Climate disasters cost Spain €65 billion in 20 years

Spain has spent €65 billion on natural disasters linked to climate change in just two decades, according to a new report from the country's fiscal watchdog. The Independent Authority for Fiscal Responsibility (AIReF) says floods, droughts, wildfires, and other extreme weather events are becoming more frequent and expensive for the state. The report, published Wednesday, analyzes how environmental risks are straining public budgets. While economic shocks like energy price spikes remain the biggest threat to Spain's finances, AIReF warns that climate-related costs are rising fast. Between 2005 and 2025, the government spent €16.5 billion on emergency repairs and aid to victims, €12.8 billion on insurance payouts, and €35 billion on other response costs, including the COVID-19 pandemic. The worst single event was the 2024 DANA storm in Valencia. It cost €8 billion from the state's contingency fund and €4.2 billion in insurance compensation. AIReF notes that "environmental risks are one of the main sources of real fiscal risk in Spain." The watchdog used artificial intelligence to analyze government records. It found 437 disasters and 1,555 related issues, from the 2011 Lorca earthquake to Storm Filomena in 2021. AIReF recommends the government improve data collection, better measure fiscal costs, and create a strategy to reduce these risks. Separately, the report highlights legal risks. Court rulings against the state cost €14.4 billion in 2024 and 2025 alone, mainly due to a ruling on mutual insurance schemes and corporate tax refunds. AIReF also flagged public loan guarantees. By the end of 2025, €24 billion in COVID-era loans remained outstanding, with €7.5 billion at risk of default.