Why Extreme Weather Costs More Than We Realize

19.08.2026

Europe is once again experiencing a summer of extreme weather. Heatwaves have swept across large parts of the continent, while wildfires, droughts, and exceptionally low water levels on major rivers such as the Rhine and Danube have placed increasing pressure on communities, ecosystems, and economic activity. 

After the extreme weather of 2025, this summer is another reminder that such events are no longer isolated shocks.

While much of the debate focuses on the impact of extreme weather on people, animals, and nature, Dr. Sehrish Usman explores another important question in this Research in a Minute video: What is the economic cost of these events?

Beyond the visible damage

The economic impact of extreme weather goes far beyond destroyed buildings and infrastructure. By looking at losses in gross value added (GVA), Usman, together with researchers at the European Central Bank, also captures indirect and long-term effects such as lower productivity, disrupted supply chains, and crop failures.

The findings are striking. Extreme weather events in 2025 are estimated to have caused around €43 billion in lost economic output across affected European regions. And the economic consequences do not end when the extreme weather passes. Even assuming no further extreme events occur, annual losses in these regions could rise to €126 billion by 2029.

Watch the video to discover why the true cost of extreme weather may be much higher than the damage we can see.