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Climate change threatens Europe's living standards

January 31, 2011 By Nicola Jones This article courtesy of Nature News.

Southern Europe could face tens of billions in losses, but northern Europe may benefit.

Just a few key aspects of climate change could wipe out up to half of the annual gain in the standard of living for the average European household by 2080.

The European Union has seen economic welfare — a measure of prosperity — grow by an average of around 2% each year. But the climate of the 2080s is likely to cut that by at least 0.2-1 percentage points, according to a study in Proceedings of the National Academy of Sciences, which looked at just five impacts of climate change1. "On average, that might not impact individuals much. But in aggregate it's not trivial," says Alistair Hunt, an economist at the University of Bath, UK, and a co-author on the paper.

The report is one of the first to use models that can distinguish differences in climate at the city-scale and to count up the costs of specific climate impacts such as flooding. Most previous studies have used global models to estimate the costs of climate change.

"These are certainly the kinds of studies we want," says Tim Wheeler of the University of Reading, UK, who studies the impact of climate change on agriculture but was not involved with the work. Such reports are important for helping policy-makers to take action on a country-by-country basis, he says.

Juan-Carlos Ciscar of the European Commission's Joint Research Centre in Seville, Spain, and his colleagues considered two models of the climate, along with two scenarios of low and high carbon dioxide emissions, which together predict temperature increases of between 2.5 ºC and 5.4 ºC between 1970 and 2080. Dividing Europe into five regions, they tallied for each region how this climate regime would affect today's economy in five areas — agriculture, human health, coastal flooding, river flooding and tourism.

They conclude that these factors would cut €20 billion to €65 billion (US$27 billion to $89 billion) from today's annual European gross domestic product of roughly €13 trillion. Some cuts to welfare might actually increase GDP, they note. People may, for example, need to buy air conditioners or other equipment to deal with the warmer conditions.

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Such studies are riddled with assumptions. For example, the team assumed that no new dykes would be built to prevent flooding, and that the destinations tourists choose are based on the weather. Such assumptions aren't realistic, but they make it possible to come up with figures. "It begins to define the boundaries of the scale of the problem," says Hunt. The assessment ignores possible catastrophic changes, such as a shut-down in ocean currents that might dramatically cool northern Europe, and a range of other factors that would have economic impacts — such as forestry and biodiversity loss.

In the areas that they did consider, the group found that northern Europe would fare best: it might see a 52% boost in agriculture because of the warmer weather; thousands of people might be spared river floods as a result of reduced spring snow melt; and 25% more tourists might flock to its shores. Throughout Europe, the expected decrease in deaths thanks to warmer winters could outweigh the increase from summer heatwaves, the group concludes.

But other regions face difficulties. The models predict a decline of up to 27% in agriculture for southern Europe, along with a 4% drop in tourists staying overnight. And all areas would see vast increases in the number of people affected by coastal flooding.

The errors on such estimates are huge. "In some sectors it's an order of magnitude or even two orders of magnitude," admits Hunt.

Nonetheless, European governments are already preparing for the possible changes. On 28 January, for example, Britain's Department for Environment, Food and Rural Affairs published the first batch of plans from the agencies responsible for national infrastructure, setting out the potential risks associated with climate change, and possible solutions. These range from adopting the same building standards for roads as those for the south of France, to relocating fish to cooler lakes farther north.

Because of the large uncertainties in the estimated impact of climate change, some researchers prefer to avoid putting dollar figures on climate-change costs at all. Others say it is the best way to advance policy discussions.

The United Kingdom's Stern Review on the Economics of Climate Change concluded that climate change might wipe 5-20% off global GDP by the beginning of the next century. Those numbers are impossible to compare to the new report, which considers just four economic impacts of climate change, and looks at Europe alone. Wheeler says that, in general, the new numbers seem reasonable if on the high side. He adds that the costs of dealing with the environmental and human problems already facing the world could swamp the additional costs of future climate change — the cost of achieving the United Nations Millennium Development Goals, for example, might be on the order of $200 billion a year.


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