Climate change impacts and vulnerability in Europe 2016

Climate change impacts on society
5.1.3 Economic losses from climate-related extremes
Key messages
• The total reported economic losses caused by climate-related extremes in the EEA member countries over the period
1980–2013 were almost EUR 400 billion (2013 value). The average damage has varied between EUR 7.6 billion per year in
the 1980s and EUR 13.7 billion in the 2000s.
• The observed changes in reported losses over time are difficult to interpret, as a large proportion of the total deflated
losses has been caused by a small number of events. Specifically, more than 70 % of the damage was caused by only 3 %
of all registered events.
Relevance
Economic losses from extreme climate events have
increased, but with large spatial and interannual
variability. Reported disaster losses often reflect
only structural damages to tangible physical assets,
neglecting the impacts on health, integrity of
ecosystems and intangible cultural heritage. Hence,
the reported economic losses focus on direct losses
and should therefore be understood as lower-bound
estimates. The changes in recorded losses are, to a
large extent, influenced by increased economic wealth.
Determining the effect of ongoing climate change in the
pattern of loss data remains elusive.
Past trends
According to the data from NatCatSERVICE (Munich
RE), climate extremes accounted for 82 % of the total
reported losses in the EEA member countries ( 78 )
over the period 1980–2013, whereas geophysical
events such as earthquakes and volcano eruptions
are responsible for the remaining 18 %. The main
hazards underlying economic losses and fatalities
differ substantially from each other. In particular,
heat waves represented only 1 % of all hazards and
caused only 5 % of the reported losses, but they
were responsible for 67 % of all fatalities (Figure 5.3).
Further information on fatalities and other health
effects from climate‐related extremes is presented in
Section 5.2.
Recorded losses from climate extremes in Europe
amounted to EUR 393 billion (2013 value) ( 79 ), on
average EUR 11.6 billion per year, EUR 69 000 per
square kilometre or EUR 710 per capita (based on the
average population over the entire period 1980–2013).
The loss is equal to 0.1 % of cumulative deflated GDP
over the analysed period. Around 33 % of the total
losses were insured. The distribution of losses caused
by climate extremes among the 33 EEA member
countries is uneven. The highest losses in absolute
terms were registered in the large countries Germany,
Italy and France, in rank order. The highest losses
per capita were recorded in Switzerland, Denmark
and Luxembourg, in rank order; the highest losses
expressed as a fraction of GDP over the period were
registered in the Czech Republic, Croatia and Hungary,
in rank order (see Table 5.1).
Losses from natural hazards in Europe have
varied substantially over time. The average annual
(inflation‐corrected) losses from climate extremes
have increased from EUR 7.6 billion in the 1980s to
EUR 13 billion in the 1990s and EUR 13.7 billion in
the 2000s (see Figure 5.4, which also includes losses
from geophysical events for comparison). The changes
over time that can be seen in the recorded losses
are obfuscated by high variability and are strongly
determined by a few exceptionally large events.
Around 3 % of events, some of which affected more
than one country, account for around 70 % of total
inflation-adjusted losses. The most costly climate
extremes were the 2002 flood in central Europe
(EUR 20 billion), followed by the 2003 drought and
heat wave (EUR 16 billion) and the 1999 winter
storm 'Lothar' (EUR 14 billion). By contrast, some
three‐quarters of the registered events caused only
half a percentage point of the total losses.
One important issue is the extent to which the observed
increase in overall losses during recent decades is
( 78 ) http://www.eea.europa.eu/about-us/countries-and-eionet.
( 79 ) The exact estimate differs by several percentage points depending on the choices made, including the price indices chosen for accounting for
inflation, the reference base (annual, monthly) for the conversion between losses expressed in US dollars and euros, etc.
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