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Economic costs of heatwaves to increase five-fold by 2060

  • Economic costs of heatwaves to increase five-fold by 2060
  • Scientists calculate that heatwaves, due to their impact on human productivity, are causing significant damage to Europe’s economy. New estimates show that the negative impact is set to increase sharply in the next decades.

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European Commission
The European Commission is the EU's executive arm. It takes decisions on the Union's political and strategic direction.

The number of days with extreme heat doubled in Europe between 1960 and 2017.  Climate change projections estimate that heatwaves will become even more frequent and could last longer.

Heatwaves threaten human, animal and plant health, damage infrastructure and lower the productivity of workers. Excessively hot environments cause physiological strain, reduce the number of productive working hours, decrease the capacity of assimilating information and interfere with decision-making.

In a new study, scientists from the European Commission’s Joint Research Centre and other European research institutions estimate the GDP losses due to the negative effects of heatwaves on human productivity.

They calculate that heatwaves in recent, exceptionally hot years, such as 2003, 2010, 2015, and 2018 lead to a yearly loss of 0.3-0.5% of European gross domestic product (GDP).

This is already 1.5 to 2.5 times more than the average 0.2% GDP loss due to extreme heat in the years between 1981 and 2010.

The study projects that GDP losses will grow steadily over the next 40 years in Europe. It estimates that the costs of heatwaves will increase to an expected yearly average of 0.77% of GDP in 2035-2045, to around 0.96% in 2045-2055 and will go beyond 1.14% in the 2060s.

Southern Europe suffers the most severe impact

The study found that southern European countries would have the highest economic losses due to excessive heat. Cyprus will be the most affected, where yearly losses could amount to 3-3.5% of the country’s GDP by 2060.

Portugal, Spain, and Croatia will gradually move from a range of yearly losses of 2% in 2040 to around 3% in 2060. Romania, Italy, Greece and Bulgaria will also experience considerable increases in their expected impact.

Central European countries will experience lower but still significant negative impacts. The study projects that in Germany by 2050 heatwaves will on average cause a yearly loss of 0.5% of the country’s GDP.

In contrast, Scandinavian countries, the United Kingdom and Iceland will suffer smaller yearly losses of up to 0.2% of GDP, or no losses at all.

There are also large variations between regions within the same country. The maps below show the estimated economic costs of heatwaves as a share of regional GDP in the four extreme years (2003, 2010, 2015, and 2018), which the study analysed closer. Damages in these regions often surpass 1% of GDP, reaching nearly 2% in southernmost regions.

The most affected regions are those that have a hot climate and where outdoor sectors, such as for example construction, agriculture and tourism, make up a large share in the regional economy.

Cost of heatwaves, on the regional level, as a share of regional GDP in the four years analysed. ©David García-León, Nature Communications, CC BY 4.0.

Adapting the workplace to rising temperatures

This study can help policymakers draft policies that minimise the impact of rising temperatures on European workers, as highlighted in the EU’s new Climate Adaptation Strategy of February 2021. According to the scientists, in Europe there is big room for implementing adaptation measures at the workplace to counteract the effect of increased heat on workers.

These measures could include adapted uniforms, better insulation of buildings, green workplaces, tree coverage, automation, air conditioning and changing working patterns to help exposed workers avoid the hottest periods of the day.

Innovative technological solutions, such as wearable machines that protect from heat are among the adaptation responses of the future.

The interdisciplinary bottom-up methodology proposed in this study could also be shaped to assess several policy goals, including the implementation of adaptation policies.

Policymakers could use the this methodology to capture accurately the macroeconomic effects of alternative adaptation policies, while taking into account the existence of different regional climatic, socio-economic and demographic realities.

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