"European Central" It warns: Climate disasters may cost the euro area 5% of its local product by 2030
Frankfurt on July 9 / WAM / The European Central Bank warned that accelerating climate disasters may incur losses of 5% of its gross domestic product by 2030, in the event of environmental policies on their current pace.
In an analytical note published on Tuesday, the bank explained that this possible economic shock, which is based on rare scenarios, will exceed the current reference expectations of growth, and may lead to decline in productivity, destruction of infrastructure, increased inflation and borrowing cost, according to the French Press Agency (AFP).
On the other hand, the report indicated that the rapid and coordinated transition towards carbon neutrality, in line with the Paris Climate Agreement, can achieve slight economic growth and contain inflation rates.
The European Central Bank emphasized that these new scenarios, which focus in the short term, will be included in the upcoming climate pressure tests that are conducted on the largest banks in the euro area to assess risks more accurately.
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