Extreme weather events that battered Europe this summer caused at least €43bn in immediate economic losses, according to an EU-wide study. As climate breakdown accelerates, the economic toll of heatwaves, droughts, and floods is expected to skyrocket, with long-term costs projected to reach €126bn by 2029.
What Happened
The summer of 2024 marked a brutal chapter for Europe, as extreme weather events, including intense heat, drought, and flooding, led to a significant economic hit. A new study estimates that these weather events resulted in short-term losses of €43bn, or 0.26% of the EU’s projected GDP for 2024. The damages were particularly severe in Mediterranean countries, with Cyprus, Greece, Malta, and Bulgaria suffering the greatest losses—exceeding 1% of their national economic output. Spain, Italy, and Portugal also faced considerable impacts.
The analysis, conducted by economists from the University of Mannheim and the European Central Bank, highlights the escalating financial risks posed by extreme weather, particularly in the context of climate change. The study’s authors acknowledge that their estimates are conservative, not accounting for the devastating wildfires that ravaged southern Europe or the cumulative effects of multiple concurrent disasters.
Who Was Behind These Shifts
The research was led by Sehrish Usman, an economist at the University of Mannheim, who emphasized the need for accurate and timely data to support policymakers. “The true costs of extreme weather surface slowly because these events affect lives and livelihoods through a wide range of channels,” Usman explained. The study’s findings were based on historical data that links weather patterns to economic outcomes, offering insights into how weather disruptions—from heatwaves to flooding—reduce working hours, increase transportation costs, and disrupt supply chains.
The study’s impact extends beyond academia, with the World Bank’s chief climate economist, Stéphane Hallegatte, praising the broader approach to measuring economic costs. Hallegatte has long advocated for a shift from focusing only on direct disaster damages to considering the longer-term, often invisible, effects of extreme weather on economies and societies.
Career/Legacy of the Study’s Findings
The study is part of a growing body of work that challenges traditional economic assessments of climate-related disasters. Rather than just measuring the direct destruction of property or infrastructure, Usman and her team looked at the broader ripple effects on national economies. These include the loss of productivity during heatwaves, disrupted commute times, and challenges to businesses that depend on uninterrupted supply chains.
The research highlights the indirect costs of extreme weather that often go unaccounted for. Gert Bijnens, an economist at the National Bank of Belgium, pointed out that disruptions to supply chains, which were not directly measured in the study, could significantly underestimate the true economic damage. Bijnens’ research on the 2021 Belgian floods found that even manufacturers far from the disaster zone suffered due to the disruption of their supply chains.
The growing body of evidence points to an undeniable truth: extreme weather, driven by climate change, is already leaving a significant and expanding economic footprint, with indirect effects as damaging as the physical destruction caused by these events.
Public/Social Media Reactions
The study has sparked a broader conversation on social media and among climate advocates about the economic realities of climate change. While some have praised the research for its comprehensive approach to measuring economic loss, others have raised concerns about the uncertainty of such estimates, especially when considering the compounding effects of multiple disasters or the specific challenges faced by poorer communities.
Environmental organizations and economists have called for greater investment in climate resilience and adaptation strategies, noting that without these, the cost of climate change will continue to escalate in both visible and invisible ways. As countries begin to understand the true cost of extreme weather, there are increasing calls for stronger policies to mitigate its impact.
Official Statements or What Happens Next
The findings of the study underscore the urgent need for policy shifts to address the economic consequences of extreme weather. European policymakers are now faced with the challenge of not only reducing emissions but also investing in resilience and adaptation measures to protect vulnerable regions and sectors.
Experts like Hallegatte warn that the true costs of climate change are likely to be much higher than currently accounted for, especially as extreme weather events become more frequent and severe. For countries like those in Southern Europe, which are already dealing with record heat and droughts, the ongoing financial toll could soon become unsustainable.
Looking ahead, the challenge for EU leaders will be balancing immediate economic recovery with long-term strategies for mitigating climate change, ensuring that the rising costs do not further undermine economic stability.
Closing Line
This story may be updated with more information as it becomes available.
