Heatwaves, drought and floods cost Europe €43bn this summer, study finds; sea levels to keep rising long term

A new analysis concluded that heatwaves, drought and floods across Europe from June through August 2025 caused at least €43 billion (£37 billion) in direct economic losses, a conservative estimate that excludes impacts from wildfires, hail and storms. The study, published in the European Economic Review and based on weather and economic data for the summer months, found the continent already facing substantial costs from climate-driven extremes and warned those costs are likely to increase.

The researchers estimated 96 regions experienced heatwaves, 195 suffered drought and 53 were hit by floods during the period analysed. They said the €43 billion figure could climb to €126 billion (£109 billion) by 2029 as exposure and frequency of extreme events grow.

Southern Europe bore the heaviest toll, with Spain, Italy, Portugal, Greece and southern France particularly hard hit. The authors said France suffered the largest financial losses from heat, with some locations in southwest France recording maximum temperatures about 12°C above multi‑decadal norms. Spain, Greece, Italy, Portugal and Bulgaria experienced severe and extreme dryness that disrupted agricultural production and economic activity in tourist and farming regions.

Flood-related losses were concentrated in Italy and Slovenia, the study found. Northern European countries such as Denmark, Sweden and Germany recorded fewer losses overall, but the researchers noted an increasing frequency and geographic spread of flooding even in those regions. Smaller economies — including Bulgaria, Malta and Cyprus — were identified as particularly vulnerable to climate shocks because of limited buffers and high exposure to climate‑sensitive sectors.

The analysis drew on weather records for the three months and combined those observations with economic data to estimate direct damage. The authors said their approach likely underestimates the full cost because it excludes some drivers of loss such as wildfires and storm damage.

Climate scientists and policy specialists pointed to broader implications beyond immediate damage. Gareth Redmond‑King, head of the international programme at the Energy & Climate Intelligence Unit, who was not involved in the study, warned of knock‑on effects on supply chains. He noted that the United Kingdom imported nearly five billion tonnes of food worth about £10 billion last year from southern European and smaller economies cited in the analysis, and that disruption to production in those regions could push up UK food costs. He also said the UK was on track for one of its worst harvests following poor yields in recent years.

The findings come as national meteorological services reported record heat across parts of Europe in 2025. The UK experienced its warmest and sunniest summer on record, with four separate heatwaves and prolonged drought conditions that contributed to hosepipe bans in parts of England and Wales. Scientists cited by the analysis estimated that this year’s unusually warm conditions were made about 70 times more likely by human‑caused climate change.

Authors of the economic study wrote that the results demonstrate extreme weather is already shaping economic development in Europe and that, without rapid emissions reductions and adaptation measures, impacts will grow.

In a separate, longer‑term assessment, a German‑led research team warned that global sea levels could rise by 0.7 to 1.2 metres (about 2.3 to 4 feet) by the year 2300 even if nearly 200 nations meet the 2015 Paris Agreement goals. That projection, driven by continued ice melt from Greenland to Antarctica and thermal expansion of warming oceans, reflects committed sea‑level change from greenhouse gases already emitted, the researchers said.

"Sea level is often communicated as a really slow process that you can't do much about ... but the next 30 years really matter," said lead author Dr. Matthias Mengel of the Potsdam Institute for Climate Impact Research. The team estimated that every five years of delay beyond 2020 in peaking global emissions would add roughly 20 centimetres (about 8 inches) to long‑term sea‑level rise by 2300.

The sea‑level assessment also noted that none of the nearly 200 governments that signed the Paris Agreement are currently on track to meet its pledges, increasing the risk of larger long‑term changes to coastlines and coastal economies.

Researchers and analysts called the combined findings evidence that costs from climate change are shifting from a future risk to a present‑day economic burden. They said policy responses will need to accelerate on two fronts: reducing greenhouse gas emissions to limit longer‑term warming and sea‑level rise, and investing in adaptation measures to reduce vulnerability to heat, drought and flooding already underway.

The authors of the European Economic Review paper urged policymakers to account for regional exposure and the unequal distribution of impacts across economies. They said investment in early warning systems, water management, resilient infrastructure and targeted support for smaller economies could reduce short‑term losses and the rate at which costs escalate.

The studies underline a growing consensus among climate scientists and economists that the near‑term economic impacts of climate extremes are rising and that delayed mitigation will lock in further, and in some cases irreversible, changes to coastlines and regional economies.