The Dean of Wine Economists Talks About the Impacts of Climate Change

The most climate sensitive sector of virtually any economy is agriculture, and of the many agricultural crops, surely one of the most sensitive to the climate is grape production for premium wines.  The impacts will be different for different wine-producing regions, ranging from Bordeaux to the Napa Valley, and it will be good news for some regions, such as the United Kingdom, with its burgeoning production of excellent sparkling wines. 

There is simply no one better in the world to talk about these impacts and what they mean for the wine industry than Orley Ashenfelter, the Joseph Douglas Green 1895 Professor of Economics at Princeton University, who virtually launched rigorous economic analysis of wine production and consumption.  You can listen to our conversation in the latest episode of my podcast, “Environmental Insights: Discussions on Policy and Practice from the Harvard Environmental Economics Program.”  Our full conversation is here.

In these podcasts, I converse with leading experts from academia, government, industry, and NGOs.  Orley Ashenfelter fits perfectly in this group.  Beyond his Princeton professorship, he has served as president of the American Economic Association, the American Law and Economics Association, and the Society of Labor Economics, and was the long-time Editor of the American Economic Review (for 16 years!).  He is a Member of the National Academy of Sciences, and a Distinguished Fellow of the American Economic Association, the American Academy of Arts and Sciences, and the Econometric Society.

Although he is very well known for his extensive research and writing in labor economics, econometrics, and law and economics, for those of us who are wine aficionados, he is celebrated for his pioneering work on the economics of wine.  So, in addition to all of the positions I mentioned above, for purposes of this blog essay, it may be more important to note that he is the current president of the American Association of Wine Economists and my fellow Co-Editor of the Journal of Wine Economics.  

When we discuss the relationship between global climate change, grape growing, and wine production, Ashenfelter remarks that there are already some “quite remarkable things happening,” because some grapes are adaptable to extreme weather. For example, he cites the Marquette and Frontenac grapes which have been hybridized to withstand the cold winters of Minnesota!

Ashenfelter also references his research on French grapes, some of which have actually benefitted from global warming.

“After 1980, there’s literally not a year in which temperatures dropped back into the levels they were in the summers of the 1960s and 70s,” he says. “The primary effect in Bordeaux has been much warmer summers, and the primary effect of that has been much better wines.”

Ashenfelter also notes that some of the grapes grown in northern Italy, which are sensitive to cooler summers, are performing better in recent years.

“You can see the prosperity [in that region]. They’re getting more wine at high quality,” he says. “Now the problem of course is that some places are already too hot, and you can see the adaptation going on … in Greece, where what people are trying to do is to grow grapes at higher elevations. Higher elevations get you a little cooler.”

“In Spain, there’s deep concern about it,” he continues. “The Torres family has bought a lot of property in the mountains of Catalonia, preparing for the possibility that they may have to grow grapes at much higher elevations if they want to keep growing the same grapes they have grown. What you do see is a little incursion of some of these hybridized grapes.”

Adaptation also brings its challenges, Ashenfelter emphasizes, particularly for European winemakers.

“The ability to be able to adapt is in some places going to be restricted by government regulations, and it may just be that over time, there’ll have to be some relaxation of those regulations as there has been for example, in Italy. It may just be necessary. The Americans are … more loose about this. We use place names, but we don’t have any requirement that a certain grape be grown in a certain place.”

Temporary heat spikes or extreme cold snaps also pose a threat to grape growers, because they are highly unpredictable, and their effects can be severe.

“Grapes do not do well above 95 degrees, and they don’t do well below 55 degrees. These 105-degree heat spikes, unless you just throw water at the plant, the plant will actually suck the juice right out of the grapes and leave you with nothing,” Ashenfelter explains.

“A vine takes five years to mature,” he continues. “It’s extremely costly when you get these giant, super cold spells. And we’ve seen them happen in places where no one really would’ve expected them in the past. I don’t know how much that is climate change or how much it is something else.”

For this and much more, I hope you will listen to my compete conversation with Orley Ashenfelter, the 34th episode in the Environmental Insights series, with future episodes scheduled to drop each month.  You can find a transcript of our conversation at the website of the Harvard Environmental Economics Program.  Previous episodes have featured conversations with:

“Environmental Insights” is hosted on SoundCloud, and is also available on iTunes, Pocket Casts, Spotify, and Stitcher.


Author: Robert Stavins

Robert N. Stavins is the A.J. Meyer Professor of Energy & Economic Development, John F. Kennedy School of Government, Harvard University, Director of the Harvard Environmental Economics Program, Director of Graduate Studies for the Doctoral Program in Public Policy and the Doctoral Program in Political Economy and Government, Co-Chair of the Harvard Business School-Kennedy School Joint Degree Programs, and Director of the Harvard Project on Climate Agreements.