Extreme heat could cost Europe €800 billion, analysis shows

Extreme heat, emerging as a major threat to Europe's economy, could cost the continent €800 billion by 2030, with France, Germany and Italy expected to be the hardest hit as rising temperatures disrupt key industries and strain public finances, according to an analysis by Allianz SE.

The analysis indicated that France alone accounts for around €211 billion in output at risk, Caliber.Az reports, citing Euobserver.

The insurer's heat-impact simulation, which assessed more than 40 countries based on the estimated cost of heatwaves between 2014 and 2024, found that Italy, Germany and Spain would also suffer substantial economic losses. The report warned that France, Italy and Spain are among the economies least able to absorb the resulting fiscal impact.

Speaking to EUobserver, Hans Martin Füssel, a climate adaptation expert at the European Environment Agency (EEA), said excessive heat poses a growing threat to both public health and economic stability.

"Excessive heat is a major risk for health and the economy in Europe, and it has significant macroeconomic and even fiscal implications," Füssel noted.

The warning comes as wildfires continue to ravage parts of France and Spain, burning more than 42,000 and 80,000 hectares respectively and forcing more than 300,000 people to evacuate, according to AFP.

Europe's latest heatwave has pushed temperatures above 40°C in several countries, while overstretched healthcare systems have contributed to thousands of excess deaths across the continent.

Agriculture and construction were identified as the sectors most vulnerable to heat, as temperatures above 30°C significantly reduce labour productivity and damage crops.

"Compared with storms or floods, extreme heat less often shows up as direct damage," the Allianz reported.

The report also highlighted the growing risks facing Mediterranean agriculture. Italian agro-climatologist Marco Moriondo warned that even a single day of extreme heat during flowering can destroy an entire harvest.

A separate study found that olive oil production on the Iberian Peninsula could decline by up to 28%, posing a major threat to Spain, which produces more than half of the world's olive oil.

The EEA cautioned against drawing definitive conclusions about which countries are most affected, noting that results depend on the methodology used.

"As the EEA, we would not officially endorse that Germany or France is the 'most' affected country," Füssel stressed.

Arianna Giannetti, a climate expert at the EEA, made it clear that the growing evidence shows extreme heat is no longer solely a public health issue.

"Extreme heat and heatwaves are structural hazards that pose risks across multiple sectors and the wider economy," she added.

By Bakhtiyar Abbasov