Is Climate Change Drying Up German Rivers — and Growth?

(Bloomberg Opinion) -- Greg Fuzesi, an economist at JPMorgan, has estimated that the low level of the Rhine and other important German rivers shaved off 0.7 percentage points of economic growth in 2018. The phenomenon, caused by a year of extraordinarily warm and dry weather, was almost certainly related to human-driven climate change.

The damage to the economy makes it even more urgent for Germany and other countries to start figuring out what weather anomalies will be more frequent because of climate change. While it was next to impossible until recently to determine whether a certain event was due to global warming, there now are methods that make such attribution possible.

The German economy only grew 1.5 percent in 2018. If Fuzesi is right, growth wouldn’t have dropped from the 2017 level of 2.2 percent had major waterways not dried up. According to his calculations, the drought was the second biggest slowdown factor for Germany after new emissions regulations that undercut car sales. 

Rivers, especially the Rhine, play a central role in moving fuel, raw and construction materials in Germany. According to official statistics, inland waterways carry about 5 percent of all cargo in Germany, almost two-thirds as much as the railroads. In January through September 2018, the rivers carried 156.7 million tons of cargo. That’s 6.1 percent less than the previous year, but the available data don’t cover the full extent of the decline, which was especially pronounced in the fall. Water in the Rhine is still considerably lower than average, and, according to a recent report from the broker Riverlake Barging, a standard 2,500-ton fuel barge traveling down the river can only be loaded to about 80 percent of capacity.

Germany has certainly experienced a weather anomaly: 2018 was the warmest and sunniest year since records began. And between February and November, the country was hit by an extraordinary drought, with only 75 percent of the average precipitation for the year. Not all the news was bad, however. The elevated temperatures probably contributed to making 2018 the ninth consecutive record year for the country’s tourist industry, and helped the beer industry register some growth after a considerable drop in 2017. There’s a higher than usual grape harvest, too. On the other hand, grain farmers were hard hit by the drought and called for government support.

Given the relatively slow growth of Germany’s mature economy, with its high capacity utilization, low unemployment and a population that’s barely increasing, extreme weather can wreak havoc with forecasts. It can even turn growth into decline: A few months of lightly loaded fuel barges on the Rhine can mean the difference between market pessimism and optimism about the state of the economy.

Climate scientists predict that extreme weather events will be more frequent with climate change. No country can fight this alone, and it’s probably impossible to prevent more economically damaging weather anomalies. So policy makers and businesses need to at least figure out what to expect.

For that, they must determine to what extent a particular weather anomaly can be attributed to climate change. As Paul Becker, vice president of the German Weather Service, put it, “Only with this knowledge is it possible to see which extreme events will change their frequency and intensity in the future and develop the measures necessary to adapt to it.” 

Recently developed methods allow this kind of attribution for specific events. Friederike Otto, a climate modeler at the University of Oxford, found that last year’s summer heat wave in northern Europe was twice as probable under current conditions than if human activities hadn’t affected climate.

The German weather service plans in the near future to start using similar methods and reporting the climate change component in extreme weather events. Hopefully, though, this won’t just serve to increase Germany’s preparedness for more droughts, heat waves and other unusual phenomena. Collective action is needed to mitigate climate change; adapting to it can only be a half-measure – and if the change accelerates, it may turn out to be a hopeless race.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Leonid Bershidsky is Bloomberg Opinion's Europe columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website

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