The Impacts and Economic Costs of Climate Change on Enery in Europe

The report finds that climate change will increase summer cooling demand and decrease winter heating demand in Europe, with the A1B scenario leading to significantly higher costs. While physical energy reductions in heating are larger than cooling increases, the higher cost of electricity for cooling makes the economic impacts more balanced. The study also identifies risks to energy supply, including reduced hydroelectricity generation and lower efficiency for thermal and nuclear power plants due to higher temperatures. Adaptation measures, such as low-energy buildings, are discussed but noted as having a low evidence base for cost-benefit analysis.

• Under the medium-high emission A1B scenario, cooling demand in the EU27 is projected to reach 145 Million tonne of oil equivalent (Mtoe) per year by 2050 and 269 Mtoe/year by 2100. Of these totals, the increase attributable to climate change alone is 16 Mtoe/year by 2050 and 53 Mtoe/year by 2100.
• The total economic cost of increased cooling in the EU27 under the A1B scenario—combining electricity consumption and the investment for new air conditioning units—is estimated at €30 billion/year by 2050 and €109 billion/year by 2100 (undiscounted current values).
• Climate change is expected to reduce winter heating demand in the EU27. Under the A1B scenario, the reduction from climate change alone is estimated at -28 Mtoe/year by 2050 and -65 Mtoe/year by 2100, representing a 10% and 20% reduction respectively against the future baseline.
• The economic benefit of reduced heating demand under the A1B scenario is estimated at €34 billion/year in 2050 and €121 billion/year in 2100, which is roughly equivalent to the increase in cooling costs.
• Climate change may increase energy demand for water supply and treatment in the EU. In the A1B scenario, this demand could increase by 5% in 2050 and 12% in 2100, with associated costs of €1.5 billion/year and €5 billion/year respectively.
• European hydroelectricity generation is projected to decrease due to climate change. Under the A1B scenario ensemble mean, generation is estimated to fall by approximately 3% in 2050 and 8% in 2100 compared to the future baseline.
• Higher temperatures may reduce the efficiency of thermal and nuclear power plants. Under the A1B scenario, generation could be reduced by 2-3% for thermal plants and 4-5% for nuclear plants per year by 2100.
• The E1 mitigation scenario, aligned with a 2-degree stabilisation target, significantly reduces the impacts compared to A1B. Total cooling demand under E1 is projected at 113 Mtoe/year by 2050 and 139 Mtoe/year by 2100, with total costs due to climate change alone around €20 billion/year between 2050 and 2100.
• Adaptation through low-energy (LE) and very low-energy (VLE) buildings is analyzed, but the study finds that changes in heating and cooling demand do not significantly accelerate the market share of VLE buildings without additional policy action.

APA

S, M., P, C., & P, W. (2011). The Impacts and Economic Costs of Climate Change on Enery in Europe. Stockholm Environment Institute. https://www.sei.org/mediamanager/documents/Publications/sei-climatecost-energy.pdf

Chicago

S, Mima, Criqui P, and Watkiss P. The Impacts and Economic Costs of Climate Change on Enery in Europe. Stockholm Environment Institute, 2011. https://www.sei.org/mediamanager/documents/Publications/sei-climatecost-energy.pdf.

Wikipedia

{{cite report |last1=S |first1=Mima |last2=P |first2=Criqui |last3=P |first3=Watkiss |title=The Impacts and Economic Costs of Climate Change on Enery in Europe |publisher=Stockholm Environment Institute |date=2011 |url=https://www.sei.org/mediamanager/documents/Publications/sei-climatecost-energy.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{s2011impacts, author = {S, Mima and P, Criqui and P, Watkiss}, title = {{The Impacts and Economic Costs of Climate Change on Enery in Europe}}, institution = {Stockholm Environment Institute}, year = {2011}, url = {https://www.sei.org/mediamanager/documents/Publications/sei-climatecost-energy.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }