Improving climate resilience in agriculture, energy, and transport could prevent billions in losses from extreme weather events due to climate change, while enhancing Europe’s competitiveness, as outlined in a briefing by the European Environment Agency (EEA).
The sectors of agriculture, energy, and transport are particularly vulnerable to climate impacts, according to the EEA report “Making agriculture, energy, and transport climate resilient: how much money is required and what will it deliver?”.
Europe, as the fastest-warming continent, faces increasing extreme weather events like floods, droughts, heatwaves, and wildfires, which cost Europe EUR 40-50 billion annually.
The required investment ranges from EUR 53 to 137 billion annually by 2050 and EUR 59 to 173 billion annually by 2100, depending on temperature increases of 1.5°C to 2°C or 3°C above pre-industrial levels. Current funding commitments are EUR 15-16 billion per year, mostly from public sources at EU, national, and regional levels.
Between 2021 and 2024, the EU faced annual economic losses of EUR 40-50 billion due to extreme weather, totaling EUR 822 billion from 1980 to 2024. These figures account for direct losses, indicating that total costs are higher.
Investments in climate adaptation not only prevent losses but also have additional benefits. For instance, adapting to coastal flood risks in the EU returns EUR 6 for every euro invested, as per the Joint Research Centre of the European Commission. A global study by the World Resources Institute suggests that each US dollar in adaptation can yield over USD 10.50 in benefits over 10 years with an average return of 27% per project.
The benefits of climate adaptation encompass two major concepts:
- Double Dividend: Reducing climate risks protects against damage and also contributes to greenhouse gas reductions or sustainability, such as wetlands restoration that both mitigates floods and stores CO2.
- Triple Dividend: Beyond loss prevention, it unlocks economic potential and generates development co-benefits.
The evidence is clear: investing in climate resilience for agriculture, energy, and transport bolsters Europe’s competitiveness and addresses other challenges like food security.
This briefing is a part of ongoing EEA products examining the costs and benefits of climate adaptation, offering insights into the economics of climate resilience.
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