Triodos Bank estimates damage caused by heat wave at 180 billion euros

The heat wave that struck Europe this summer is leading to both an increase in mortality and economic losses, as revealed in a Triodos Bank report titled “The Economics of Heat.”

“This summer shows that climate change is not a distant economic risk. The extreme heatwave we are all experiencing today is a concrete illustration of how climate change will affect lives, workers, and prosperity across Europe,” said Hans Stegeman, chief economist at Triodos Bank, in a press release published on the bank’s website.

“For this year, a 1% loss in GDP would mean stagnation. That’s a real setback, but not a catastrophe. However, this year’s extreme heatwave is just a taste of what lies ahead if we do not act quickly and decisively to address climate change. This means we must change our lifestyles and transform our economies to reduce our consumption of energy and raw materials.”

Heavy toll on people and nature

In a single week in June, it is estimated that more than 20,400 people died as a result of the heat wave in countries such as France, Italy, Spain, and Germany. In addition, issues such as suicide, domestic violence, and health problems are also on the rise, particularly in vulnerable and poorer regions. Older adults are the hardest hit.

The heat wave is also causing significant damage to nature and the economy. Wildfires have already ravaged more than 430,000 hectares of land, mainly in Southern Europe, with serious consequences for ecosystems and wildlife. Economic losses amount to billions of euros.

In addition, agricultural production and livestock farming are declining, food and energy prices are rising, and road and river transport are being disrupted by drought and low water levels. Labor productivity also declines when temperatures exceed 25 to 30 degrees, and absenteeism due to illness increases.

Economic losses amount to tens of billions

In total, Triodos Bank estimates the economic losses at approximately 180 billion euros, or nearly 1% of European GDP. This almost entirely offsets expected growth. France is the hardest hit, but the Netherlands is also seeing its growth decline.

According to Triodos, adaptation alone is not enough; we must take structural action to reduce greenhouse gas emissions in order to limit future damage.

"A summer this hot, this visible, and this costly should have marked the end of all abstraction. Instead of modeling what climate damage might mean in the distant future, we are seeing vast areas burn before our eyes while power plants are shut down due to a lack of water,” the report states.“This should be the kind of shock that spurs people—and the institutions that represent them—to act. That is not yet the case.”