Environmental costs of a lack of ambitious

As stressed on numerous occasions by the IPCC, failure to rapidly engage in tackling climate change and in implementing measures to reach net zero in 2050 would lead to a disastrous environmental impact both for the EU and the rest of the world. A previous EPRS report estimated that the related monetary costs of such complacency would also be substantial, at around €160 billion per year for the EU as a whole. Recently, the Joint Research Centre of the European Commission (JRC) has provided a comprehensive updated evaluation of the environmental consequences of non-Europe in this area in its projection of the economic impacts of climate change in sectors of the EU based on a bottom-up analysis (PESETA project). Under this project, impacts are computed for various warming targets for the EU and they grow with the intensity of global warming. Building on these results, the authors of this report estimated the losses corresponding to the best temperature estimate in the various scenarios highlighted in Figure 6 below. Exposing the economy to a global warming of 4.5°C would result in an annual welfare loss of approximatively €308 billion. Under a 2°C scenario the welfare loss would be €130 billion per year, while limiting global warming to 1.5°C would reduce welfare loss to €42 billion per year. The effective realisation of ambitious and united EU action would thus be beneficial, yielding welfare gains of potentially €89 billion per year compared to the baseline reference scenario.