The economic cost of clearing up for damage caused by climate change reached €2.5 billion last year, and that is excluding the impact on health and wellbeing, the Central Bank of Ireland and Climate Change Advisory Council have warned.
Since 2022, the cost of climate change has risen by eight percent per year, according to their joint report.
They also warn that the deployment of climate adaptation finance is “below what is required” to address the escalating risks posed by climate change.
That means Ireland may need to spend billions adapting to climate change, but the exact number is difficult to estimate.
“Adaptation expenditure needed in Ireland could range from as low as €250 million per year to as much as €2.2 billion per annum up to 2030”, the authors say.
But the need to act has been brought home by intense storms and flooding over the past year.
“Recent storms, including Storm Darragh and Storm Éowyn, have exposed vulnerabilities to extreme weather and revealed gaps in preparedness…The final insurance claims for damages were €301 million, making it the most expensive weather event in Irish insurance history.”
“Overall, economic losses in Ireland from flood and windstorm events in 2024 – covering both direct and indirect costs – was €1.6 billion and €2.5 billion, respectively”, the report says.
“The development of resilient infrastructure, storm resistance in coastal defences, drought-resistant crops, nature-based solutions, early warning systems and community resilience building would be transformative for our society saving lives and protecting livelihoods”, says Professor Peter Thorne, Chair of the Climate Change Advisory Council’s Adaptation Committee.
He says finding the money to pay for that resilience will need to come from both the public and the private sector.
“By addressing barriers, mobilising public and private finance, and implementing innovative solutions, Ireland can build a more resilient economy and society while reducing risks to the financial system.”
Vasileios Madouros, Deputy Governor of Monetary and Financial Stability for the Central Bank of Ireland, said:
“Climate change poses risks to the financial system and the long-term stability of our economy. We’re already seeing the impact extreme weather has on communities, businesses and infrastructure, and we recognise the importance of addressing climate-related risks, including the growing need for investment in adaptation measures.
“This joint report proposes actionable steps to build resilience in the economy by increasing the deployment of adaptation finance in Ireland. Safeguarding Ireland’s financial stability in the face of a changing climate requires collaboration across public and private sectors, enabling investment at both national and local levels, and further assessing the short and long-term costs of climate adaptation.”