Global boiling – Heatwave may cost -0.5pp of GDP in Europe

· An initial ‘back of the envelope’ calculation suggests that the recent heatwaves across Southern and Central Europe, the US and China could carry significant economic costs. Estimated GDP losses range from -0.1pp for Germany to as much as -1.4pp for Spain, with total losses of -0.5pp for Europe, -0.6pp for the US and -1.0pp for China. To put this into perspective, one day of extreme heat (above 32°C) is equivalent to half a day of strikes.

· Adaptation is key. In the short term, warning and prevention measures can be put in place. But these need to be complemented by longer-term structural adaptation measures to prepare cities for climate change (i.e. urban greening) and ways to productively adapt workplaces to an increased heat burden (i.e., adapting buildings, infrastructure and working hours).