Europe’s Drought, a signpost for the future?

Michael John Smurthwaite
H2O Securities
Published in
17 min readSep 5, 2022
Rhine river after the recent drought in Cologne, Germany

What comes to mind when one thinks of Europe, its weather and water? Take a moment to think and jot these down. Perhaps some of the immediate thoughts that form are of its iconic landmarks, vibrant cultures, and deep history filled with architectural marvels, all set in a cold, mostly wet climate that has plenty of rain, snow, and water. Perhaps one or more of the large iconic navigable waterways such as the Rhine or Seine sprung to mind or just one of your favourite travel destinations along the Mediterranean.

One can be forgiven for having instantly thought of postcard pictures that include rain, cold, or snow as our collective visual history is filled with such images. Along with these images, pictures of idyllic summers, although brief with mild temperatures dominate our collective knowledge bank and understanding of Europe. Europe is definitely not a place one immediately thinks of for having a lack of water. However, this traditional picture of Europe is changing and appears to be changing fast if the extreme weather conditions of the past 4 years are anything to go by.

Worst Drought in 500 years

The current reality finds Europe in the grip of an extremely serious drought that started in all earnest in 2018. It is by some estimations the worst drought experienced in over 500 years. Despite a wet 2021, the current drought in 2022 looks set to eclipse the most recent droughts experienced in the EU in 2018 and 2019. With the frequency of droughts increasing, temperatures rising, drier winters, and lower rainfall, the future of the European climate look set to change in the coming decades. Droughts and a scarcity of water may well become the new “normal”.

Record-breaking temperatures and heatwaves linked to climate change have caused rivers, dams, lakes, and reservoirs to rapidly dry up and levels to plummet to historic lows. Record temperatures have been recorded in various countries and approximately 60% of the EU countries, including the United Kingdom have been affected by drought this year.

60% of the EU countries have been affected by drought

Data released from the recent report issued by the European Drought Commission shows that 47% of Europe is under warning conditions under which there is a clear deficit of soil moisture. A further 17% of countries are in a state of alert that poses a high risk of vegetation loss due to a lack of water. We are seeing unprecedented changes to weather patterns and ecosystems and this is having a direct effect on human populations and our way of life.

Image from the European Drought Observatory

Agriculture, supply chains, electricity production, and tourism have all been affected by the current drought and lack of water. Below in this article, we have highlighted several European countries experiencing drought and the impact of this. From a reduction in electricity generation to decreased harvests, we take a look at the direct cost and effect of the drought on the region and ponder not only its impact on Europe but also the possible effect on the broader interconnected world.

This broader interconnected world is also experiencing the effects of climate change brought about by an increase in global temperatures and greenhouse gases. In many regions around the world, similar scenes to those in Europe are playing out.

One of the most widely publicized in recent weeks was China, which recently experienced record-breaking high temperatures and extremely low rainfall which resulted in the Yangtze River reaching its lowest levels since 1865. The lack of rainfall in the river basin coupled with increased temperatures caused faster levels of evaporation and resulted in river levels dropping rapidly. Low levels of water, impacted the economy and millions of people with factories having to temporarily close in some provinces as hydroelectric power plants scaled back their output. Agriculture too was impacted with less water available, and lower yields are expected. The knock-on effect of this is yet to be felt.

In Somalia, a devasting drought has reached unprecedented levels which have resulted in 1 million people being displaced since January this year. According to the United Nations Refugee Agency, hunger levels are expected to rise significantly from 5 million to 7 million in the next few months. The climate crisis and rising cost of food are further exacerbating this situation. The war in Ukraine further complicates the problem as Somalia previously imported 90% of its requirements from Ukraine and Russia in 2020 when they faced a similar situation. Meanwhile, the internal 3-decade-long civil war continues and further complicates an already dire situation.

These are just two countries outside of Europe that are also grappling with crippling drought and the impact of climate change. We can further include South and Central America, parts of the USA, Central Asia, and Central Africa in the growing list of countries and regions affected by drought caused by climate change.

Spain

Olive tree in Andalusia, Spain

Spain has like several other countries in Europe been gripped by extreme heatwaves this summer with drought conditions taking hold of most parts of the country. The extremely hot summer follows an unusually dry winter and the impact of this saw the country’s water reserves fall to an all-time low of 40%. This is 20% lower than the average recorded levels over the past decade. The reserves have been steadily declining at a rate of 1.5% a week due to a combination of increased evaporation and consumption.

Water reserves at an all-time low of 40%

The country has received less than half its expected rainfall for the time of year in what has been one of the driest periods in the past 60 years. Spain’s agricultural sector produces large amounts of fruit and vegetables, much of which serves the needs of Europe.

The acclaimed olive oil industry has been devastated by the recent droughts and the yield is expected to be down by a third. This will have a huge impact on the availability of olive oil not only in Spain but also in other European countries including the UK. Prices have already increased and added to the already deepening global food crisis.

In the southern region of Andalusia which grows most of this produce, reservoir levels dropped to 25% of their capacity. This prompted authorities to limit water use in an attempt to preserve what remains.

Agriculture consumes 85% of Spain’s water supply

Spain's agricultural sector is estimated to consume up to 85% of the country’s available water resources and the remaining 15% is not enough to meet the remaining water demands. This brings into question whether Spain can continue to be one of the bread baskets of Europe moving forward. Spain’s changing climate and the impact on food production will be a major concern for Europe and the future of food security in the region long.

Spain’s agricultural sector may need to reconsider water-intensive crops and whether they are sustainable long term. There is a need for rapid adaptation to changing climate conditions and to improve water management and infrastructure in the country. The impact of climate change is most profoundly felt in this region and the once rich land is rapidly becoming impoverished by drought.

One of the few positives from the drought is that archaeologists and the public have been able to delight in the emergence of a prehistoric stone circle, known as the “Spanish Stonehenge”. The stone circle officially known as the Dolmen of Guadalperal is usually covered by the waters of the Valdecanas reservoir. With the reservoir levels dropping to 28%, the site is now fully exposed and accessible for the first time since 2019 when it last surfaced. Before that, it was submerged for 50 years following flooding of the area upon completion of the reservoir in 1964.

One thing is certain, climate change studies predict that droughts are going to be more intense, more frequent, and last a lot longer. Much of Spain is at risk of desertification and rapid action is required to steam the impact of climate change.

Germany

The low levels of the Rhine river shown in Bingen, Germany (on August 13, 2022)

The Rhine river is a critical waterway that is used to transport coal, oil, petrol, and other raw materials from Germany’s industrial heartland to the major ports of Rotterdam and Antwerp. In recent weeks, the water levels in the Rhine have fallen to as low as 40cm at the key waypoint of Kaub near Frankfurt. The reduction in the level of water means that many barges, cannot pass these low points and for some, it is simply no longer economically viable to transit using the river. For the vessels that are still operating, many have had to reduce their load capacity by up to 25% in order to ensure that they can pass through these low areas without running aground. A reduction in loads and reduced shipping capacity means that there is an increased freight cost for the delivery of goods and materials.

The river’s level is lower than at the same point in the drought of 2018 when the low levels in the Rhine halted goods transport for 132 days. Authorities do not expect a total shutdown in shipping but there is a risk that without significant rain in the short-term that shipping may be more severely impacted.

In recent weeks, the so-called hunger stones have emerged along the banks of the Rhine. The emergence of these stones has brought back memories of past droughts as the stones bear people's names and dates including 1947, 1959, 2003, and most recently 2018.

Groundwater is declining at 2.5 cubic metres per year

While we have been mostly focusing mostly on the recent low levels of water in the Rhine, throughout Germany, there is a severe depletion of water sources. Groundwater levels are depleting to critical levels. Satellite imagery from the Grace project experiments conducted by NASA with the German Aerospace Center shows that water content in the soil and ground is declining at 2.5 cubic kilometres per year. Declining groundwater has already impacted one Bavarian town, Teuschnitz, where local wells have dried up and the city is no longer able to supply its water from local sources. Numerous other cases are surfacing throughout the country and increasingly, water rights and questions over rights afforded to large corporations and industry are being questioned.

Germany has always been considered a water-rich country, however, as the impact of climate change is felt throughout the country year on year, this perception is changing. Climate change has resulted in hotter summers and much drier winters with an overall steady decline of water across the region. One of the risks of severe drought is flash flooding when the rain eventually does fall due to the soil’s inability to absorb water quickly. In 2021, Germany experienced severe flooding following two intense years of drought. This caused widespread destruction. Extremes may be the new normal not only for Germany but for many other countries.

Italy

The Po River, with extremely low levels of water, Verrua Savoia, Italy

On the 8th of August, it was reported by the BBC that a 450kg bomb was found by local fishermen on the banks of the river Po. With unusually hot weather and low rainfall, large sections of the 650Km long river have dried up exposing hidden treasures and in this case a dangerous Word War 2 munition.

The river Po starts in the southwestern Alps and winds its way down to the Adriatic sea. It is Italy’s longest waterway and is responsible for the irrigation of a third of the country’s agriculture. The flow rate of the river has fallen to one-tenth of the usual reading for this time of year and the overall water level is 2m below the usual level. With drier winters resulting in a 70% reduction in snowfall coupled with substantially reduced rainfall in the region, the river Po already had less water this year. Under the relentless summer heat, the river has been reduced to extremely low levels.

The impact of the low levels of water in the river along with necessary restrictions implemented by the government has directly impacted the nation's agricultural sector which normally accounts for 70% of the water withdrawals each year. The Po valley produces around 40% of the nation’s food requirements including the production of one of the country’s most important products Rissotto rice. In Lombardy and Piedmont, about half of Europe’s rice is produced and the drought's impact on production will have a knock-on effect on the already heightened global food crisis.

Harvest estimated to be 60% less this year

Rice requires huge amounts of water to produce its harvest and the paddy fields have to be kept flooded for months at a time. Due to the current drought, it is estimated that half of the annual crop will be lost and what remains will be substantially less than the traditional harvest. By some estimations, the harvest this year will be reduced by up to 60%. Farmers have abandoned some fields and reduced the frequency of watering in others, all of which will have a direct impact on the overall yield. Due to the extremely low levels in the reservoirs and rivers, farmers have had to resort to using water pumps to sustain what remains of their crops and to reduce the frequency of watering. Added to this cost, are the increased costs of electricity, petrol, and fertilizers, mostly due to the ongoing war in Ukraine and global inflation. The knock-on effect of the drought will be higher prices for food and reduced availability.

There is a serious need to address the issue as the drier spells look set to continue. A recent study found that these dry spells have generally increased since 1983 and that annual rainfall has decreased by about 20%. With global warming, the situation is predicted to become even more severe with more frequent droughts predicted.

Italy’s largest lake, Garda is sitting just above its lowest ever recorded level exposing large swathes of underwater rocks. Up until July, authorities had been releasing larger amounts of water from the lake to other rivers in order to help supplement the reduced water availability (mostly for agriculture). However, in July, the authorities had to reduce output from the lake in order to protect what remained and protect the tourism associated with the lake. The high temperatures and receding waters have seen the lake's water temperature rise to 26 degrees Celsius, an almost tropical-like water temperature. A popular tourist destination, this year many tourists have been left shocked by the substantial change to the landscape.

Similar to other European countries, Italy has experienced drier winters and hotter summers, particularly over the past 4 years. This has resulted in huge reductions in snowfall and rainfall that have substantially reduced the amount of available water in the country.

France

Wheat field near Puimoisson, Provence, France

France has been hit by a series of heatwaves, low rainfall, and a massive reduction in water availability. In July, rainfall in France was just 9.7mm which is an 85% deficit for the time of year. This was the driest month of July since 1959 and the high temperatures have been scorching the landscape resulting in multiple wildfires resulting. In turn, these have caused millions of Euro’s worth of damage to land, infrastructure, and resources.

July rainfall was so low that it resulted in an 85% deficit

Just like in other European countries, France has seen a major impact of the drought on its waterways, water sources, and agriculture. The longest river in France, the Loire dried up so significantly that it could be crossed on foot in multiple places. With the drastic reduction in not only the Loire but other major rivers, France has had to reduce the amount of electricity produced by its nuclear power plants. Up to 70% of the country’s power is produced by these plants so the impact of reduced power production is felt by consumers in terms of cost and supply. The current river flow is at 40 cubic metres a second and would be much lower if the authorities had not released water from the dams located at Naussac and Villerest.

France is the European Union's biggest grain producer and the lack of rain and severe drought may have a serious impact on the overall yields (7% less) prompting further increases in the price of wheat in the months to come. The corn harvest, used mainly for animal feed, is also expected to be lower (18.5%) and these lower volumes will push prices up. In further bad news for agriculture, it is estimated that the output of fruit and vegetables will be reduced by around 35% this year due to the drought and reduced water availability. These reductions in supply will affect prices and availability for consumers.

100 towns without drinking water

In early August, it was reported by Euronews that over 100 French towns were without drinking water due to the unprecedented historic drought in France. Water had to be trucked in to supply these towns with water. Throughout France, widespread water restrictions were put in place to reduce consumption and preserve what remains.

In all the doom and gloom of the drought, one industry in France has bloomed due to the higher temperatures. The salt industry in France produces one of the finer salts in world markets known as Fleur de Sel which can retail at $100 per kilogram. The heatwaves have supercharged evaporation in the region of Guerande where the salt is produced and this has increased the yields with record production expected. Normally, the region produces on average 1.3 tons of salt per year. This year it is expected to produce double that at 2.5 tons.

Following the recent extreme drought, Southern France was hit by torrential downpours that resulted in flooding in several areas. The rain helped to ease the burden of firefighters fighting the various wildfires in the region but is far from adequate to break the grip of the current drought on the country.

Conclusion

Image showing a wastewater treatment plant
Wastewater treatment plant

While in the past, some may have debated the impact of human activity on climate change, and perhaps the existence of climate change itself, it is abundantly clear from the science and data that this is no longer a debate. We cannot continue to ignore the impact of our activity on the planet's climate. The increase in greenhouse gasses has created a blanket effect that has resulted in a significant rise in global temperatures over the past 50 years. The rise in temperature far eclipses any natural warming events previously recorded in the earth’s history.

The increase in greenhouse gasses and global temperatures has also increased precipitation. The increased precipitation is however not evenly distributed and so many regions will experience a severe lack of water while others face flooding. We are more likely to see an increase in extreme weather events with some regions experiencing extreme drought and others flooding. This leads to an unpredictable availability of water and further disrupts ecosystems and impacts millions of people.

Climate change is exacerbating conditions at a faster and faster rate than previously anticipated by scientists. Increased evaporation, a greater demand for water from growing populations, and agriculture coupled with decreased rainfall, and snow have created the perfect climate storm that has increased global water scarcity. Scenes that recently played out in Europe, are more regularly becoming the new normal around the world. Drier winters, hotter summers with less rainfall, and dwindling available water supplies.

Water fuels our modern way of life and enables us to sustain huge populations mostly urbanized and living in cities. Without an adequate supply of water to not only cater to the daily needs of the population but also to power the agricultural sector to enable it to grow food, our modern way of life would collapse. Not only is the available supply important but equally important is how we manage the water resources that we do use or have access to.

Worldwide it is estimated that 80% of the world’s wastewater (sewage, industrial waste, stormwater, etc) is simply dumped directly untreated into our waterways and oceans. This wastewater pollutes an already precious resource and further impacts the availability of water and the sustainability of life that relies on that water to thrive. There is a need to drastically increase the amount of wastewater that is recycled globally and to reduce the negative impact of this on the environment. New wastewater treatment facilities need to be rapidly brought online to treat at least 80% of the world’s wastewater.

In many parts of the world, the lack of treatment results in serious health issues for human populations and causes the breakout of diseases such as cholera. Waterways are increasingly polluted as a result of wastewater emissions which reduces the amount of available clean fresh water not to mention compromises the ecosystems that rely on these water sources.

Most of this pollution is a byproduct of human activity and if managed more efficiently largely avoidable. Things such as industrial waste, sewage waste, and stormwater waste are the largest contributors to the pollution of waterways. Healthy ecosystems can also help to increase water retention in the surrounding areas and reduce pressure on other sources of water.

Agriculture consumes by far the greatest amount of freshwater on the planet. A whopping 70% of the world’s annual water withdrawals are made by agriculture. It is imperative that innovative new irrigation techniques and farming methods are implemented that will reduce water consumption and increase efficiency. Crop selection is equally important and switching to less water-intensive crops is one possible solution. Overall there is a need to reduce the demand for agriculture, particularly as world populations continue to grow.

Another important aspect is the education of the global population in order to change consumption and usage habits. This can play a huge role in helping not only to preserve more water but to prevent contamination of water bodies.

In cities, aging infrastructure needs to be maintained, replaced, or updated in order to increase delivery efficiencies. Leaking pipes and taps accounts for a huge amount of wasted water per annum in cities around the world. Fixing infrastructure can help to save millions of litres of water per annum. Greater efficiencies in the supply and delivery of water are required in the coming decades.

Today, it's Europe tomorrow, California, and then perhaps it will be India again. The next country on the list is immaterial when looking at the global picture. We are seeing unprecedented changes in the world’s climate systems that are having a direct impact on the availability of water. The lack of water places stresses and strains on people, industries, and economies around the world.

Climate change is affecting the interconnected global community like never before with supply chain disruptions, the migration of people, war, famine, and increased disease seeming inevitable. In some way shape or form, you will and most likely are being affected by water scarcity. What is clear is that action needs to be taken in order to avoid a global crisis of epic proportions.

There is a need for a radical paradigm shift for many of these countries in how they manage, utilize, think about, and protect their water resources in the future. With the impact of climate change and global temperatures set only to worsen in the coming decades, serious interventions and changes need to be made today to protect the future of tomorrow. From policy creation, regulation, and enforcement to implementing changes in water management, the world has to act today on an international level and scale to protect tomorrow.

If the staggering numbers of people currently affected by water scarcity or regional water issues don’t yet force the world to take action, perhaps the growing climate crisis and changing weather patterns will help to wake us from our slumber. In the coming decade, the world needs to radically shift and change how it manages, uses, and protects its water. Along with better management, new infrastructure, upgrades of old outdated infrastructure, and new systems will need to be implemented, invented, and brought online in the decades to come in order to solve global water scarcity.

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This article is brought to you by H2O Securities. H2O securities are committed to solving the global water crisis and taking an active role in the future of water infrastructure finance. To find out more about H20 securities go to https://h2o-securities.com/

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