Caixa Enginyers quantifies the economic impact of heatwaves: Catalan GDP would lose at least 0.5 points
The decline would come above all from the reduction of productivity, especially in the primary sector
BarcelonaThe Catalan economy could lose at least 0.5 percentage points of its gross domestic product (GDP, the indicator that measures the size of an economy) due to the impact of heat waves. This is the figure provided by Caixa Enginyers in a study published this Monday based on data from the scientific journal Nature, which takes into account the effects of previous heatwaves on economic activity in the country. According to the entity's research service, Catalonia – along with the rest of Spain – would be one of the regions most affected by extreme phenomena in Europe. In fact, the study places Spain as the fifth country on the Old Continent where extreme climatic episodes can most affect the economy.
In the analysis, Caixa Enginyers points out that the effects of heat waves can be transmitted through various channels. In this regard, the main route of transmission would be the reduction of labor productivity and working hours, especially in sectors more exposed to rising temperatures, such as the primary sector, construction, or transport. "These reductions affect industrial production processes and, ultimately, the service sector," warns the entity. On the other hand, the report also mentions the destruction of infrastructure or housing due to extreme phenomena and the negative economic impact on people's health, well-being, and education.
In parallel, the document emphasizes that heat waves tend to cause an increase in prices, especially for food. According to estimates by the European Central Bank (ECB) included in the study, drought and high temperatures can lead to an increase in food prices of between 0.4 and 0.9 percentage points. For Caixa Enginyers, this effect "could double in the coming years" given the increase in the frequency and intensity of these episodes.
Multimillion-dollar losses in Europe
Citing another study by the European Environment Agency, the analysis published this Monday estimates economic losses caused by extreme climate events across Europe between 1980 and 2023 to be up to 738 billion euros.
Beyond the magnitude of the figure, the following data is particularly relevant: of this amount, one fifth of the losses – the equivalent of almost 150 billion euros – were recorded only between 2021 and 2023. In parallel, extreme climatology has directly caused the death of at least 250,000 people since the beginning of the eighties.
Cumulative effect
Another of the study's major warnings is that the economic impact of heatwaves and other climate factors accumulates over time. According to the entity's estimates, Catalan and Spanish GDP could be 1.4 percentage points lower, a situation without abnormalities four years after a heatwave and up to 2.4 points lower after a drought.
On this issue, the report already states that the impact of heatwaves "will continue to increase over time." In the case of Spain, the reduction in GDP could reach two percentage points by 2040 and up to three points by 2060, figures similar to other countries such as Portugal or Croatia.
Added to global warming – accentuated by phenomena like El Niño – the availability of fertilizers and supply disruptions caused by the war in Iran and the closure of the Strait of Hormuz must also be taken into account. To face this entire context, investment to mitigate the effects of climate change and adapt infrastructure could reach 500,000 million euros over the next decade, according to European Commission calculations. The same study by Caixa Enginyers refers to the famous Draghi report, which identifies decarbonization as a "strategic" opportunity for the European Union. However, it also points out that, at present, the EU is at a point of "competitive disadvantage" compared to other major economies such as China and the United States.
