Without further adaptation, climate change could cost 3,6% of French GDP by 2050.

After a summer of 2026 marked by particularly severe heatwave and drought episodes, the Ministry of Economy intends to place the cost of climate inaction at the heart of the next budget decisions.

“Inaction is not an option,” declared Economy Minister Roland Lescure at an event dedicated to climate change adaptation. The Treasury Department is to submit to him, by the end of 2026, a comprehensive report on the economic consequences of climate change and the effects of adaptation policies.

A GDP potentially reduced by 3,6% in 2050

The initial results presented by Bercy estimate the potential decline in French GDP in 2050 at 3,6%, excluding additional measures for adaptation and reduction of greenhouse gas emissions.

This estimate represents the difference between a global warming scenario of 2°C in 2050, consistent with the French reference trajectory for adaptation, and a scenario limited to 1,5°C. It is therefore not a definitive forecast, but rather an assessment of an economic risk dependent on the climate trajectory and the policies implemented.

The decline in activity would stem primarily from a decrease in labor productivity, particularly due to the intense heat, as well as an accelerated depreciation of capital. Buildings, networks, and infrastructure could indeed be more vulnerable to heat waves, droughts, floods, fires, and coastal erosion.

An additional risk to public finances

The slowdown in growth would inevitably lead to a decrease in public revenue. With spending remaining unchanged, the primary public balance could thus deteriorate by 1,8 percentage points of GDP in 2050.

In addition to this indirect effect, there would be expenditures dedicated to compensating victims, repairing public property, and protecting the population. Their scale will depend in particular on how the costs are shared between the state, local authorities, insurers, businesses, and individuals.

Extreme weather events could also necessitate more frequent interventions on schools, healthcare facilities, housing, transportation networks, and public infrastructure. For buildings, the needs include summer comfort, solar protection, ventilation, greening, de-sealing, and flood prevention.

Adaptation can reduce some of the damage

The studies analyzed by the French Treasury Department show that adaptation can significantly limit economic losses. Depending on the methods and solutions examined, most structural models estimate that 5 to 20% of the damage could be avoided. Some econometric studies suggest this proportion could be as high as 50%.

The effectiveness of these measures depends, however, on available technologies, urban planning regulations, the ability of stakeholders to anticipate risks, and the actual trajectory of global warming. In the building sector, the widespread adoption of summer comfort solutions is, for example, one of the levers cited by the Ministry of the Economy and Finance.

"Misadaptation, inaction, and inaction would have a much higher cost than adaptation," said Mathieu Lefèvre, Minister Delegate for Ecological Transition.

Budgetary decisions are expected.

The Government has launched working groups dedicated to financing adaptation and supporting businesses. The Green Fund, intended to support local authority projects, is specifically designed to contribute to the transformation of public facilities and spaces.

These ambitions, however, are hampered by budgetary constraints. The announced reduction of certain programs, particularly in the thermal renovation of schools, is fueling concerns among environmental associations and local authorities.

“As budget debates are about to begin, we urge the government and parliamentarians to strengthen these investments so as not to leave an unsustainable climate debt for years to come,” reacted Anne Bringault, director of programs at the Climate Action Network.

Estimates that are still subject to change

The French Treasury Directorate General clarifies that its calculations are based on climate scenarios from the Network for Greening the Financial System, an international network of central banks and financial supervisors. The assumptions used are subject to revision, while other studies arrive at different, sometimes higher, economic damages.

The final cost will therefore depend on the level of warming, the investments made to adapt territories, and the choices made regarding public funding. However, the initial findings from the Ministry of the Economy and Finance (Bercy) send a clear message: postponing adaptation spending does not eliminate it and risks, in the long run, significantly increasing the economic and budgetary burden.