Italy's economy could face a mounting toll from Earth's warming through damaged crops and infrastructure and through weaker growth and added pressure on the country's already enormous debt burden.
A new study estimates that climate-related damage may cut Italy's economic output by as much as 6% by 2050.
What's happening?
In the researchers' main scenario, and without stronger efforts to reduce pollution and adapt to worsening conditions, Italy's GDP in 2050 would be 2.2% to 6.0% lower than it would be in a world without climate damage, according to Reuters.
Even under a more optimistic growth scenario, the blow would still be significant, with GDP expected to come in 1.6% to 4.2% below that baseline.
Researchers said the economic pain would not stop at slower growth. They warned that climate impacts can shrink the tax base, raise concerns about debt sustainability, and increase borrowing costs through what they called a "climate spread."
Massimo Tavoni, director of the European Institute on Economics and the Environment at the Euro-Mediterranean Center on Climate Change and one of the study's authors, summarized the threat plainly: "We find that climate risk is also a sovereign risk."
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Why does it matter?
The report arrives as Europe faces a punishing stretch of heat. Reuters said recent temperatures have soared far above seasonal norms and have been linked to thousands of deaths across the continent.
Italy is especially exposed because it has dealt with weak growth for years, and Reuters noted that it also carries the euro area's largest public debt burden, at roughly 138% of GDP this year.
That combination leaves the country with less room to absorb future shocks. If a chaotic climate damages the economy, government revenue could decline just as public spending needs rise.
That can translate into higher financing costs and a steeper challenge in maintaining economic stability.
The study also warned, as Reuters reported, that the impact across Europe will be uneven, with southern and eastern countries likely to face larger losses than some of their neighbors.
What's being done?
The researchers said the outlook can be improved with stronger climate policy and practical adaptation measures, which could limit the economic damage and reduce debt-related risks.
"Delaying action means increasing the economic cost of global warming," said Matteo Calcaterra, another author of the report, according to Reuters. "Acting promptly means protecting the country's growth trajectory and the long-term sustainability of its debt."
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