The population at risk of poverty in the EU is expected to increase due to climate change: according to a study by CMCC, healthcare, food, and energy expenses of households will significantly rise, and their income will decline by 2050 due to climate change. Furthermore, poor families in the southern EU region will experience the greatest impacts. Mitigation policies are likely to have a positive effect on the lower-income layers of the population, at least in relation to their job income.

A recent study by CMCC, carried out for the European Economic and Social Committee (EESC), estimated the cost of climate change for households in the EU.

The research highlighted a North-South gradient, indicating that the rise of expenses for health, food, and electricity due to climate change will occur, especially in the Southern EU. Among these expenses, healthcare costs are expected to have the highest increase, particularly in Cyprus and Greece, followed by Spain, Croatia, Italy, and Portugal. Furthermore, income will shrink, in particular the job income in the South of the EU.

This results in increased risks for poorer families in the EU, who will experience higher economic impacts compared to wealthier families. Climate change will consequently lead to an increase in the population at risk of poverty in the European Union; however, the mitigation policies seem to have a beneficial effect, at least on job income.

According to the study, there are various channels through which adaptation strategies, mitigation measures and the impact of climate change can influence the well-being of families: by affecting the expenditure on health services, food, energy, and other goods, as well as by modifying occupation, salaries and asset values. This is the first study to provide a joint assessment of the multiple channels through which the costs of climate change impacts, adaptation measures, and mitigation policies affect households in the European Union.

European regions and households will experience differentiated impacts due to climate change. “Policymakers should prioritize the areas characterized at the same time by negative impacts on households and regressivity, that is, poor families experiencing higher costs compared to rich households”, says CMCC researcher and first author of the study Lorenza Campagnolo. “This is the case of the South of the EU, which will see a simultaneous increase of household spending on health, electricity, and food, and a contraction of income due to climate change. These impacts will be regressive, meaning that they will weigh more on poor than rich households.”

The research was based on statistical data provided by Eurostat and climatic data primarily from the ERA5 dataset delivered by the Copernicus Climate Change Service. The authors combined the statistical analysis with projections from CIMP6 and the Shared Socioeconomic Pathways (SSPs), to quantify the costs of climate change impacts and adaptation strategies for European families in 2050.

The results of this study can contribute to better design policies aimed at mitigating the impacts of climate change. In particular, knowing the characteristics and the location of the most vulnerable families will be essential in attempting to curb this climate-induced inequality.

Go to the report: The cost of climate change on households and families in the EU