Spain faces significant economic impact from climate change, particularly from drought conditions, causing concern among institutions and global companies about how these circumstances will affect the future of productive sectors.
A recent report by the European credit rating agency Scope Ratings GmbH warned that the ongoing drought and its impact could cost Spain approximately 4.6 billion euros by 2050, equivalent to 5.8% of the country’s per capita GDP.
According to the report, “Investors need to emphasize testing economies for drought exposure and identifying risks in their investment portfolios.”
Spain is experiencing its worst drought since 1961, with a marked scarcity of rainfall. The State Meteorological Agency (Aemet) assessed the situation, noting that the 2022-2023 period was particularly dry in Spain with only 560.7 liters per square meter of rainfall, 12% below the average, as reported by the Spanish newspaper La Vanguardia.
Julio Berbel, a professor at the University of Córdoba and a member of the Andalusian government’s drought expert committee, referred to “many alarming charts” in the historical series prepared annually by Aemet with rainfall data. Climatologist Samuel Biener noted, “With complex terrains like in Spain, average rainfall rates are not very helpful.”
The Spanish Meteorological Agency pointed out that in some areas of Andalusia and Catalonia, unusual rains would need to continue for several consecutive months to compensate for the deficit of recent years.
The drought and extreme heatwaves in Spain have halved olive oil production, with the country producing 1.5 million tons in 2023. The lack of rain and repeated heatwaves stress the olive trees, causing premature fruit drop.
Additionally, olive oil prices have surged by 112% this year compared to last, according to a report published last month by the Spanish Ministry of Agriculture and Food.
The Spanish Ministry of Ecological Transition and Demographic Challenge and the Ministry of Agriculture, Fisheries, and Food released a report on drought management in 2023, warning that 14.6% of the national territory is in a state of emergency due to water shortage, and 27.4% is on alert, as stated by the newspaper El Mundo.
Farmers, facing these challenges and additional costs, believe that “technological transformation in irrigation is necessary to cope with the lack of rain” as “current investments are insufficient to alleviate water scarcity.” This has increased “the need to utilize water more efficiently in the face of climate change.”
Moreover, climate change impacts exacerbate the consequences of high water consumption, particularly for irrigating industrial crops, making the water stress experienced in many areas of the Iberian Peninsula chronic. Consequently, several municipal governments have demanded a preventive strategy against drought.
