The climate crisis has cost much more in the poorest countries of the EU. The highest costs (as a percentage of GDP) are recorded in Croatia, Romania, Czech Republic, Bulgaria. They are very close to Hungary, but also Greece with the loss exceeding 0.1% of GDP per year, says Scope Ratings in the report “Extreme climate events in Europe: rising economic losses can lead to greater sovereign ratings divergence”.
The house estimates the cost of extreme weather and climate phenomena in Cyprus for the period 1980-2019 was € 393 million. This is an amount that corresponds to losses of 10 million euros per year or 566 euros per capita. These phenomena have so far cost 1.8% of GDP in 2019, or otherwise cost 0.05% of GDP per year. In fact, the insured damages are only 2% of the total, while the number of victims is 9.1 deaths per 100,000 inhabitants.
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If no hedging investments are made, these costs are expected to increase in the coming years, Scope said, noting that the countries of southern and central Europe are the most exposed.
The analysts of the house emphasize that the risk arising from the climate crisis affects the ratings of the houses for the debt, as this composes the credit profile of a country. The cost of natural disasters is expected to increase in the coming years unless investments are made to mitigate environmental pollution and infrastructure. The rating agency places particular emphasis on the funds that will be channeled from the Recovery Fund to address the effects of climate change and infrastructure projects. It is noted that the EU recovery plans are mainly related to the climate through investments to support sustainable transport (18% of the total), clean technologies and renewable energy sources (11%) and energy efficiency of buildings (10%).
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