Climate shocks could cost eurozone 5 percent of GDP
FRANKFURT
Climate disasters such as droughts, wildfires, floods and storms could slash up to 5 percent off the eurozone's GDP by 2030, economists warned in an ECB blog post.
Under a severe scenario, the 20-member eurozone would suffer an economic hit not only from a series of natural hazards at home but also those abroad that would hit its supply chains.
The total shock could be "a downturn similar in magnitude to the economic impact of the Global Financial Crisis," the blog post said, warning that climate change was no longer a theoretical risk but "an imminent danger."
The scenario is not billed as a forecast but a plausible warning of what could happen within the next 5 years, with the modelling including weather events that could be expected once every 50 years.
Under the most severe scenario, dubbed "Disasters and Policy Stagnation," Europe would face back-to-back waves of extreme heat, droughts and wildfires starting in 2026, as well as destructive floods and storms.
Supply chain disruptions could boost inflation and crimp growth, the blog post said, while extreme heat and disasters could directly impact workers, property and infrastructure.
Western Europe had its hottest June on record last month, causing reduced hours for schools and workplaces as well as increased breaks to cool off and deal with the heat.
