BAKU, Azerbaijan, August 3. Iran’s GDP could decrease by 7 percent relative to the baseline, Trend reports citing World Bank’s country report.
Iran is a water-stressed country where consumption outstrips natural regeneration. Climate change will widen the water supply and demand gap, worsening water challenges for Iran and its neighbors.
Irrigated agriculture consumes the greatest share of water (92 percent), but that water is not used well in Iran: agricultural water productivity is one of the lowest in the region. Climate change will negatively affect the gross domestic product (GDP), demand for labor, and food prices.
According to the World Bank Water in the Balance report, in a scenario where water availability reduces by 20 percent and where higher temperatures negatively impact crop yields, GDP would decrease by 7 percent relative to the baseline (real GDP in 2016) or by about US$30 billion.
Demand for labor would fall by up to 4.8 percent and 10 percent relative to the 2016 baseline for agricultural and non-agricultural activities, respectively. Consumer food prices would increase by up to 8.2 percent.
This analysis relies on short to medium time likely changes in crop yields and water availability prior to 2050. Since reduced water availability is one of the biggest economic impacts of climate change, Iran can benefit from lessons from countries that have coped with this issue.
These pathways include
(i) effective water resources management,
(ii) improved water use efficiency with water demand management policies,
(iii) adept institutions and tailored policies, and
(iv) collaboration with riparian countries.