The analysis shows that agriculture, energy and transport are among the sectors most exposed to climate-related risks. Europe is currently the fastest-warming continent, and extreme weather events such as floods, droughts, heatwaves and wildfires are already causing significant economic losses. Average annual damage from such events has reached approximately EUR 40–50 billion in recent years.
Between 1980 and 2024, direct economic losses linked to extreme weather totalled around EUR 822 billion across the EU. The period from 2021 to 2024 accounted for the highest annual losses to date, indicating a clear upward trend. As these figures cover only direct damage, overall economic impacts are likely to be considerably higher.
The briefing estimates that annual investment needs for climate adaptation in agriculture, energy and transport range from EUR 53 billion to EUR 137 billion by 2050, depending on whether global warming is limited to between 1.5 °C and 2 °C above pre-industrial levels or rises to around 3 °C. By 2100, required annual investments could increase to between EUR 59 billion and EUR 173 billion. Current committed funding for these sectors is estimated at only EUR 15–16 billion per year, with the majority provided by public sources at EU, national and regional levels. This results in an annual investment gap of more than EUR 100 billion.
Beyond loss avoidance, climate adaptation investments can deliver measurable economic returns. Research by the Joint Research Centre indicates that adapting to rising coastal flood risks in the EU can generate returns of approximately six euros for every euro invested. At global level, a study by the World Resources Institute found that each US dollar invested in adaptation can deliver more than USD 10 in benefits over a ten-year period, with average project returns of around 27%.
The briefing also highlights the broader economic effects of adaptation. The concept of a double dividend refers to measures that reduce climate risks while simultaneously supporting sustainability objectives, for example through nature-based solutions that both limit flood damage and enhance carbon storage. A triple dividend extends this approach by combining avoided losses with economic development benefits and increased productivity, thereby supporting long-term competitiveness alongside climate resilience.
