This blog was written by Eero Yrjö-Koskinen, IEEP Executive Director.
Extreme weather events caused by climate change are raising increasing concerns about the financial burden that Member States may have to face in the future due to global warming. The European Commission has proposed to provide a total of 1 billion euros to support countries that suffered most from last year’s massive floods in Austria, France, Greece, Italy, and Slovenia.
However, this financial support will cover only a small fraction of the actual costs incurred by these countries. Slovenia, for instance, should receive 428.4 million euros from the EU Solidarity Fund to cover costs caused by floods in 2023. This is a minimal share of the actual damages caused by floods in Slovenia, which amounted to nearly 10 billion euros last year, representing a staggering 16% of its annual GDP.
Similarly, many Members States are getting increasingly worried about the price tag that they may have to pay if they cannot cope with their national pledges to reduce CO2 emissions. In Finland, for example, the National Audit Office has started an inquiry into whether the national climate policies introduced by the government are based on scientific facts, and whether these measures are sufficient to reduce GHG emissions to the extent necessary.
If a Member State does not meet its emission targets, it will eventually face an infringement procedure launched by the European Commission, which in turn could lead to major fines to be paid by the Member State concerned.
Meanwhile, the Natural Resources Institute in Finland (LUKE) has estimated that the country may have to pay several billion euros due to reduced carbon sinks. The final bill will depend on results achieved by 2025 based on the EU Land Use and Land Use Change and Forestry (LULUCF) Regulation, which sets legally binding national targets for net carbon sinks by 2030.
As stated already in a multitude of scientific reports*, any delay in climate action will only exacerbate the costs and damages caused to our societies and well-being unless we introduce the necessary measures to reduce our emissions as planned.
The time to act is now. IEEP will continue to support the EU Institutions and the private sector to cope with these challenges and to find sustainable alternatives to current practices.
Image by Bernd Dittrich on Unsplah
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