Europe is urged to increase its investments in disaster resilience, adaptation, and finance response to climate change, according to new reports on the Economics for Disaster Prevention and Preparedness. The reports were released by the World Bank and the European Commission today.
The continent of Europe is warming at a faster rate than any other region globally, making it highly susceptible to increasing risks associated with climate change. Over recent decades, Europe has experienced significant losses and destruction due to climate-related disasters. The year 2023 was recorded as the hottest year, with disasters across Europe costing more than €77 billion. If no action is taken against this trend, the projected costs could reach up to 7 percent of EU GDP in a high warming scenario.
"Disasters are devastating for everyone but can disproportionately impact Europe’s most vulnerable communities, increasing poverty and inequality," said Sameh Wahba, Director at the World Bank. "Without adequate systems, these events can erode development gains. There is still time for European countries to take actions that will protect people’s lives, infrastructure, and public finances from disaster and climate change impacts; however, there is a narrowing window of opportunity."
While many European countries have taken significant steps towards enhancing resilience against these risks, the reports indicate that more needs to be done. An EU-wide analysis shows that many critical sectors are exposed to multiple natural hazards. For instance, fire stations in half of EU Member States are located in areas with high levels of multiple hazards such as wildfires, landslides, floods, and earthquakes.
"Investments in prevention and preparedness are urgently needed at all levels," stated Hanna Jahns, Director at the European Commission Humanitarian Aid & Civil Protection. "The needs are significant and the pressure on the EU and government budgets is high. Going forward we need to invest in a smart way."
Prioritization can make investments cost-effective when considering likely impacts of climate change. Countries can focus financing on more risk-exposed areas or assets that may be vulnerable to disaster impacts. The reports highlight the power of risk and climate change data and analytics as tools to select the most impactful prevention, preparedness, and adaptation investments.
Countries can develop climate "adaptation pathways," decision-making approaches that allow them to prepare and take actions in times of uncertainty. These pathways combine current and future climate risk data to better inform climate change strategies. The report shares new evidence on best practices and cost estimates at national and EU levels.
"There is a significant gap in adaptation financing in Europe," said Elina Bardram, Director at the Directorate-General for Climate Action. "Closing it requires a major scale-up of public, private, and blended finance."
The reports also highlight the need for financial resilience, noting that too much of the disaster and climate risk is managed through budgetary instruments at the EU level. Response operations to wildfires account for approximately one third of total response costs in the European Union Civil Protection Mechanism (UCPM) budget.
The reports offer tools and examples to help countries take a more strategic approach to boosting climate resilience. They were developed in partnership with funding from the European Commission.