Europe To Incur Huge Financial Loss Due To Climate Change

The impact of climate change could cost Europe a huge financial burden if no further measures are put in place to mitigate the situation, according to a new study released by the European Commission’s in-house science service, the Joint Research Centre.

The study reveals that if pragmatic measures are not taken to address the effects of climate change, the damages as a result of climate change stands to cost the continent at least€190 billion, provided temperature levels rises by 3.5 degree Celsius.

The amount will translate into a net welfare loss of 1.8% of Europe current gross domestic product, the study says, which was launched during the EuroScience Open Forum (ESOF2014), held in Copenhagen, Denmark from June, 21-26, 2014.

‘As a consequence, heat-related deaths could reach about 200 000, the cost of river flood damages could exceed €10 billion and 8000 km2 of forest could burn in southern Europe,” the study emphasised.

The number of people affected by droughts could increase by a factor of seven and coastal damage, due to sea-level rise, could more than triple.

The scientists analysed the impacts of climate change in 9 different sectors: agriculture, river floods, coasts, tourism, energy, droughts, forest fires, transport infrastructure and human health.

Juan Carlos Ciscar, one of the study authors says, the study considered the direct effects of the impacts in specific sectors of the economy (e.g. agriculture), and the induced or indirect effects in the rest of the sectors of the economy (e.g. indirectly in the agrofood sector).

To measure the impact in an efficient and effective manner, the scientists divided the European Union is divided into five regions, namely southern Europe, central Europe, northern Europe, UK and Ireland region and central Europe north.

The study identifies southern Europe and central Europe south would bear most of the burden, whereas the northern Europe region would experience the lowest welfare losses, followed by the UK and Ireland regionand central Europe North.

However, the report also shows that welfare impacts in one region would have transboundary effects elsewhere.

‘For example, the welfare loss due to sea level rise in the central Europe North region or to the agricultural losses in southern Europe would have a spill over effect on the whole Europe due to economic interlinkages,” the study indicated.

Connie Hedegaard, European Commissioner for Climate Action said: “No action is clearly the most expensive solution of all. Why pay for the damages when we can invest in reducing our climate impacts and becoming a competitive low-carbon economy? Taking action and taking a decision on the 2030 climate and energy framework in October, will bring us just there and make Europe ready for the fight against climate change.

The study also reveals that in situations where strong greenhouse gas reduction policies are implemented and temperature rise is kept below two degrees Celsius the impacts of climate change would reduce by €60 billion, a 30% decrease.

In addition, some significant biophysical impacts would be substantially reduced: the increased burned area would halve and 23 000 annual heat-related deaths would be spared.

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