The Earth's climate is rapidly changing, and its consequences are becoming increasingly visible across the globe. As extreme weather events intensify and temperatures continue to rise, the economic toll of climate change becomes a pressing concern for nations and industries alike. In this blog post, senior researcher Kirsten Vanderplanken delves into four critical numbers that highlight the economic impact of climate change, shedding light on the staggering costs that nations and businesses must grapple with, even if ambitious adaptation measures are taken.
€2.2 trillion - estimated global cost from lost work time due to heat in 2030
The predicted global costs from lost work time due to occupational heat stress is predicted to add up to €2.2 trillion (>1% of GDP) in 2030. Losses are highest for outdoor and manufacturing industries, medium-sized businesses, male workers and workers aged 25-44 years old. By 2100, global economic losses are estimated to add up to 1,8% GDP. In Europe specifically, under a scenario where ambitious adaptation actions are taken, reductions in GDP will remain around 0,3-0,5%. Contrarily, when no actions are taken impacts may increase to 1-1,5%. During the record-breaking heatwaves in 2003, 2010 and 2015, average direct economic losses in agriculture were estimated at €53-81 per worker, and in construction €37-62 per worker.
1,6% - decrease in labor productivity by 2080 in Europe due to heat
Compared to current temperatures, labor exposure to heat stress is predicted to trigger a 1,6% decrease in productivity in Europe by 2080, in a 3°C warming scenario. Workers operating under heat stress reduce their work intensity, take longer breaks and suffer from fatigue. Moreover, heat exposure can cause impaired decision-making and physical health impacts (e.g. heat stroke, exhaustion) that increase the risk of mistakes and occupational injuries.
€57 billion - climate-related economic losses in EU in 2021
In 2021, the total climate-related economic losses in Europe amounted to €56.512 million. This is the highest loss ever recorded, more than 4,5 times as much as in 2020 (€12.458 million) and almost the double amount of the previous record in 2017 (€28.406 million). The top three of European countries affected were Germany (€34.707 million), Belgium (€9.964 million) and France (€5.703 million). These losses resulted from the extreme rain and flooding event in Germany, Belgium and the Netherlands in July 2021 ; and the record-breaking heatwaves (63 hot days recorded) with accompanying droughts.
€65 billion/year – annual drought losses in EU and UK
In the absence of climate action (4°C in 2100) and appropriate adaptive actions (e.g. drought management), annual drought losses will amount to €65.479 million each year in the EU and UK. In Belgium specifically, the losses will amount to €4.144 million annually under the same conditions. Adaptive actions can limit annual losses in Belgium to €2.220 million per year. Current EU + UK annual costs are estimated at €9 billion, though last years’ drought in Europe is estimated to have costed around €18 billion. The increase in losses will be largest in southern and western parts of Europe, including Belgium, and will affect various sectors including agriculture, shipping and power supply.
Referenties
[1] Source: estimates by the European Environmental Agency, republished by Eurostat. Online available at Statistics for the European Green Deal (europa.eu)
[2] Lehmkuhl et al. (2022) Assessment of the 2021 summer flood in Central Europe. Environmental Sciences Europe, Vol. 34:107
[3] Lhotka O. & Kyselý J. (2022) The 2021 European Heat Wave in the Context of Past Major Heat Waves. Earth and Space Science, Vol. 9:11
[4] Naumann et al. (2021) Increased economic drought impacts in Europe with anthropogenic warming. Nature Climate Change, Vol. 11:6
[5] Borg et al. (2021) Occupational heat stress and economic burden: A review of global evidence. Environmental Research, Vol. 195:110781
[6] Orlov et al. (2019) Economic Losses of Heat-Induced Reductions in Outdoor Worker Productivity: a Case Study of Europe. Economics of Disasters and Climate Change, Vol. 3
[7] García-León et al. (2021) Current and projected regional economic impacts of heatwaves in Europe. Nature Communications, Vol. 12:5807
