Europe proposes a law to plan for climate risk

What happened in summer 2026?

Almost no part of Europe escaped damaging climate extremes in summer 2026. Wildfires have burned about 700,000 hectares and destroyed 12 million tonnes of crops so far. Several rivers fell to critically low levels, which affected transport and energy security. Preliminary figures show more than 35,000 heat-related deaths in the countries that reported data, including the Netherlands. The heatwaves carry an estimated output cost of 113 billion euros a year across 30 countries. Annual losses from climate extremes over the past four years were around 50 billion euros, up from 8.6 billion in the 1980s. These figures describe what has already happened. The Commission expects the coming summers to be hotter still.

What would the law change?

The proposed law would make projected future climate conditions the starting point for planning. It sets a reference path for global warming: 1.5°C above pre-industrial levels by 2030, 2°C by 2050 and 3°C by 2100. This is a projection, not an observation, and it assumes that current global policy commitments stay in place. Governments would use the path as the baseline for decisions on policies, assets and investments, and add more detailed risk assessments on top. They would also have to be clear about who is responsible for each climate risk. Each country would draw up one national plan, which replaces four existing planning instruments. The Commission plans its own European plan for the third quarter of 2028. It also wants to review countries’ progress every two years.

Which tools can help you explore the risks?

The Commission is launching three online tools, which it plans to bring together in one European platform for climate resilience. The European Climate Viewer uses European climate data and projections. It turns the reference warming path into local information on projected hazards. For example, users can explore what a world 2°C warmer in 2050 could mean for heatwaves and the water shortages that follow. The Navigator of Climate Resilience Tools helps people, businesses and authorities find the tools that fit their needs. The Solutions Explorer shows measures that others have already put in place, including how they were paid for and what they achieved. The viewer shows hazards for now. The Commission plans to add exposure, vulnerability and the effect of resilience measures over time.

What does it mean for finance and insurance?

The framework includes several steps that affect valuation, investment and insurance. The Commission wants to work with European and international bodies to include material physical climate risks better in asset valuation and accounting. A European investment bank plans to screen assets and investments for climate risks with a new open-access hazard tool. The same bank plans at least 30 billion euros for climate adaptation between 2026 and 2030. Insurance shows a large gap, because historically only around 25 per cent of natural catastrophe losses in the European Union were insured. A new Climate Insurance Alliance of insurers, reinsurers and public authorities should deliver its first measures by the end of 2027. The Commission estimates that Europe needs about 70 billion euros of investment per year. It says this can return 2 to 10 times its value in avoided losses.