstraction restrictions are derived by applying rainfall and river flow triggers in 129 catchments. The risk of economic losses at the catchment level is then obtained from the occurrences of abstraction restrictions combined with spatially distributed crop‐specific economic losses. Results show that restrictions will become more severe, more frequent, and longer in the future. The highest economic risks are projected where drought‐sensitive crops with a high financial value are concentrated in catchments with increasingly uncertain water supply. This research highlights the significant economic losses associated with mandatory drought restrictions experienced by the agricultural sector and supports the need for environmental regulators and irrigators to collaboratively manage scarce water resources to balance environmental and economic considerations. Plain Language Summary: Droughts are expected to become more common in many regions worldwide due to climate change. During droughts events, environmental regulators can impose water abstraction restrictions for irrigation to protect drinking water supplies and meet the minimum water requirements for the natural environment. This study provides a novel approach to evaluate the risk of economic losses in irrigated agriculture due to water abstraction restrictions implemented during current and future drought conditions under climate change, using England and Wales as a case study. A data set of modeled daily rainfall and river flow for a baseline period (1977–2004) and for near future (2022–2049) and far future (2072–2099) is used. Decisions regarding when to implement restrictions in 129 catchments are made considering a set of rainfall and river flow thresholds, with the associated economic losses calculated by crop type. Results show that in the future water abstraction restrictions for irrigation will become more severe, more frequent, and longer. The highest economic losses will affect the most drought‐sensitive crops, which are located in water stressed catchments and have a high financial value in the food market. This research highlights the importance of a collaborative work between environmental regulators and irrigators to manage scarce water resources and balance environmental and economic considerations under drought. Key Points: A novel probabilistic approach of the risk of economic losses in irrigated agriculture due to climate change and drought management is shownFuture water restrictions on irrigation in England and Wales are projected to increase in duration, severity, and frequencyHydroclimatic variability, drought management, and the distribution and sensitivity of crops to water stress shape the economic impacts [ABSTRACT FROM AUTHOR]