Climate change impacts in the EU: new evidence from recent research

This short article offers a condensed view of the recent research on the economic costs of climate change for the EU, its countries, regions, and sectors. It emphasizes ranges of economic damages, the relative importance of the different climate impact categories, the differences across direct and indirect costs estimates and finally presents the economic role in damage determination of some non-immediately evident transmission mechanisms that are receiving increasing attention by research. It shows that macroeconomic losses in the EU can be larger than previously estimated. Extreme events, and climate change stress on EU infrastructural endowment, are among the most prominent drivers of GDP and direct economic losses. Health impacts on mortality and morbidity or on labour productivity associated to extreme heath are another concerning source of economic costs. Research also emphasizes the possible occurrence of socio-economic tipping points that can be widespread and may have disruptive social and economic effects although at the more local level. All this calls for an aggressive mitigation action supported by a widespread agreement in the literature that both average and spikes in local economic losses are greatly reduced in low emissions scenarios. The analyses also emphasize that the trends in economic losses magnify the dichotomy across northern and southern and across high and low-income EU regions with a particular vulnerability of EU island communities confirming, also in a rich area like the EU, the adverse distributional effects of climate change. Against this background, adaptation is a fundamental complement of mitigation. It demonstrates a high benefit to cost ratio and most importantly, due to climatic inertias, confirms the key role of climate impact contrast strategy in the first half of the century. Impacts on ecosystem and biodiversity, the distributional consequences of climate change, the connection between fiscal-financial stability and climatic impacts and the emergence of social economic tipping points deserve further investigation.