The economic cost of climate change in 4 numbers

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.

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.

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.

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.

References

[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