Projected climate impacts and impact-specific damage functions for EU countries: A review and estimation

Macroeconomic impacts of climate change, particularly in Integrated Assessment Models (IAMs), are often modelled using damage functions based on empirically estimated reduced-form relationships between climate and GDP. These functions encompass a range of climate-related damages but are typically aggregated, limiting the ability to discern contributions from individual impact categories. This paper reviews the literature on projected economic and biophysical impacts of various climate-related damages for European Union (EU) member states over the coming decades. The types of impacts considered include coastal and river flooding, labour productivity, drought, agricultural output, energy supply and demand, fisheries, and forestry. For each damage type, we synthesize studies focusing on disaggregated impacts for the EU and use harmonized economic impact indicators to facilitate cross-study comparison. This meta-analysis reveals significant variability in economic impacts depending on the type of damage and across EU member states. For five of these impact categories, we estimate damage functions using the collected data and by testing various functional forms. The study also assesses the robustness of these estimations. This approach aims to make damage functions for different types of impacts more accessible to researchers and policymakers across the EU.