03/06/2026
🚧 𝗖𝗹𝗶𝗺𝗮𝘁𝗲 𝗿𝗶𝘀𝗸 𝗱𝗼𝗲𝘀𝗻'𝘁 𝘀𝘁𝗼𝗽 𝗮𝘁 𝗯𝗼𝗿𝗱𝗲𝗿𝘀. Europe may seem relatively sheltered from climate change with fewer extreme events and strong adaptive capacities. But our economy doesn't exist in isolation.
In a study, CSH researcher Andrea Vismara, together with colleagues from the European Central Bank, traces how physical climate shocks travel through global supply chains — and what that means for Europe's GDP as well as economies worldwide.
𝗪𝗵𝗮𝘁 𝘁𝗵𝗲𝘆 𝗱𝗶𝗱
They combined country- and sector-level input-output data (which track how goods and services are bought and sold) with a simulation model.
𝗪𝗵𝗮𝘁 𝘁𝗵𝗲𝘆 𝗳𝗼𝘂𝗻𝗱 𝗼𝘂𝘁
📈 GDP losses in the Eurozone could surpass 10% – a figure nearly 15 times greater than the direct climate shock expected for the region
🗺️ In the Eurozone, the countries most at risk include Mediterranean countries with high direct exposure to physical climate risks, as well as nations with extensive trade links, such as Germany and Luxembourg
🌎 Global GDP losses could reach up to 18% under the most adverse climate scenario
𝗪𝗵𝗮𝘁 𝘁𝗵𝗲 𝗴𝗿𝗮𝗽𝗵𝗶𝗰 𝗶𝗻 𝘁𝗵𝗲 𝗶𝗺𝗮𝗴𝗲 𝘀𝗵𝗼𝘄𝘀:
It shows how much GDP is at risk across global regions due to spillover effects through trade. Each column represents a single disaster type.
𝗪𝗵𝘆 𝘁𝗵𝗶𝘀 𝗺𝗮𝘁𝘁𝗲𝗿𝘀
Understanding where climate shocks enter the economic system — and how they amplify — is essential for assessing risks to the financial system. Climate change is a global challenge with economic consequences that don't respect borders.
🔗 Learn more: https://csh.ac.at/news/the-global-economic-ripple-effect-of-climate-change/
First published as a SUERF - The European Money & Finance Forum Policy Brief in 2024, the full paper is now out in Ecological Economics.
