Extreme summer, 43 billion euros in damage in Europe - Costs expected to reach 126 billion euros in 2029
The extreme weather that hit Europe this summer caused short-term economic losses of at least €43 billion, with the cost projected to reach €126 billion by 2029.
The harsh summer with droughts and floods cost the EU economy 0.26% of annual output in 2024. The biggest losses were recorded in Cyprus, Greece, Malta and Bulgaria, each of which suffered short-term losses of over 1% of gross value added for 2024, an indicator similar to GDP. They are followed by other Mediterranean countries such as Spain, Italy and Portugal.
Economists from the University of Mannheim and the European Central Bank described the analysis as "conservative" as it does not include the record fires that swept through southern Europe last month, or the combined impacts of extreme weather events occurring simultaneously.
Scientists are trying to assess the extent to which global warming has worsened extreme weather this summer, with studies suggesting that climate change has made heatwaves and wildfires 40 times more likely in Spain and Portugal, and 10 times more likely in Greece and Turkey. Deaths from the June heatwave are estimated to have tripled in 12 major cities, due to pollution warming the planet.
While most research on the economic costs of the climate crisis focuses on direct impacts like property damage or insured losses, the authors of the new study used historical links between extreme weather and economic output to account for knock-on effects. They considered factors like limited working hours for construction workers during heat waves or travel disruptions after rail lines are damaged by floods.
Climate economists at the World Bank confirm that the broader economic impacts of extreme weather are larger than the direct effects and last longer than commonly thought. They caution that the study uses imprecise metrics to identify extreme weather, which could lead to an underestimation of the true costs.
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