In Italy, the drought from 2015-2018 cost 1.45 percentage points of GDP per capita growth (about 24.3 billion euros) and 330,000 jobs. The one in 2022 was even worse, with a 43 billion euro GDP cut. In a scenario 2 °C warmer than the pre-industrial period, losses in our country could rise to 3.99 percentage points (about 74 billion euros) and 960,000 jobs. These are the numbers and estimates contained in the research Multi-Year Droughts and Their Compounding Economic Impacts in Europe, conducted by researchers from the Cmcc Foundation (Euro-Mediterranean Center on Climate Change) and Politecnico di Milano, aiming to quantify the economic effects of drought events, even after their conclusion. Prolonged exposure to water crises is indeed what has characterized recent years, and our country, along with Europe, is facing another summer of extreme heat.
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Agriculture, manufacturing, and construction, the study indicates, are among the sectors that pay the highest price. While the first suffers the strongest immediate blow, it recovers within two or three years thanks to insurance, price adjustments, and crop changes. The other two sectors, however, prolong losses for years after the drought begins, due to the simultaneous investment freeze.
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According to the study, official European estimates of damages from extreme events (738 billion euros in the period 1980-2023, with 208 billion only in the 2021-24 four-year period) underestimate the real economic cost of drought, not taking into account the years following the climatic event. The 2015-2018 drought (long and heavily affecting Northern Europe) has already cost the old continent around 439 billion euros, reducing GDP per capita growth by 2.72 percentage points in the EU and the United Kingdom. It also caused a drop in investments of over 12% for 5.8 million fewer jobs.
“This research highlights the persistence of social and economic impacts of European droughts and the vulnerability of the entire continent in an increasingly warmer climate. Europe is called to design institutions and markets capable of coping with extreme climatic conditions: an opportunity to seize in its next adaptation plan,” commented Massimo Tavoni, professor at Cmcc and Politecnico di Milano, among the study’s authors.
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