Europe unprepared for climate disaster, warns World Bank

Climate-related disasters cost Europe more than €77 billion last year, according to a new report. But costs can be lowered with better data and financing strategies.

A series of reports issued last week by the World Bank in partnership with the European Commission paint a troubling picture of Europe’s readiness to handle the effects of climate change over the coming years.

Among the most alarming findings is this: the European Union could lose seven per cent of its GDP to dealing with the impacts of climate change by the 2030s.

2023 was the hottest year in Europe on record, and weather events linked to climate change cost more than €77 billion, according to the report. And while European countries are taking major steps to prepare for these impacts, the reports conclude that more needs to be done – particularly in critical sectors such as those that provide emergency response services.

In half of EU member states, for instance,  there are fire stations located in areas that face more than one natural disaster hazard. Such lack of preparation for emergency services has already had impacts, says Zuzana Stanton-Geddes, a senior disaster response management specialist with the World Bank who was a team leader for the project.

During the 2023 wildfires in Greece patients had to be evacuated from Alexandroupolis General Hospital because of where it was located, and during Germany’s 2021 floods fire stations became inactive because they were in the flood zone.

“The report shows that critical infrastructure like fire and police stations, hospitals, schools, roads, and power lines are often located in areas that are vulnerable to multiple hazards including floods, wildfires, earthquakes, and landslides,” she said.

Stanton-Geddes added: “Preparing for disasters and climate shocks is extremely important to Europe’s policymakers and these reports provide tools, data, and evidence to boost both disaster preparedness and resilience to climate shocks for their people.”

But this isn’t to say that Europe’s lawmakers aren’t doing anything.

At the European level, there is the EU Adaptation Strategy, the EU Floods Directive, and various aspects of the European Green Deal focusing on adaptation. The reports find several examples of best practices by national governments as well.

“Portugal has invested a lot into comprehensive wildfire prevention and preparedness, such as with research and modern analytics, community-level actions, reforms towards integrated wildland fire management and fuel management,” says Stanton-Geddes.

“Portugal’s efforts have inspired other countries to take similar actions. The Netherlands is a well-known example of flood risk management – with a mix of measures and investments – including nature-based solutions. Italy has been investing in and incentivizing multi-functional upgrading of public and private buildings and integrating seismic safety and energy efficiency.”

“Many European cities have also developed local climate adaptation plans and initiatives, such as green infrastructure, management of heatwaves, or improving flood risk management,” she added, explaining: “Cities like Vienna and Salzburg, in Austria, are tackling the urban heat island effect through a combination of actions ranging from greening and the use of reflective building materials to energy efficiency measures and investments in sustainable modes of transport.”

Using data for adaptation financing

One of the reports deals specifically with the issue of how to finance increased climate adaptation preparedness. It notes that early investment is much more cost-effective than later investment, and that prioritization is the best way to focus spending. This means that countries should focus financing on more risk-exposed areas or assets that may be vulnerable to disaster impacts and put people in danger or cause major disruptions, such as ageing infrastructure or critical networks.

The report notes that more research and data are needed on where those vulnerabilities are and what kinds of costs would be involved in remedying the situation. It suggests that countries develop climate “adaptation pathways” that set the direction of travel, combining current and future climate risk data.

Given current information, the report estimates that the cost of climate adaptation will vary between €34 to €110 per person per year, depending on where they live. Total adaptation costs in the European Union up to the 2030s could be between €15 billion to €64 billion annually – suggesting a necessary scale of adaptation finance between 0.1 and 0.4 per cent of EU GDP.

“Adaptation pathways combine the needs and priorities across all economic and administrative sectors,” explains Solene Dengler, a senior climate change adaptation specialist with the World Bank who worked on the report.

“This means countries need to carry out more and better studies both at national and sectoral levels to identify adaptation gaps, costs, and benefits of adaptation measures and track adaptation expenditures and implementation,” said Dengler.

The report concludes several specific case studies such as wildfires and extreme heat in Bulgaria, floods impact transport in Romania, and wildfire prevention in the forestry sector in Sweden.

But for costs to be correctly estimated so governments can steer financing in the right direction, better data is needed.

“There is a lack of information on projected impacts of climate risks for the short to medium term from the 2030s to the 2050s), especially to inform sectoral or investment portfolio assessments,” says Dengler.

She remarked: “Strengthening a country’s financial resilience will also require improved macroeconomic modelling that can better capture extreme impacts and take into account adjusted macroeconomic impacts when policymakers are considering a package of adaptation measures. At the EU level, the recent European Climate Risk Assessment and this report are important contributions to this evolving knowledge base.”

In the end, neither climate change adaptation nor climate change mitigation strategies should distract from the other, she said, “Climate change adaptation is complementary to climate change mitigation. Acting on both is economically beneficial, can reduce direct losses from disaster and climate impacts and have broader social and environmental benefits.”

The report concludes that a major scale-up of public, private, and blended finance will be necessary and investment planning and financial strategies are not yet adequately informed by an understanding of the costs of climate change adaptation at national and EU levels.

One area of concern is that too much of the disaster and climate risk is managed through budgetary instruments at the EU level and by EU Member States, with gaps concerning pre-arranged funds and the use of risk transfer mechanisms, such as risk insurance.

Response operations to wildfires account for approximately one-third of total response costs in the European Union Civil Protection Mechanism budget. But if the EU experienced wildfires this year similar to the extremes of the 2017 season, there would need to be a 70 per cent increase in the annual budget. This, the report concludes, shows that not enough planning has gone into matching financing needs with disaster potential based on previous experience.

“The major takeaway is that the EU’s substantial climate risks require system-wide transformational adaptation, which includes reforming institutions, legal frameworks, and sectoral strategies,” said Dengler, adding: “A piecemeal approach is no longer enough. Adaptation measures must be mainstreamed and coordinated across sectors and ministries, including in planning, fiscal, and sectoral strategies.”

[By Dave Keating I Edited by Brian Maguire | Euractiv’s Advocacy Lab ]

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