Heat could cost Europe's biggest economies $638 billion by 2030
Allianz says worsening heat waves threaten major GDP losses as Europe faces deadly temperatures, weak cooling infrastructure and rising productivity risks.
By Daniel Okafor · Business Editor
3 min read
Extreme heat is straining Europe’s public services and could take a heavy toll on its largest economies by the end of the decade. Allianz has estimated that worsening heat waves could erase a combined $638 billion from France, Italy, Germany and Spain by 2030.
The warning comes as a severe heat wave hits the U.K. and parts of western and southern Europe. In London, United Nations Secretary-General Antonio Guterres used a London Climate Week speech to link the day’s conditions to the broader climate risk, saying: “London isn’t just calling—it’s cooking.”
The BBC reported that London recorded its hottest June day on record, with temperatures reaching the high 90s Fahrenheit. The U.K. Met Office issued a rare red warning for extreme heat and described the forecast conditions as a risk to life.
The heat has already disrupted daily life. The Independent reported school closures across southern England, while The Guardian reported that train operators cut services and advised passengers to avoid travel where possible.
Other European countries are facing similar stress. The BBC reported red alerts in France, Germany, Spain and Italy as temperatures moved past 100 degrees Fahrenheit in some areas. Reuters reported at least 18 heat-related deaths in France, including two children, while the BBC reported additional drowning deaths as people sought relief in water.
Allianz sees large economic losses
Allianz said in a risk report published last month that heat is becoming a structural economic threat for Europe. Under a scenario in which heat waves intensify each year, the insurer modeled cumulative GDP losses of 5% to 7% by 2030 for wealthy European economies with high exposure.
France faces the largest projected loss at $240 billion, according to Allianz. The report estimated losses of $147 billion for Italy, $131 billion for Germany and $120 billion for Spain.
Those estimates build on a growing body of research linking extreme weather to lower output. Germany’s University of Mannheim said heat, drought and flooding caused €43 billion, or nearly $50 billion, in losses for European economies last year, largely through reduced productivity and damage to agriculture and infrastructure.
Older buildings and older populations raise the risk
Europe’s vulnerability reflects both climate trends and infrastructure gaps. The EU’s Copernicus Climate Change Service has said Europe is the world’s fastest-warming continent, with temperatures rising about 2.4 degrees Celsius over the past five years, nearly twice the global average.
Allianz pointed to several weaknesses that make the continent less prepared for prolonged heat. Its report said only 19% of European buildings and homes have air conditioning, compared with about 90% in the United States. It also cited dense buildings that retain heat and limited subsidies for household cooling equipment.
Demographics add to the exposure. EU data shows one in five Europeans is older than 65, and people aged 80 and above are the bloc’s fastest-growing age group. Older people face higher health risks during heat waves.
The economic damage extends beyond emergency response. The World Meteorological Organization has found productivity losses of 2% to 3% for each degree above 20 degrees Celsius, with larger losses as temperatures rise. Allianz said heat can also weigh on investment, hiring and production by raising energy and raw material costs and making work less efficient.
This story draws on original reporting from Fortune.