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Abstract
The authors present a method for analyzing the economic benefits to the United States resulting from changes in drought frequency and severity due to global greenhouse gas (GHG) mitigation. The method begins by constructing reduced-form models of the effect of drought on agriculture and reservoir recreation in the contiguous United States. These relationships are then applied to drought projections based on two climate stabilization scenarios and two twenty-first-century time periods. Drought indices are sector specific and include both the standardized precipitation index and the Palmer drought severity index. It is found that the modeled regional effects of drought on each sector are negative, almost always statistically significant, and often large in magnitude. These results confirm that drought has been an important driver of historical reductions in economic activity in these sectors. Comparing a reference climate scenario to two GHG mitigation scenarios in 2050 and 2100, the authors find that, for the agricultural sector, mitigation reduces both drought incidence and damages through its effects on temperature and precipitation, despite regional differences in the sign and magnitude of effects under certain model scenarios. The current annual damages of drought across all sectors have been estimated at $6–$8 billion (U.S. dollars), but this analysis shows that average annual benefits of GHG mitigation to the U.S. agricultural sector alone reach $980 million by 2050 and upward of $2.2 billion by 2100. Benefits to reservoir recreation depend on reservoir location and data availability. Economic benefits of GHG mitigation are highest in the southwestern United States, where drought frequency is projected to increase most dramatically in the absence of GHG mitigation policies.

In the existing 276 international river basins, the increase in water variability projected by most climate change scenarios may present serious challenges to riparian states. This research maps the institutional resilience to water variability in transboundary basins and combines it with both historic and projected variability regimes, with the objective of identifying areas at potential risk of future hydropolitical tension. To do so, it combs existing international treaties for sources of institutional resilience and considers the coefficient of variation of runoff as a measure of past and future water variability. The study finds significant gaps in both the number of people and area covered by institutional stipulations to deal with variability in South America and Asia. At present, high potential risk for hydropolitical tensions associated with water variability is identified in 24 transboundary basins and seems to be concentrated mainly in northern and sub-Saharan Africa. By 2050, areas at greatest potential risk are more spatially dispersed and can be found in 61 international basins, and some of the potentially large impacts of climate change are projected to occur away from those areas currently under scrutiny. Understanding when and where to target capacity-building in transboundary river basins for greater resilience to change is critical. This study represents a step toward facilitating these efforts and informing further qualitative and quantitative research into the relationship between climate change, hydrological variability regimes, and institutional capacity for accommodating variability.