An otherwise water-abundant area, the Paris metropolitan region is exposed more and more to episodes of drought. Increasing climate-change induced temperatures and rainfall variability add to growing socio-economic pressures exerted on the region’s water resources. In this context, this report assesses the economic cost of future drought risk induced by climate change. It presents the findings from an assessment of the potential environmental and social impacts of future droughts, including an analysis on the readiness of the region to adapt to these rapidly rising changes. It provides concrete recommendations on how policies and practices need to adapt to maintain the level of drought resilience developed to date in the region.
Adapting the Paris Metropolitan Area to a Water-Scarce Future
Abstract
Executive Summary
The Paris metropolitan area (“the region”) is increasingly at risk of a major drought episode. In 2018, an exceptionally dry spring, coupled with a summer heatwave necessitated significant temporary restrictions on water use in the region. The drought in 2022 resulted in record deficits of water supply and distressed river conditions. Climate change has been a key driver behind observed trends. Since 1990, average temperatures have risen by 2°C and average soil moisture has decreased by 5%. Projections indicate that the region is set to experience further summer precipitation decreases and increased evapotranspiration due to continuously rising temperatures, heightening the likelihood of severe droughts.
In addition to climate change, socio-economic development will drive drought risk in the future. Hosting around 20% of France’s population and producing a third of France’s economic output, the regional water demand is significant. Agriculture, covering 50% of the region’s surface, has seen water withdrawal more than double since 2012, with a projected 45% increase by 2050. Regional manufacturing, river navigation, and energy production are also heavily dependent on water. Urban expansion has exacerbated drought risk by increasing soil sealing, hindering aquifer recharge and groundwater storage. Efforts to mitigate urban heat islands, such as expanding green spaces could also increase water demand.
To date, the region has been resilient to droughts. The region has benefited from a robust riverine infrastructure network. Four reservoir lakes have played a crucial role in maintaining regional water levels, thereby securing water supply for potable, industrial, agricultural and energy production uses in water scarce periods. The region’s potable water network has lower leakage rates than any other French or major European city. Diverse groundwater resources and interconnected water supply networks have secured access to drinking water resources.
However, a major drought episode could severely disrupt economic activities in the region, with economic costs estimated up to EUR 2.5 billion. Drawing on historical droughts like those in 1921 and 1976, this report models three future drought scenarios under changing climate conditions. These scenarios suggest economic impacts from potential drought events to range from EUR 1.4 billion by 2050 to EUR 2.45 billion in 2100. Direct costs would constitute 70% of the total economic impacts in case of drought. The manufacturing and agriculture sectors would be the first economically impacted. Reduced agricultural production would ripple through the food production sector and other economic areas indirectly impacted by decreased manufacturing output. As the largest importer and exporter among French regions, production losses in the area could also affect other French (up to EUR 330 million) and European regions (up to EUR 170 million). Additionally, structural damage from drought-induced clay shrinkage is estimated at around EUR 300 million. Beyond economic impacts, the region imports drinking water, risking conflict with local farming communities outside the region, while droughts threaten ecosystem roles and well-being.
While reducing water abstraction is a primary policy goal, historical trends show limited room for manoeuvre. In the region, total water abstraction has dropped by 14% since 2012 and are set to be further reduced by 10% for all water uses and 14% for potable water by 2030. Given that the level of household water consumption and the share for agricultural water use in the region lie below the national average already, these objectives will be challenging to achieve.
Existing drought management strategies and planning instruments could benefit from a robust risk assessment, a longer-term horizon and coordinated approach. Current national and subnational strategies identify drought as a critical risk, but limit their horizon to 2030, failing to capture the longer-term pressures materialising from climate change. They lack a robust drought risk assessment, including projected changes in water supply and demand. Finally, while drought risk targets are aligned in strategies across all levels, they still need to be incorporated into sectoral policies.
To effectively target drought adaptation measures, comprehensive data on current water uses is essential. The lack of comprehensive metering makes it difficult to understand the consumption patterns of different consumer groups (such as households, businesses, and municipalities), and thus hinders the effective targeting of adaptation measures. This challenge extends to irrigation and industrial uses, where water withdrawal is only reported when it exceeds a certain threshold.
Water could be allocated more strategically ex ante to adapt to future drought risk. To date, water allocation regimes do not consider drought. Users can abstract water without limits if they prove it will not harm the resource or broader ecosystems. Stricter allocation regimes are only enforced during acute droughts. However, collaborative initiatives, such as Aqui’brie, a regional aquifer-level cooperative, demonstrate that water users can collectively decide water allocation rules to reduce water abstraction in the long term.
Unconventional water supply measures hold a significant potential to contribute to future water use efficiency. Industrial water reuse or collecting drainage and rainwater for household or municipal irrigation and street cleaning purposes are gaining traction. Increasing awareness of such measures and overcoming regulatory constraints will help increase their adoption.
A long-term financing strategy, reflecting a whole-of-society approach is needed to boost drought resilience investments. To inform this strategy, it is crucial to evaluate the financing needs for drought adaptation measures across all sectors and understand current funding barriers. Ensuring sustainability of insurance schemes like the Natural Catastrophe (Cat-Nat) one is important. It is also crucial to integrate drought financing in all relevant budgets, including national disaster management funds. Furthermore, supporting forward-looking measures such as drought-resistant crops in agriculture may require financial incentives and technological support to enhance profitability.
To secure additional funding for drought adaptation investments, consider increasing water tariffs and improving the efficiency of existing funding arrangements. Given existing inelastic demand for water in the region, a mere price increase is unlikely to curb household consumption to desired levels. However, higher tariffs can help bridge the funding gap arising from lower revenues induced by lower water consumption and increased needs to adapt to future drought conditions. Additionally, existing sectoral expenditures, such as European agriculture funds, could be adapted to account for drought risk reduction more effectively.
