Study: Climate change could cost Germany hundreds of billions

According to a study, Germany could face costs of up to 900 billion euros as a result of climate change by the middle of the century.

Study: Climate change could cost Germany hundreds of billions

According to a study, Germany could face costs of up to 900 billion euros as a result of climate change by the middle of the century. This is the result of a study presented by the Federal Ministries for the Environment, Economics and Climate Protection on Monday in Berlin. For the period from 2000 to 2021, the material damage as a result of global warming is estimated at at least 145 billion euros. "Climate changes already have very serious economic consequences, and these consequences can increase massively," said Parliamentary State Secretary in the Federal Ministry for Economic Affairs and Climate Protection, Stefan Wenzel (Greens).

Scenarios, not predictions

In the paper entitled "Costs from the consequences of climate change in Germany", the Institute for Ecological Economic Research (IÖW), the Society for Economic Structural Research (GWS) and Prognos AG run through various scenarios for the period from 2022 to 2050, which differ in their intensity vary depending on the extent of global warming. In the best-case scenario, this would result in costs of 280 billion euros. The results are not to be understood as a prediction, but are intended to give an impression of what could happen under certain assumptions.

According to the models, the average annual costs of extreme events such as heat and flooding over the past twenty years would increase by a factor of one and a half to five times each year up to 2050. According to the study, without taking precautions to adapt to global warming, there would be losses in economic output.

What are the costs

In addition to direct damage such as falling agricultural yields and rising prices, there are also indirect costs, for example in the health system, through lost work and the disruption of supply chains. At the same time, according to the authors, the determined values ​​represent lower limits, since not all consequences of climate change can be measured in terms of costs and represented in the model. Added to this are, for example, the loss of quality of life and biodiversity as well as deaths and unexpected events such as the corona pandemic or the Ukraine war. "It is therefore to be expected that the costs of climate change may be significantly higher than those determined by the scenarios in the model context," the study says.

Costs so far

For the period between 2000 and 2021, the researchers have calculated costs of at least 145 billion euros for Germany, 80 billion of which since 2018. The flood disaster in North Rhine-Westphalia and Rhineland-Palatinate in July 2021 with over 40 billion euros accounts for an important part . The information was based on cautious assumptions that went back to insurance data, among other things, said Thomas Korbun from the IÖW. Many damages are not insured at all.

How climate change can be felt in Germany

The earth has already warmed up by about 1.1 degrees compared to pre-industrial times, in Germany it is even 1.6 degrees. Scientists do not attribute individual events with certainty to climate change. However, it has been proven that global warming is leading to more frequent, longer-lasting and more pronounced weather events such as heavy rain and floods, heat waves and droughts. Floods often attract more attention, but according to the Climate Ministry, 99 percent of the at least 30,000 additional deaths due to extreme weather in Germany since 2000 can be attributed to heat.

While heavy rain mainly leads to destruction of buildings and infrastructure and in private households, heat and drought hit agriculture and forestry in particular. Both make the transport of goods more difficult, for example due to falling water levels in rivers, and affect industry and trade. According to the Climate Ministry, the consequential costs of drought and heat are considerable: one euro of direct damage is offset by consequential costs of up to 70 cents - floods only result in consequential costs of around 20 cents per euro.

Adaptation to global warming

According to the study, measures to adapt, such as more green spaces in cities, could reduce the purely economic costs, measured as a loss in economic output, by 60 to 100 percent. The general manager of the General Association of the German Insurance Industry (GDV), Jörg Asmussen, explained: "In our view, the economic consequences caused by climate change and extreme weather events can only be reduced through climate-adapted construction."

Wenzel warned: "Inaction is much more expensive than action." In anticipation of rising sea levels, the dykes on the German coast have already been raised by a meter, and in the southern area of ​​the Elbe by as much as two meters. The sewage system, which is quickly overwhelmed by heavy rain, would also have to be adapted and bridges planned to be wider. State Secretary for the Environment Christiane Rohleder (Greens) said that green districts in cities could also help. "They dampen the heat, keep the humidity in the city, and also lead to less radiation."

what the government is planning

By 2030, according to the Climate Protection Act, German emissions of greenhouse gases should fall by at least 65 percent compared to 1990. By 2045, the country should be climate-neutral, i.e. not emitting more greenhouse gases than are broken down again. From 2050, Germany wants to absorb even more greenhouse gases than it emits - bogs, for example, can help as natural CO2 storage.

In addition to the expansion of renewable energies, the federal government also wants to promote adaptation to the consequences of climate change. The Ministry of the Environment is developing a draft law and a long-term strategy for this. There is an "enormous need for financing" both for climate protection and for adaptation, said Rohleder. The Ministry of the Environment is therefore examining greater financial participation by the federal government, for which the Basic Law would have to be changed.