Europe’s bill for extreme weather damage more than doubles this decade
Average economic losses associated with weather including intense floods have soared, according to European agency
Extreme weather and climate change caused more financial damage in Europe between 2020 and 2023 than it did in the whole preceding decade, according to a major survey underlining the impact of increasing ecosystem degradation and water scarcity on businesses.
The average annual economic losses in the EU associated with increasingly intense heat, floods and other extreme weather amounted to €44.5bn between 2020 and 2023, two and a half times as high as between 2010 and 2019, the European Environment Agency (EEA) said in a report on Monday.
Almost three-quarters of companies producing goods and services in the Eurozone are “highly dependent” on at least one natural ecosystem, the report said. It noted that 75 per cent of bank loans are granted to companies that rely on natural resources for their business and almost 15 per cent of industrial assets are on floodplains.
“Nature is really facing degradation, over exploitation and biodiversity loss and of course at the same time we see the accelerating climate change,’’ Leena Ylä-Mononen, executive director of the EEA, told the Financial Times. ‘‘This is posing major risks to Europe’s competitiveness, long term prosperity, security and quality of life.’’
Europe is the fastest-warming continent on Earth, with higher temperatures leading to much more volatile weather patterns and an increase in forest fires and floods.
The EEA survey comes as EU governments debate a legally binding target to reduce greenhouse gas emissions by 90 per cent by 2040, compared with 1990 levels. Countries including France and Poland have requested that leaders discuss the target in October, arguing that the pace of the transition will impact their already struggling economies.
To ease the burden, the European Commission has suggested that about 3 per cent of emissions reductions could be accounted for by buying international carbon credits, against the advice of the EU’s scientific advisory board.
This month, the EU missed a deadline to provide an emissions reduction target for 2035 to the UN ahead of its climate conference, which this year will be held in Brazil. Instead it sent a promissory note saying that it would submit a target between 66.25 and 72.5 per cent. This has prompted campaigners to argue that the EU is losing a grip on its role as an international leader on climate action.
“It doesn’t give the right signal,” Ylä-Mononen said.
The environment agency chief highlighted that the EU’s climate targets were at risk not just from political forces. The EU’s natural carbon sinks — such as forests and peatlands — have declined by about 30 per cent in the past decade, the report said, meaning that they no longer absorb as much carbon.
The EEA said that water stress — demand outstripping supply — was affecting around a third of Europe’s population. Agriculture was “responsible for the most significant pressure on both surface and groundwater”, the report said.