As natural disasters intensify and on the eve of COP29, INSEE has published an assessment of the economic costs of global warming for France. Trillions of billions of euros are at stake for the decarbonization of the economy and the environmental damage accumulated since the industrial era, placing public finances and households facing unprecedented challenges.
The historical cost of CO₂ emissions
A few days before COP29 in Azerbaijan, the financial impact of climate change is increasingly palpable. INSEE presented “augmented national accounts” integrating new climate indicators. This new accounting approach aims to estimate the economic effects of CO₂ emissions, including both “imported emissions” generated by French consumption of foreign products and unaccounted “exported emissions”.
The study reveals an impressive figure: since the industrial era, France's climate responsibility represents nearly 7,000 billion euros. In 2023 alone, the French carbon footprint would have cost 113 billion euros, a bill that breaks down into direct costs of CO₂ emissions and secondary impacts, such as loss of agricultural productivity and expenses linked to natural disasters .
Jean-Luc Tavernier, Director General of INSEE, stressed during a conference that this new tool would make it possible to “ pushing the boundaries of national accounting », taking into account environmental costs. While these indicators will not replace GDP, they will provide essential information for evaluating the country's climate policy.
Cascading economic losses
To achieve carbon neutrality in 2050, France will have to mobilize 929 billion euros, according to INSEE. This amount, which integrates the objectives of the national low carbon strategy (SNBC), represents an unprecedented budgetary pressure, with investments estimated at 70 billion euros per year until 2030. The Pisani-Ferry and Selma Mafhouz report had moreover highlighted these financing needs in a tense economic context, where the State is seeking to reduce its public spending.
The budgetary restrictions adopted by the Barnier government, however, complicate the implementation of this transition. The drastic cuts planned in the Ministry of Ecological Transition have caused great tensions within the executive. Minister Agnès Pannier-Runacher notably took a position to defend the credits allocated to her ministry in the face of the demands for budgetary rigor. At the same time, parliamentary debate is intensifying around the taxation of large companies and the wealthiest households, while new sources of financing are necessary to support the green transition.
The damage associated with French emissions in 2023 amounted to 94 billion euros. This estimate includes direct environmental impacts, but also expenses to respect the carbon budget, that is to say the emissions threshold making it possible to limit the rise in temperatures. If we add the effects on health and mortality, the impact could rise to 127 billion euros, a cost that worries state financial officials.
In this context, the European Central Bank (ECB) plans to support the economy by easing its monetary policy, which could relieve businesses and households. However, the transition to a low-carbon economy requires sustainable financing and profound reforms. France is thus faced with a dilemma: maintaining a strict budgetary policy while financing the climate emergency.
