ABSTRACT
This chapter summarizes the key literature on the costs and benefits, and pros and cons, of reactive public crisis management versus ex ante government policies for drought risk management directed toward investment in mitigation actions and drought preparedness that reduce the impacts of future droughts. Drought events lead to numerous economic, social, and environmental costs of a magnitude modulated by social and household vulnerability and resilience to drought. Agriculture continues to be the major water user globally, the impacts and costs of droughts can be extensive in urban areas. The urban costs of droughts will continue to grow in the future because of climate change and expanding urbanization, and are magnified by relatively higher levels of returns from urban compared with agricultural water use. Droughts in Brazil, especially in the northeast, are expected to increase in frequency and intensity as a result of global climate change.
