Conference Agenda

Climate change has already led to a global temperature increase of 1.1°C above pre-industrial levels, with visible and quantifiable impacts. Despite uncertainties about future climate scenarios, the global climate will continue to change, leading to economic losses. Traditionally, the macroeconomic impact of climate change has been modeled using damage functions based on the relationship between temperature and GDP. This paper reviews the literature on the economic impacts of different types of climate damage, focusing on the EU. Nine types of climate impacts were selected for analysis, including coastal and river flooding, labor productivity, drought, and agricultural production. The results show significant variability in economic impacts across different types of damage and between EU Member States, with Southern countries like Greece expected to face severe impacts from drought, while Northern countries like Sweden may see minimal effects. In the next step, the paper estimates damage functions for each type of damage and EU Member State, testing various functional forms and incorporating mixed effects. The study also scores the quality of these estimates and presents a set of damage functions at the EU and national levels. While using global temperature changes as the sole explanatory variable simplifies the analysis, it limits the precision of local impact assessments. However, this approach aims to make the damage functions more accessible for researchers and policymakers in the EU.