Climate change is gradually turning everything into a luxury. Water has been a scarce resource for decades, and now it is becoming clear that a comfortable room temperature is also becoming a luxury for more and more people. Particularly in southern Europe, where incomes are lower than in the north, the need for costly cooling is on the rise.

Whilst the average income in Luxembourg in 2024 stood at around 50,000 euros and in Norway at just over 40,000 euros, people in Italy earned 20,000 euros and in Greece just under 11,000 euros. At €27,700, Germany is above the European average of €23,800 (source: Eurostat).

However, it would be a fallacy to conclude from income alone whether the heat is driving people to ruin. Indoor air temperature is usually raised or lowered by air conditioning systems. Air conditioning systems require electricity. It therefore depends not only on how many days a year the indoor temperature is artificially lowered to a comfortable level, but also on the cost of the electricity required to do so.

Electricity prices in Europe: Germany at the top

In 2024, Germany topped the list for the average electricity price at 39.4 cents/kWh, followed by Denmark at 37.6 cents/kWh. The European average was 28.7 cents/kWh.

What follows are some illustrative examples to determine how the relationship between income and electricity prices affects residents of lower-income countries. In 2024, the average income in Germany was around 16.4% above the European average. However, the electricity price in Germany exceeded the European average by 37.3%. This means that, in Germany’s case, the gap between income and electricity costs had a disproportionately large impact.

What was the situation in Italy in 2024? The average income in Italy was approximately 16% below the European average. At 31.1 cents per kWh, the price of electricity in Italy, however, exceeded the European average by 8%. For Italians, rising temperatures therefore also mean significantly higher expenditure on air conditioning.

Greece, with a significantly lower average income than many other European countries, had an electricity price of 23.1 cents per kWh, which was 24% below the European average. This mitigates the 51% shortfall compared to the European average somewhat, but still means that Greeks have to spend significantly more on electricity in relation to their income (source: strom-report).

To make matters worse, the number of hot days in southern Europe is set to increase.