Climate change could cause economic damages of up to €900 billion by 2050 in Germany, according to a recent study conducted by research companies Prognos and GWS in collaboration with Germany’s Institute for Ecological Economic Research.
The study computed three scenario calculations, depending on the severity of climate change, all of which show that the increase of extreme weather events will cause costs to rise significantly by the middle of the century. The research estimates economic damages of between €280 billion, if climate change is mild, and €900 billion, if climate change is strong.
The consequences of climatic changes have long been felt in Germany, but extreme weather events have increased in recent years.German Federal Ministry for Economic Affairs and Climate Action
“In addition to the hot summers, which cause problems for many people, climate change is primarily affecting the availability of water: both too much and too little water can have catastrophic consequences”, the German Federal Ministry for Economic Affairs and Climate Action said in a statement. “This became visible in the droughts of recent years, which had a massive impact – especially on agriculture, forestry and forests.”
Climate damages are not new for Germany. The research revealed that, between 2000 and 2021, the country suffered over €145 billion in extreme weather related costs, almost one third of that being just in 2021 and over half in just the past 5 years.
The flood disaster in July 2021 showed the consequences of an extreme precipitation event that is becoming more likely due to climate change.German Federal Ministry for Economic Affairs and Climate Action
The predictions only took into account direct financial impacts, like loss of agricultural yields, damage or destruction of buildings and infrastructure due to heavy rain and flooding, impairment of goods transportation and impact on the health system. Costs that are not immediately visible, like deaths and loss of biodiversity were not included.
Despite the dim looking prospectives, the research showed that the economic damage of climate change can be reduced completely (weak climate change), by 80% (medium climate change) or by 60% (strong climate change) by purely monetary investments in adaptation measures and thus reduce vulnerability to climate change impacts. “Carbon storage in vegetation and soil by preserving forests and moors can both reduce greenhouse gas emissions and contribute to adaptation to climate change”, the report exemplified.
However, the report highlighted the challenges of investments in climate adaptation, as they have to be made without precise knowledge of how severe climate change will actually be, how many extreme weather events will occur, where and to what extent. Thus, any precise estimates of the exact costs are hard to foresee.