Why We Need Rain in Spain

When we talk about global warming, our perspective is distant, rather like looking at the earth from space. But then, remembering what mathematician Benoit Mandelbrot said about the British coastline, the closer we look, the more we see:

Similarly, with global warming, the closer we look, the more we see about Spain’s olive crop.

Global Warming and the Olive Crop

During 2025, Europe’s extreme agricultural drought affected its olive crop. This year, it could be worse. Last week, record breaking temperatures topped 100 degrees Fahrenheit (38 degrees Celsius).

The Olive Press tells us that one olive tree needs 10 liters of water each day. Near the town of Sorbas in Spain, across 2300 hectares, 4 million olive trees need 40 million liters of water a day. As a result, especially when temperatures soar, the local aquifer has to cope with potentially unmanageable demand.

Now, with 100 degree temperatures, we could predict the impact of the current heatwave by looking back at the 2022 and 2023 drought when yields were down by more than 10%. Consequently, the price of Spanish olive oil soared:

In addition, olive growers have had to cope with global warming weather inconsistencies. Combined with the heat, rainfall can vary from none to torrents. Italian agroclimatologist Marco Moriondo told the Olive Oil Times, “An olive grove can survive a warmer average climate but a single day of extreme heat during flowering can destroy an entire harvest, even if the rest of the season is perfect.”

Our Bottom Line: The Diamond Water Paradox

Called the diamond water paradox, Adam Smith wondered why diamonds cost more than water when we need water to survive and diamonds are merely an extravagant luxury. Years later, economists had the answer.

It took them to the margin, to the cost of the next extra unit. With diamonds, we would rather have that one extra diamond and will pay a lot for it. However, with water, when there is a lot, the next extra glass, or flush, or shower costs little…

…Until olive farmers experience a drought.

My sources and more: Starting with a Yahoo Finance overview, we continued with the Olive Oil Times and then the town of Sorbas in the Olive Press. However, Columbia’s Climate School and Nature also came in handy as did CNBC and the NY Times.

Please note that several of today’s sentences were in a past econlife post.