The fiscal impact of extreme weather events: First evidence for EU countries

Dealing with the physical impacts of climate change and supporting the transition to net zero will require substantial efforts from governments. This column presents the results of a first quantification, carried-out for selected EU countries, of the potential fiscal impact of acute physical risks from climate change. The results highlight that extreme weather events, whose frequency and magnitude should intensify in the coming decade(s), could lead to a significant increase of the public debt burden in some countries, thus adding to existing fiscal vulnerabilities.

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