Quantitative estimates of the economic damages of climate change usually are based on aggregate relationships linking average temperature change to loss in gross domestic product (GDP). However, there is a clear need for further detail in the regional and sectoral dimensions of impact assessments to design and prioritize adaptation strategies. New developments in regional climate modeling and physical-impact modeling in Europe allow a better exploration of those dimensions. This article quantifies the potential consequences of climate change in Europe in four market impact categories (agriculture, river floods, coastal areas, and tourism) and one nonmarket impact (human health). The methodology integrates a set of coherent, high-resolution climate change projections and physical models into an economic modeling framework. We find that if the climate of the 2080s were to occur today, the annual loss in household welfare in the European Union (EU) resulting from the four market impacts would range between 0.2–1%. If the welfare loss is assumed to be constant over time, climate change may halve the EU's annual welfare growth. Scenarios with warmer temperatures and a higher rise in sea level result in more severe economic damage. However, the results show that there are large variations across European regions. Southern Europe, the British Isles, and Central Europe North appear most sensitive to climate change. Northern Europe, on the other hand, is the only region with net economic benefits, driven mainly by the positive effects on agriculture. Coastal systems, agriculture, and river flooding are the most important of the four market impacts assessed.

This paper examines future climate change scenarios for the Mediterranean region using the Tourism Climatic Index. Currently, an estimated 100 million tourists visit the Mediterranean region annually, largely because of its favourable climate. Experiments with climate change scenarios suggest likely changes, with the Mediterranean becoming too hot in summer, with northern Europe having a more attractive climate, and with the Mediterranean becoming a more pleasant destination in spring and autumn. These spatial and temporal changes in climatic attractiveness could have major impacts on the sustainability of tourism development. Preliminary results for the case study of the Balearic Islands suggest that changes are likely to be detrimental from an economic and social point of view, and neutral or favourable from a resource management and biodiversity perspective.

Much research has been devoted to quantifying optimal or unacceptable climate conditions both generally and for specific tourism segments or activities over the last 10 years. This knowledge is not incorporated in the Tourism Climate Index (TCI), which has also been subject to other substantial critiques. To more accurately assess the climatic suitability of destinations for leisure tourism, the Holiday Climate Index (HCI) was developed. A major advancement of the HCI is that its variable rating scales and the component weighting system are based on this aforementioned literature of tourists’ stated climatic preferences. This paper will discuss the design of the HCI and how the limitations of the TCI were overcome. It then presents an inter-comparison of the results from HCI:Urban and TCI for geographically diverse urban destinations across Europe. The results illustrate how the HCI:Urban rates the climate of many cities higher than the TCI, particularly in shoulder seasons and the winter months, which is more consistent with observed visitation patterns. The results empirically demonstrate that use of the TCI should be discontinued.