Sunday, April 6, 2014

Wine and Climate Change: A review

Orley Ashenfelter (Joseph Douglas Green Professor of Economics, Princeton University and President of the American Association of Wine Economists (AAWE)) and Karl Storchman (Clinical Professor of Economics, New York University and Managing Editor, Journal of Wine Economics), having both written extensively on the economics of grape growing and wine production and distribution, recently collaborated on a study of wine and climate change. That study, succinctly titled Wine and Climate Change (AAWE Working Paper No. 152, March 2014), utilizes comprehensive literature surveys to: (i) identify the projected physical impacts of climate change on viticulture; (ii) illustrate the associated economic impacts; (iii) proffer adaptation strategies; and (iv) identify potential winners and losers. I will use the findings of this study to determine what changes, if any, will be imposed upon the baseline viticulture architecture (shared in my previous post) as a result of the identified impacts and effects of climate change. Given the makeup of the viticulture architecture, the scope of this effort will be limited to the physical effects of climate change, adaptation strategies, and winners/losers. The economic impacts, while intriguing, do not lend themselves to inclusion/comparison against the viticulture model.

Ashenfelter and Storchman assessed the physical impact of climate and weather along four planes: Temperature, Carbon Dioxide, Pests, and Water. Before reporting on the findings in each of these categories, however, I would like to revisit my architectural framework in light of some of the ideas advanced in the paper.

In my post on viticulture architecture, the Adequate Sunlight and Heat component (see below) would appear to encompass the first of the four analysis planes mentioned above.

While my focus in the architectural baseline was on the temperatures required to promote the vegetative and reproductive aspects of the grapevine, the authors additionally stress the importance of the dormancy period which occurs when temperatures fall below 10 degreesC (50 degreesF). According to the authors, winter dormancy: (i) helps to sybnchronize the growth stages of the vines and (ii) increases the productive lifetime of the vine. The authors illustrate the importance of this dormancy period by comparing grapegrowing in the tropics to grapegrowing in traditional quality-wine zones. In the tropics, a lack of dormancy can sometimes allow two or more crops annually, according to the authors, but, in addition to the grapes not being suitable for wine making, is also accompanied by a host of issues that are not common in the traditional regions. The key finding here is that my viticulture architecture will need to be expanded to accomodate a dormancy period.

Physical Impacts

The key climate and temperature impacts reported by the authors are as follows:

  • All varieties exhibit lower fruit-set, ovule fertility, and berry size as temperatures exceed 25 degreesC (77 degreesF)
    • This suggests that warming above cultivar-specific optimums reduces crop yields
  • High temperatures increase grape sugar accumulation and reduces grape acidity
  • Enzymes that initiate the physical softening of berries and contribute to the accumulation of flavors, aromas, and pigments can be inactivated or destroyed by very high temperatures
  • Increased warming may increase the number of good vintages in cold-climate wine growing regions while simultaneously decreasing the number of good vintages in hot-climate growing areas
  • Extreme temperatures, at both ends of the spectrum, will be detrimental to the vine plant or grape.
  • Substitution capability diminishes with increasing heat.
Carbon Dioxide:
  • No demonstrable impact to grape vines or berries as a result of increased levels of carbon dioxide (Editor's Note: other than everything that we are talking about, that is).
  • Warming temperatures are likely to increase disease and pest pressure on grapevines
  • The incidence of fungal diseases (black rot, downy mildew, etc.) will increase with warmer weather
  • IPCC expects increasing water deficiencies in most grape growing areas.

In the foregoing list, carbon dioxide has no clear effect on the grapes while the threats presented by water and pests appear to be things that could be fought with the tools we have in hand today. The issue of most concern then, as it relates to the physical impact of climate change, is increasing temperature.

Selected Economic Effects

While the bulk of the economic analysis is beyond the scope of this paper, I would like to point out a few of the economic effects noted by the authors because they are straightlined from the physical impacts and then feed into the further discussions of price and profits. One of these areas is the availability of suitable vineyard areas in the the face of the physical impacts of climate change. One of the studies cited by the authors (White et al., 2006) posit a reduction of suitable vineyard area in the US from 4.1 million square kilometers to 3.5 million square kilometers by the end of the 21st century. For the highest quality growing regions, White et al., see a reduction of 81% in suitable growing areas in the US. Further, as suitable areas migrate to more humid and higher-precipation areas, higher levels of funding will be required to keep fungal diseases under control. It goes without saying that with less vineyard space, and increased costs of keeping pests and diseases from the remaining space, the implications for costs are immense.

Another proposed temperature effect revolves around yields. The standard for high quality grapes is to manage yield down but, according to one of the studies cited by the authors, a 3 degreeC rise in temperature could result in a 90% increase in yields in the coastal California area wine growing regions.

Finally, the authors discuss quality implications for various wine regions as a result of temperature increases. They foresee quality improvement in the wines of currently cool climes like northern France and Germany while they see a simultaneous decline in quality in the Rioja region of Spain, California, and South Australia.

Potential Adaptation Initiatives

The authors' proposals for adaptations to combat climate change can be classed as tactical and strategic (or, more colloquially, "shelter in place" and "get the hell out of Dodge") and are presented in the table below.

                     Potential Adaptation Initiatives
Harvest date shifts
Movement towards the poles
New cultivars and rootstocks
Movement to higher elevations
Use of canopies to mitigate the sun’s effect

Row re-orientation

Cover crops between rows to reduce reflected heat

Source: Derived from Ashenfelter and Storchman AAWE Working Paper

While harvest-date shifts, increased canopy size, and cover crops have relatively low cost implications, the same cannot be said for the other tactical adaptations. First, at the warmest extremes of today's viticultural environment, cultivar substitution is not a realistic option. Secondly, cultivar substitution and row re-orientation have both direct and opportunity costs associated with replanting and then waiting for the new vines to become contributing members of the vine society.

In the case of the strategic solutions, the authors point out a number of issues and gating factors which will have to be addressed along the way. In the case of the US, the authors see the Rocky Mountains and the border area between Washington and British Columbia as becoming viticultural desirable as traditional wine-growing areas become warmer. Movement to these areas, however, will place the viticulturist into conflict with native flora and fauna. In the case of Europe, the issues that would have to be addressed include:

  • The tying of cultivars to specific appellations
  • Irrigation prohibition in many appellations
  • The need for planting rights in order to plant vines anywhere in Europe
  • The EUs historical reluctance to award new planting rights

The American public and its representatives continue to take a "see no evil, hear no evil" approach to climate change and while viticulturists cannot on their own change the course of history, they would be guilty of negligence if they were not planning for the future that will be. The Ashenfelter and Storchman Working Paper, in the IPCC style, uses a broad range of research to provide an updated picture of the implications of climate change for the wine industry and potential paths forward. While not fine-grained enough to surface potential changes to the needs-driven viticulture architecture, it provides a strong sense as to where the strategic viticulture focus should be: on the site selection and vineyard establishments aspects of viticultural science.

©Wine -- Mise en abyme

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