The impact of different climate scenarios on European city economies

The impact of policies to address climate change cannot be discussed only in national terms. There will be variations by region. Cities overall are likely to retain or increase their growth premia over national economies, but some will suffer. And our modelling of very local geospatial variations in Europe also shows that, in a scenario where no actions are taken to avert climate catastrophe, some of Europe’s cities are in danger of extreme economic damage.

What you will learn:

• As climate moves to the forefront of government policy, we continue to build our research capabilities to help organisations understand how mitigation policies to meet net zero emissions and global warming will impact the economy. Our latest analysis adds a local dimension to our existing national-level climate scenarios which link the economy, the energy system, and the environment.
• Cities and regions more reliant on carbon-intensive industrial sectors will face the most significant challenges from climate adjustment measures. This means the burden of transition risks tends to fall more heavily on some of Europe’s less affluent regions, particularly those in central and eastern Europe, which maintain a traditional industrial base.
• In contrast, most of Europe’s major city economies are characterised by high-value ICT and financial and business services, and so are much less reliant on the carbon-intensive sectors. Nevertheless, disparities exist between cities, and each will face a different growth trajectory under each scenario reflecting their unique sectoral composition and inter-regional dependencies.