Global
A new analysis released by Triodos Bank reveals that summer heatwaves could cost the European Union economy €180 billion this year. This figure equates to approximately 1% of the EU's Gross Domestic Product and matches the total growth projected for the Union by 2026. The findings did not indicate that hotter countries are necessarily the biggest losers; despite Spain and Italy experiencing more hot days, decades of adaptation have reduced the marginal impact of a single hot day. France is expected to lose 1.4 percentage points from its growth, potentially pushing its economy into a 0.6% contraction. Meanwhile, a 0.8 percentage point drop could nearly eradicate the projected growth for the Netherlands. The largest impact is anticipated to stem from reduced labor productivity due to intense heat. Triodos Bank estimates that this factor alone could shrink the EU's GDP by about 0.6%, while agricultural output might decline by 3% to 7%. Regarding the total losses of €180 billion, the bank stated that this figure "may seem modest at first glance, but it represents the European Union's projected economic growth for this year." France and the United Kingdom are bracing for their fifth heatwave this season, with temperatures in southeastern France nearing 40 degrees Celsius and expected to reach 36 degrees in Britain. Economic losses extend beyond GDP figures, as excess deaths were estimated at over 14,000 cases in the six most affected European countries during the record heatwave that spanned from mid-June to early July. The drought also caused severe damage to Europe's energy system. Lower water levels in the Danube River in recent weeks forced sharp reductions in operations at the Paks nuclear power plant in Hungary. Romania had to blast a rock to divert water towards its last operational nuclear reactor. Furthermore, vessels on the Rhine and Danube rivers were forced to sail with partial cargo only. In Austria, agricultural losses amounted to €1 billion due to the drought, following a reduction in rainfall of more than 75% below the normal rate in some areas since mid-June. Triodos Bank warned against considering this summer an exceptional event, emphasizing that severe heatwaves "could become a structural phenomenon" as the planet's temperature rises. It highlighted that governments could mitigate damages through irrigation, insulation, cooling systems, and adjusting working hours.
