Our Approach to Drought and Wildfire Is Economically Backwards
· Time
This year, governments and businesses across Europe,North America and parts of Africa, Asia, Latin America, and the Caribbean have been contending with the impacts of severe drought and wildfires. Every year, drought-induced losses alone cost the global economy an estimated $307 billion. Yet one of the assets that could make economies more resilient remains dangerously underfunded: healthy land.
This week, leaders gathering in Ulaanbaatar, Mongolia for COP17 of the UN Convention to Combat Desertification (UNCCD) will have an opportunity to change that. What happens on Mongolia’s vast rangelands—and in degraded landscapes around the world—matters far beyond the environment. It is increasingly central to food and water security, supply chains and economic stability. In other words, the soil beneath our feet is essential to protecting livelihoods and economies from growing shocks.
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The economic opportunity is significant. The UNCCD estimates that financing land conservation and restoration could generate up to $1.8 trillion annually, driven by strengthened agricultural and supply chain resilience, new revenue opportunities, and mitigated physical risks like drought-related losses. It could also generate employment for an additional 65 million people by 2030, resulting in a net gain of 37 million jobs. Business investment is already responding to this opportunity: the COP Action Agenda on Regenerative Landscapes reported more than a fourfold increase in business investment between 2023 and 2025. But fragmented and misaligned policies continue to hold investment back.
The COVID pandemic exposed how vulnerable global supply chains can be. Recent wildfires and droughts have exposed another weakness: the deteriorating natural systems on which those supply chains depend. Healthy land is not simply an environmental asset. It is economic infrastructure.
For farmers already contending with increased costs of necessities like seeds and fertilizer, land degradation, and increasingly severe drought add another layer of risk. For businesses, these physical risks directly affect the availability, cost, and quality of natural resources on which they depend within and beyond their value chains. And for governments, the consequences arrive as costly crises to manage. The imperative is clear: we need to invest in restoring land and supporting the people who manage it, before the economic and social costs of inaction become even greater.
The UNCCD estimates the combined cost of land degradation, drought, and desertification to the global economy at $878 billion annually. Governments routinely spend billions responding to and rebuilding after floods, wildfires, droughts, and other disasters—with US Government spending on wildfire suppression only set to grow—yet they invest only a fraction in preventing the degradation that makes economies and communities more vulnerable to these shocks. From an economic perspective, this is a poor allocation of capital.
When we think about economic infrastructure, ports and power grids loom large. However, what stewards of the land—including farmers, herders, and pastoralists—have understood for generations is that healthy land is infrastructure too. It underpins livelihoods, food production, water security, the production of raw materials, and, by extension, the economy.
In fact, roughly $44 trillion of global GDP, around half of global output, is moderately to highly dependent on natural capital, including healthy land. Restoring degraded land should therefore be viewed as an investment in economic resilience. An added benefit is that responsible management and restoration of degraded agricultural land can help reduce emissions, including agricultural methane through improved livestock health and feed quality.
By 2050, three in four people worldwide are projected to be affected by drought, with significant knock-on effects for businesses and supply chains through disrupted production, higher input costs, and increased commodity-price volatility. For developing countries, the challenge is particularly acute. The countries most exposed to drought and land degradation are often those with less financial capacity to invest in resilience. A drought that reduces agricultural output can quickly become a wider economic shock by raising food-import bills, reducing rural incomes, and increasing pressure on public budgets and foreign-exchange reserves.
This is the context in which COP17 opens in Ulaanbaatar, and rangelands are top of the agenda. They make up more than half of the earth’s land surface, and 70% of host country Mongolia’s territory. They provide 16% of global food supply, 70% of livestock feed, and support the livelihoods of up to 500 million pastoralists—land stewards who sustain the adaptive knowledge and land management practices on which food systems depend.
Rangelands are part of a much bigger economic story. Land restoration is a long-term investment, and many of its benefits are public goods that cannot easily be captured as private returns. In developing countries, high borrowing costs and constrained public finances make even economically attractive projects difficult to fund. Public and concessional finance therefore has a critical role to play in reducing risk and crowding in private capital where commercial opportunities exist.
A global consultation led by the WBCSD and mandated by the UNCCD Secretariat has called for governments to create a coherent and stable policy environment, develop a long-term investment vision, and strengthen trusted accountability frameworks. These would give businesses greater confidence to invest in shared socioeconomic objectives.
There are already mechanisms through which this can happen. In 2024, COP16 in Riyadh launched the Riyadh Action Agenda (RAA), bringing public, business, and community actors together around land and drought resilience. Together, it has mobilized more than $2.9 billion for land conservation, restoration, drought and water resilience. For 2026 to 2030, participating initiatives have set mobilization goals of more than $130 billion.
The next step is to make this investment progress more coordinated and measurable. At COP17, the RAA will launch the Land & Soil Breakthroughs: time-bound, measurable milestones designed to aggregate non-state actor commitments, reduce overlap, and make collective progress visible and investable. The RAA will also launch a Community Platform to visualise progress towards conserving and restoring 1.5 billion hectares of degraded land by 2030.
The investment return could be significant. Globally, every $1 invested in landscape restoration can create between $7 and $30 in economic benefits for local people.
For too long, healthy land has been treated as an environmental concern rather than the economic asset it is. At a time when governments are under pressure to strengthen economic resilience while managing constrained public finances, and businesses are facing increasing climate shocks, these are the investments we need.
COP17 is an opportunity to change the narrative on land. The question is no longer whether we can afford to invest in its restoration, but whether we can afford not to.