Kingdom of the Netherlands: From Floods to Droughts
by Karianne de Bruin (Deltares)
This case study is drawn from the larger report Managing Water for Economic Resilience: De-risking Is Not Enough, published April 2024.
Key Messages
The Netherlands uses a comprehensive approach to protect against flooding, combining laws, land-use planning, and infrastructure. Economic incentives and innovative building methods help reduce flood risks through mechanisms such as green bonds aimed at enhancing climate resilience.
The Netherlands’ challenge is to become resilient to both too much and too little water. Since 2003, western Europe, including the Netherlands, has faced recurring intense droughts, with significant consequences in 2022. Understanding the environmental and economic impacts of droughts in the context of climate change and upstream developments is key.
As the Netherlands grapples with the emerging issue of droughts alongside traditional concerns of flooding, the country is rethinking its resilience strategy at local levels. While complete protection from both threats is unattainable, new tools and balanced investments aim to maintain a high standard of living and attract investment amid an evolving climate.
The Delta Programme's successful approach to flood risk management offers a blueprint for tackling droughts, emphasizing urgency, inclusive participation, idea incubation, and consensus-building to inform long-term adaptation strategies.
Collaboration is essential in terms of upstream developments and planned investments and to learn from other regions across the world that have been dealing with too little water for much longer.
Introduction
For more than a millennium, the Netherlands has experienced regularly extreme inundation events, most often from storms from the North Sea and high river levels from inland, upstream precipitation. Many regions accounted for this in their implicit development strategies to “reclaim” land from the sea for farms and cities, building dykes to secure land from high waters, and extensive, constant pumping to move water away from low elevations. Nearly 60% of the Netherlands’ area is susceptible to large-scale coastal and river flooding. About one-quarter is below present mean sea level, making flood risk management and adaptation to sea-level rise essential for its existence.
National economic planning was shaped by the need to secure property and life from the threat of flooding. This was a side effect of the strategy of economic growth through, in part, increasing the area of the Netherlands through the conversion of near-shore areas into dry land. Governance, land-use planning, and infrastructure operations and investment were tightly integrated to reduce flood risks. Many of these approaches became integrated into a national water- (and flood-) centric Delta Commission in 1953 after a catastrophic flood event in the southern part of the country. Much of the language around these issues described “fighting” water from rivers and the sea. A legal framework was established, including norms for flood protection. Rijkswaterstaat, regional water boards, and an expert community worked together to maintain the framework of protecting the Dutch delta against flooding. However, as pointed out by Van Buuren (2019) who assessed the Dutch Delta approach, two “near-miss” riverine flooding events in 1993 and 1995 showed that “past success could not be allowed to breed complacency.” This resulted in the implementation of the Flood Protection Act and the establishment of the “Room for the Rivers” program to enhance the discharge capacity of the rivers.
The 21st century has seen quite different drivers and trends emerge, with the threat of climate change taking a more dominant role. A second Delta Commission was convened in 2007, which initially focused on higher flood risks to ensure long-term flood resilience for the Netherlands. The second Commission targeted governance reform, more flexible approaches to planning to cope with uncertainties in the timing of growing flood risks, sea-level rise, and the use of nature-based solutions integrated within traditional gray infrastructure systems. Economic incentive systems promoted mechanisms to reduce flood risks even with more intense flood events, such as promoting local climate adaptive design through subsidies for green roofs, and stimulating innovations for floating domestic and commercial constructions.
National finance institutions took a leading role. For example, the National Waterboard Bank (NWB) issued the largest green bond in European history in 2019 for €5 billion, which funded projects related to: climate change mitigation (in the form of waterway management), climate change adaptation, investments in climate-resilient growth (e.g., flood protection and other flood defenses, and pumping stations), and biodiversity projects related to water (NWB Bank, 2019). The NWB is a publicly owned financial institution that only provides funding to water authorities and local governments. Proceeds from green bonds are allocated to a selected pool of loans that promote the transition to low-carbon and/or climate resilient growth through financing of adaptation measures as determined by the water authorities, according to their mandate as defined by the Dutch Water Act. Climate resilience is at the heart of the water authorities’ activities (CICERO Shades of Green, 2022).
From Floods to Drought
Beginning in 2003, western Europe began to experience a series of intense droughts that have continued into 2023. In the Netherlands, four of the last five years were exceptionally dry. In 2022 spring and summer were characterized by a combination of prolonged periods with little rain and large evaporation due to the sunny warm weather. This meant that not only the supply of water was lagging behind due to rainfall, but that also the supply of river water was low, with significant consequences. Due to the low water levels in the rivers, shipping became more difficult and transport between Rotterdam and the German hinterland was limited.
The intake of freshwater for groundwater level management and flushing of the polders to combat salinization was also limited. Bans on water exclusion meant that crops could not be supplied with sufficient water. The bans on water exclusion by the agricultural sector were determined based on the “displacement series” as defined in the Water Act. The series indicates how the distribution of freshwater is prioritized across different sectors. For the agricultural sector this often means that in parts of the country there is a ban on using fresh water to irrigate crops. Yields for arable farming were ultimately not severely impacted by the 2022 drought, and due to higher prices, there was an improvement in income for arable farmers.
Other activities were also impacted. Due to the high water temperatures, the efficiency of energy production decreased. Water quality was significantly reduced, leading to problems such as the explosive growth of blue-green algae and botulism, restricting the ability for citizens to swim in open water due to possible health impacts.
Understanding the Economic Impact of Drought
Incidental drought has positive economic effects for some sectors such as shipping and agriculture due to (temporarily) higher prices for products and services. However, prolonged dry conditions also have many indirect consequences everywhere from urban areas to peat meadows to nature reserves.
The consequences can be large for natural systems. The Netherlands has many protected groundwater-dependent ecosystems at risk from droughts. Elsewhere, peat meadow areas face irreversible oxidation resulting in CO2 emissions.
Infrastructure is also impacted. Reductions in groundwater can lead to damage to foundations (pole rot) and buildings or other structures (uneven settlement) for which repair costs are high. Drying out of peat dykes and cracks in dykes with a clay layer can further reduce the stability of flood defenses, meaning that prolonged drought thus increases the risk of flooding. In the Netherlands, between 750,000 and 1,000,000 properties have a wooden pile foundation or a foundation on steel. These buildings are sensitive to drought. The expectation is that the damage to these buildings may increase until 2050 up to €60 billion due to pole rot, low groundwater levels, and increasing drought (KCAF, 2021).
The impacts of the 2018 drought in the Netherlands have been assessed and quantified by researchers. Ecorys (2019) estimated the overall economic effect of the 2018 drought at €450–2080 million. Mens et al. (2022) estimated economic consequences of future droughts following a worst-case Delta Scenario 2050 (Stoom) for the economy, where economic growth, strong population growth, and strong and rapid climate change converge. The scenarios provide qualitative and quantitative data on the climate, water systems, water consumption, and the use of land. Based on the model simulations, the current drought risk in the Netherlands is estimated at €372 million per year and may increase to €611 million through 2050.
Adapting to Water Shortages
Adapting to water shortages is the main challenge for the Netherlands, and much more complex than adapting to high water levels. Reforms are necessary on numerous fronts. Long-term structural adjustments will be needed to maintain the navigability of the major rivers. Space must be found to develop large-scale water storage. Sustainable groundwater management plays an important role as well.
Adapting to saltier and drier conditions requires commitment from the entire water chain — from both the supply and demand side. Possible options include growing other crops, infrastructure that is much more resistant to corrosion, and increasing water retention in both surface water and groundwater.
The Delta Programme's approach to flood risk can serve as a good example for the implementation of structural reforms to deal with droughts. As pointed out by Van Buuren (2019), the second Delta Programme reinvented its policy approach to implement structural reforms. Important mechanisms in the context of adapting to water shortages included: 1) emphasizing the urgency of adapting to water shortages, 2) facilitating the participation of a broad range of actors, 3) creating a seedbed for promising ideas, and 4) achieving joint fact-finding to establish consensus and build upon existing institutions (Van Buuren, 2019). These mechanisms can inform the creation of adaptation pathways that provide insights into options, lock-in possibilities, and path dependencies and support decision-making on long-term adjustments. Adjusting means making new assessments, for example, as a continued part of the Delta Programme.
For long-term investments, it is important to consider that the agriculture and energy transition as well as ongoing housing challenges place different requirements on the soil and water system. Storage of water takes up space. Favorable locations for housing can often also be combined with the collection of water from extreme precipitation. To assess these adjustments, it is important to understand the barriers and synergies between different interests and needs. As an example, from the point of view of flood risk management and freshwater management, closing the Waterweg near Rotterdam is a plausible solution. But, this is not the case from the perspective of the accessibility of the port of Rotterdam. For drought control the water storage purposes, it should be as full as possible with water. For flood risk management purposes, the space should be free of water to temporarily store as much precipitation as possible. Evaluation of tradeoffs is an integral part of long-term investment planning.
Conclusions
Collaboration will be an important priority for the Netherlands going forward, in terms of upstream development, broader macroeconomic policies and investments, and to learn from other regions who have deeper histories with water scarcity issues. It is essential to cooperate across borders with countries such as Belgium, Germany, and Switzerland. Distribution of scarce water with neighboring regions will become increasingly important to become water resilient in the future, and iInitiatives such as the International Commission for the Hydrology of the Rhine Basin (CHR) are already contributing to this effort.
Although drought is a relatively new problem for the Netherlands, the potential for water scarcity problems are being integrated into how the country approaches older concerns around flooding and inundation. Fundamental shifts are occurring in how the country views resilience as a strategy and then implements that strategy at more local levels. Challenges remain, such as how to balance investment, governance, and tradeoffs between these risks. “Complete” protection from both threats is not possible, but new tools can ensure that the Netherlands retains a high standard of living, remains attractive to investment, and prospers even as an uncertain climate continues to evolve in unexpected ways.
References
CICERO. 2022. “Netherlandse Waterschapsbank - Green Bond Second Opinion.” CICERO Shades of Green. https://pub.cicero.oslo.no/cicero-xmlui/bitstream/handle/11250/2720421/CICERO_Green_SPO_NWB_12%20May%202022.pdf?sequence=1&isAllowed=y
Ecorys. 2019. “Economische schade van droogte in 2018.” https://www.ecorys.com/sites/default/files/2019-10/20190221%20Rapport%20Economische%20schade%20door%20droogte%20in%202018.pdf
KCAF. 2021. “Deltaplan funderingsschade.” https://www.kcaf.nl/deltaplan-moet-grootschalige-funderingsschade-voorkomen
NWB Bank. 2019. “The Water Bond Report 2019.” https://nwbbank.com/application/files/4415/8531/4999/The_Water_Bond_Report_2019.pdf
Mens, M.J.P., van Rhee, G., Schasfoort, F., and Kielen, N. 2022. "Integrated drought risk assessment to support adaptive policymaking in the Netherlands." Natural Hazards and Earth System Sciences 22, no. 5: 1763-1776.
van Buuren, A. 2019. “The Dutch Delta Approach”. In Great Policy Successes. doi:10.1093/oso/9780198843719.003.0011.