Climate change threatens to cut Eurozone GDP by 5%

Economists have issued a dire warning that climate disasters such as droughts, wildfires, floods and storms could shave 5% off the Eurozone's Gross Domestic Product (GDP) by 2030.

The warning, published on the European Central Bank (ECB) blog, stressed that climate change is no longer a potential risk but an “imminent danger.”

In the severe scenario, the 20 Eurozone member states would suffer significant economic damage, not only from domestic natural hazards but also from external disasters that would directly affect the region's supply chains.

People shop at a supermarket in Berlin, Germany.

The ECB blog post said the shock could trigger a "recession on a scale similar to the impact of the global financial crisis."

Disrupted supply chains can push up inflation and stifle growth, while extreme heat and disasters directly impact workers, property and infrastructure.

The warning figure was calculated based on a model by the Network for Greening the Financial System (NFGS), a global alliance of more than 140 central banks and financial regulators.

Notably, this scenario is not a forecast, but rather a reasonable warning of what could happen over the next five years, including weather patterns that only occur once every 50 years.

Under the most severe scenario, called “Disaster and Policy Stagnation,” Europe would face a succession of extreme heat waves, droughts and wildfires starting in 2026, along with damaging floods and storms.

In contrast, a more optimistic roadmap called the “Road to Paris,” a reference to the Paris Agreement on climate change, suggests that Europe can absorb the costs of the transition and maintain growth without suffering.

Reality has also proven the seriousness of the problem when Western Europe experienced the third hottest June in the last three years./.

vietnamplus.vn

Source: https://baolaocai.vn/bien-doi-khi-hau-de-doa-cat-giam-5-gdp-cua-eurozone-post648348.html