Assessing the economic impact of global warming
If the climate expected in the 2080s occurred today, the EU would face yearly GDP losses between €20 and €65 billion, depending on the temperature increase in Europe (2.5°C to 5.4°C). This is one of the forecasts of the final report of the PESETA study, published today by the JRC Institute for Prospective Technological Studies (IPTS). The PESETA study also looked at different regional impacts of climate change across the EU. Damages would occur mainly in Southern and Central Europe, while Northern Europe would be the sole region to benefit, in economic terms and for the aspects studied, from climate change.
The final report of the PESETA project (Projection of economic impacts of climate change in sectors of the European Union based on bottom-up analysis), assesses the annual economic impact of climate change in Europe with regard to agriculture, river flooding, coastal systems and tourism without considering adaptation policies.
The overall cost of global warming could be, however, much higher, as the study only focuses on four sectors of the economy and does not take into account non-market impacts in fields such as biodiversity and ecosystems or natural disasters. PESETA delivers a first approximation to the estimation of climate change damages, subject to many uncertainties in future climate characteristics and future economic structure.