Climate change could significantly weaken Italy’s long-term economic growth and make its already heavy public debt burden harder to sustain, according to a study released on Wednesday.
Climate-Related Damage
The analysis by the Euro-Mediterranean Center on Climate Change (CMCC) argues that climate-related damage goes beyond the direct hit to economic activity, affecting government finances by reducing the tax base, increasing debt sustainability risks and pushing up borrowing costs through what researchers describe as a ‘climate spread’.
Without additional mitigation and adaptation measures, Italy’s gross domestic product in 2050 could be between 2.2% and 6.0% lower than in a scenario without climate damage, the study found.
The researchers estimate that climate-related impacts could eventually double refinancing risks on Italian public debt, although they stress that the outcome will depend on future climate policies and adaptation efforts.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
