“These estimates are probably conservative,” stated the authors of the research, Sehrish Usman of the University of Mannheim, and Miles Parker and Mathilde Vallat, economists on the European Central Bank.
Extreme climate occasions have gotten extra frequent as greenhouse gases heat the world.
In 2024, pure disasters, together with catastrophic flooding in Spain, destroyed belongings price $31 billion in Europe, in keeping with the insurance coverage firm MunichRe.
“Climate change has elevated the frequency and depth of utmost climate occasions like floods, droughts, warmth waves, wildfires, and all of that is contributing to the rising financial price for the European areas,” Usman stated at an occasion in Brussels on Monday.
The research included bodily harm to buildings and infrastructure in addition to impression on employee productiveness and effectivity, and spillover results on different elements of the financial system. It didn’t embody harm from wildfires that burned greater than 1 million hectares in Europe this 12 months.
“These occasions usually are not simply short-term shocks,” stated Usman. “They manifest their impacts over time.” Floods can disrupt provide chains. Droughts can cripple agricultural yields.
