Dreams, fires, floods, storms: at this rate, climatic disasters could cost up to 5 % of GDP in the euro zone by 2030, alerts the ECB in a blog note published on Tuesday. Such shock would reduce the growth forecasts of the International Monetary Fund (IMF) for the economic region, which are used as a reference scenario, specifies the Frankfurt institution.
The European Commission already estimates that droughts in Europe lead to losses of 9 billion euros each year, that is, almost 5 % of the annual EU budget by 2024, and these losses should only increase in the near future.
To achieve this estimate, the ECB is based on several scenarios, from the worst to the most favorable, issued by the NGFS network, a coalition of more than 140 central and regulatory banks that work until ecological finances. These projections are not predictions in themselves: they imagine extreme shocks, which are supposed to occur statistically once every fifty years, to raise awareness among public and private decisions manufacturers of the potential economic impact of climate change.
The delay will cost more
More than long -term simulations only available before, by 2050, these new scenarios, limited to 2030, are aimed at shaking consciences now. And for a good reason: the worst scenario: “Disasters and political stagnation” baptized (disasters and political inertia) – accumulates waves of extreme heat, droughts and fires of 2026, then flood and storm the following year. The key: a fall in productivity due to heat, the mass destruction of the infrastructure: factories, roads, bridges, etc., increased inflation and a higher credit cost for the most exposed sectors.
On the contrary, an optimistic scenario (baptized “the road to Paris”) is a rapid and coordinated transition to carbon neutrality, in line with the 2015 Paris Agreement. Thanks to massive investments in green technologies, growth could even be slightly dumb and inflation contained ECB estimates. On the contrary, delaying the three -year transition would cause production losses in the euro zone and an increase in inflationary pressures. Clearly, the delay and postpone the implementation of the Green Pact will cost more depending on the ECB forecasts.
Created in 2017 after COP21, the NGFS brings the ECB, the Bank of England or the Bank of Japan around an objective: integrate climatic risks into financial regulation. The new data should now feed future climate resistance tests operated by the ECB with the largest banks.
Source: BFM TV
