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Introduction 1 Sustaining the international wine industry in the midst of climate change: what is Australia doing? James Turton PhD Candidate Department of Business Law Faculty of Business and Economics Macquarie University Sydney, Australia INTRODUCTION This paper will examine how climate change will impact the sustainability of the Australian wine industry. Climate change will effect the wine industry in a variety of areas including terroir, timing of grape picking, costs involved in wine production, and the quality of wines produced. In an era where climate change concerns are on the minds of an ever-increasing number of people, developing strategies to mitigate the potential adverse effects on the wine industry has become critical. Consequently, various challenges exist that wineries will need to address in order to remain competitive. Challenges faced by the wine industry in responding to climate change are in area management given the increasing incidences of adverse weather conditions such as drought, flood and fires causing physical damage and smoke taint. Production and marketing approaches (labelling, brands, consumer behaviour etc.) also need to be 2 addressed. Wineries in Australia have responded to these challenges. New processes for producing wine in a more sustainable way have been implemented. However, while these processes usually result in wines of higher quality, they come at an additional cost that the public struggles to justify paying. These challenges look as if they are going to increase in size and frequency as a consequence of climate change. CLIMATE CHANGE SCIENCE: SOME BACKGROUND The Intergovernmental Panel on Climate Change (IPCC) defines climate change as “a change in the state of the climate that can be identified (e.g., by using statistical tests) by changes in the mean and/or the variability of its properties, and that persists for an extended period, typically decades or longer”. Nicholas Cahill and Field (2008, p. 1) make an important distinction between ‘climate’ itself and climate change noting that “climate is the statistical summary of weather over 10 to 30 years”. Therefore it is crucial to examine changes to the planet’s climate over these time periods, rather than on a year-by-year basis. The scientific community has reached overwhelming agreement on the key aspects of climate change, namely that global climate warming is already underway, primarily caused by human emissions of heat-trapping greenhouse gases to the atmosphere, and is very likely to warm a further 1.6-4.0°C over the coming century under continued ‘business as usual’ emissions scenarios (Intergovernmental Panel on Climate Change, 2007). 3 Nicholas Cahill and Field (2008, p. 2 (generally)) point out that the role of greenhouse gases in affecting the earth’s climate has been understood for a long time. Swedish scientist, Svante Arrhenius published a paper in 1896 using very simple calculations to show that increasing the concentration of atmospheric CO2 by 2 to 2.5 times could cause a warming of 3.4°C (6.1°F), a number close to the middle of the current range of projections. The 2007 reports of the IPCC make it clear that climate has warmed in recent decades and that human actions are a likely cause of most of the warming. The Panel has stated that: Warming of the climate system is unequivocal, as is now evident from observations of increases in global average air and ocean temperatures, widespread melting of snow and ice, and rising global average sea level... Most of the observed increase in global average temperatures since the mid- 20th century is very likely due to the observed increase in anthropogenic [human-caused] greenhouse gas concentrations. Nicholas Cahill and Field (2008, p. 7) further claim that even small changes in temperature could have big impacts on the [wine] industry. However, as to what these impacts are exactly, is difficult to determine, due to the unpredictable nature of the Earth’s climate. In addition, Schultz (2000, pp. 10-11) states that “an additional 4 uncertainty lies with the response of grapes to high CO2 levels”. Consequences for grape production throughout the world remain unclear because there is very little data available on how grapevines respond to high CO2. One point that can be made though is that grapevines have a large adaptive potential to changes in the environment, at least with respect to temperature and possibly to CO2. 5 THE PROBLEMS OF CLIMATE CHANGE FOR AUSTRALIAN WINES AND WINERIES Climate change has the potential to adversely impact the quality of Australian wines. Looking firstly at temperature projections for Australian wineries, we can estimate the regional cost of climate change to the Australian wine industry for the years 2030 and 2050. For example, “the projected warming in McLaren Vale (in South Australia) ranges from 0.3°C to 0.7°C by 2030, and this could result in a 2 to 6% reduction to winegrape quality. However, a projected warming of 0.4°C to 1.7°C by 2050 could reduce quality by 3 to 17%” (Webb et al 2008, p.107-108). Furthermore, “an increasing frequency of extreme events has the potential to affect crops more than high temperatures per se. For instance, a 15-day ‘hot spell’ in South Australia in March 2008 resulted in large quality reductions and fermentation problems” (Webb, et al. in Stokes and Howden (Edts.), 2010 p. 103). Smoke taint has also become an increasing problem for winemakers as a result of climate change or climate-induced changes to weather, particularly increased temperature, drought, wind and lightning strikes. Grape and grapevine exposure to smoke has been shown to affect the chemical composition and sensory properties of wine. In some cases, fires have occurred in close proximity to wine regions resulting in vineyard smoke exposure and smoke tainted wines. The taint, characterised by objectionable ‘smoky’, ‘dirty’ and ‘burnt’ aromas and a lingering retro-nasal ‘ash’ character on the palate, has caused significant financial loss for grape and wine producers see (Kennison et al. 2008 p. 7379). Smoke taint due to wildfires cost Australian grape growers more than $7.5 million during the 2003 and 2004 vintages. 6 In 2003, Victorian growers suffered at least $4 million losses due to fire in adjoining national parks. Fires again struck Victoria in February 2009, resulting in a loss of wine grapes, and a great decline in quality as a result of smoke taint (Webb, et al. in Stokes and Howden (Edts.), 2010 p. 105). With the incidence of bushfires projected to increase, Webb et al., in Stokes and Howden (Edts.) p. 105 claim that “the risk of smoke taint is likely to increase”. Although not a consequence of climate change, arson, too, further exacerbates smoke taint related problems for winemakers, with a number of fires being deliberately lit across Australia each year. Given the above points, it is therefore imperative that steps are taken to mitigate the effects of smoke taint on wine – whether the fires are a result of arson, a changing climate, or controlled burning. Water management is also a major concern for winemakers given the increase in droughts and floods worldwide due to climate change. The reason for this is that as a consequence of climate change, both floods and droughts will increase, making managing water usage difficult due to the uncertainty of the amount available. Winemaking can use a great deal of water if the vineyard is not properly managed. Therefore, winemakers need to implement practices so as to minimise the amount of water usage. This is and will continue to be a challenging exercise as the winemakers seek to deliver a quality product in an environment where water is becoming increasingly scarce. Finally, it is also noteworthy that “in 2006 widespread frost damage decimated vineyards in many parts of Australia’s wine regions. Widespread frost damage also 7 occurred in 2003, another hot and very dry year (Webb, et al. in Stokes and Howden (Edts.), 2010 p. 105). This illustrates a further adverse effect experienced by Australian winemakers as a result of climate change. GRAPE QUALITY AND THE CONCEPT OF TERROIR IN THE MIDST OF CLIMATE CHANGE Wine production is intimately wedded to the concept of terroir: matching premium grape varieties to particular combinations of climate and soils to produce unique wines of particular styles (Webb et al. in Stokes and Howden (Edts.), 2010 p. 102). Ron Laughton from Jasper Hill Vineyards says that wines without chemicals can better express the flavours of the terroir, pointing out that “flavours are created in the vine. The building blocks are the minerals in the soil. If you keep applying synthetic chemicals, you are upsetting the minerals in the soil. So if you wish to express true terroir, you should be trying to keep the soil healthy.” (Morganstern, 2008, in Delmas and Grant, 2010 p. 12) White et al. (2009 pp. 83-84) argues that: The current rate of climate change is unprecedented, and is likely to challenge the geographically fixed concept of terroir. If a particular terroir or ‘sense of place’ for a wine is established, and the elements making up that fixed terroir change as climate changes, keeping the concept of terroir in tact will be difficult from both a legal and a marketing perspective. 8 Given the above points, White (2009 pp. 83-84) therefore further argues that “an increased use of technology and a geographically adaptive sense of place will probably characterise terroir in the twenty-first century, if the concept is to survive”. Embodied in a wine’s terroir is the quality of grapes produced to make the wine. Winegrapes have four main developmental stages: budburst, flowering, veraison (berry softening and colour change signalling the onset of rapid sugar importation), and maturity (when ripe grapes are harvested) earlier (see Webb et al., in Stokes and Howden (Edts., 2010 p.
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