Losses from climate change in the EU: €145 billion in a decade

If you live in Europe, and think it’s hotter now than when you were younger, you’re right.

Temperatures in the region have increased at more than twice the global average over the past 30 years – higher than any other continent, according to the World Meteorological Organization. It says that between 1991 and 2021, temperatures rose at an average rate of about +0.5°C per decade. Alpine glaciers lost 30 metres in ice thickness from 1997 to 2021.

Counting the cost of climate change

This news comes as data is released on the economic damage caused by climate-related events in the bloc’s 27 member countries. Heatwaves, floods and storms are estimated to have caused €145 billion in economic losses in the EU in the last decade, according to Eurostat.

The 30-year moving average of climate-related economic losses has increased by almost 2% a year over the same time period, the European Commission’s statistical office says. This shows a clear trend as outlined in the estimates from the European Environmental Agency (EEA) shown below.

The highest total losses between 2010 and 2020 were in 2017, amounting to almost €27.9 billion. The European Commission says this because of severe heat waves that caused wildfires that year.

In 2020, Greece recorded the highest climate-related losses of any country in the bloc at €91 per inhabitant. This was more than three times higher than the EU average of €27. The lowest losses during this period were registered in Bulgaria at €0.70 per inhabitant.

EEA data released at the beginning of 2022 estimated that between 1980 and 2020 economic losses caused by climate-related extreme events totalled €487 billion.

Germany lost almost €108 billion, France nearly €99 billion and Italy just over €90 billion. The EEA says weather and climate-related extremes made up around 80% of the total economic losses caused by ‘natural hazards’ in the 27-member bloc.

Building a green future

The EU plans to become the world’s first carbon-neutral bloc by 2050. Its Green Deal pledges a spend of one trillion euros in ‘sustainable investments’ by 2030 as well as a series of actions for sectors including construction, biodiversity, energy, transport and food production.

Its adaptation strategy also sets out a “long-term vision for the EU to become a climate-resilient society, fully adapted to the unavoidable impacts of climate change by 2050”. It has four main objectives: to make adaptation smarter, faster, more systematic and to support international action for climate resilience.

The EU says its Emissions Trading System is the cornerstone of its efforts to reduce greenhouse gas emissions. Originally set up in 2005 it is the world’s first major carbon market and remains the biggest

Greenhouse gas emissions in the bloc fell by 32% between 1990 and 2020. Eurostat says this trend is largely to do with improvements in energy efficiency and more use of renewable power.

Climate change will harm global economic growth

The global economy could lose up to 18% of GDP by 2050 if no action is taken to mitigate the impacts of climate change, the Swiss Re Institute warns. The insurer estimates this figure will drop to between 11 and 14% if some action is taken, and could be as low as 4% if the 2015 Paris Agreement targets are met.

Europe currently stands to lose around 11% of its GDP and the US almost 10%, the company’s 2021 report suggests. However, Asian economies would be hardest hit, with China at risk of losing almost 24% of its GDP under the most severe scenario.

“Our analysis shows the benefit of investing in a net-zero economy”, said Jérôme Haegeli, Swiss Re’s Group Chief Economist. “For example, adding just 10% to the $6.3 trillion of annual global infrastructure investments would limit the average temperature increase to below 2°C. This is just a fraction of the loss in global GDP that we face if we don’t take appropriate action.”