Climate change may shrink Italy's GDP by over 5 pct by 2050: Budget Office

ROME - Climate-related damage could reduce Italy's gross domestic product (GDP) by over 5 percent by 2050 if mitigation policies remain unchanged, the Parliamentary Budget Office (UPB) warned Wednesday.

Italy's long coastline, water stress, and reliance on agriculture make it particularly vulnerable to climate change. According to the UPB's annual report, floods, droughts, wildfires, and heatwaves have already cut GDP by 0.2 percent in 2023. Under a "no-policy-change" scenario, the economic impact could reach 5.1 percent by 2050.

By contrast, meeting carbon neutrality goals could limit the GDP contraction to 0.9 percent, the UPB said. It also projected that the number of extreme weather events could increase sixfold by 2050 without stronger climate action, but only double under a net-zero emissions' path.

The report urged greater investment in green energy, efficiency, and climate adaptation, though UPB President Lilia Cavallari noted funding challenges amid global uncertainties and trade disruptions.

Italy's economy is expected to grow by just 0.6 percent in 2025, down from earlier forecasts of 1.1 percent.

In recent years, Italy has faced mounting climate-related losses, including deadly floods, large-scale wildfires, and severe damage to agriculture. A 2023 flood in Emilia-Romagna killed 17 and displaced thousands.