The climate crisis will be expensive. Since 2018 alone, Germany has paid 80 billion euros for the consequences of climate change. By 2050 it could be between 280 and 900 billion euros, depending on how severe climate change will be. This is the forecast of a study commissioned by the Federal Ministry for Economic Affairs and Climate Protection. The amount of the material and immaterial costs differs significantly from the countermeasures that will be taken in the coming years. Even with adjustments, the consequences could cost billions, but significantly less than without adjustments.
Parliamentary State Secretary Stefan Wenzel (Greens) made it clear: “Climate change is already having serious economic consequences that can increase massively. Every euro invested in climate protection reduces the economic costs that extreme weather events can cause in the future.”
With a look into the past, the researchers have also summarized the costs since 2000, which add up to a total of 145 billion euros. The heat damage in 2018/19 and the flood disaster in 2021 in Rhineland-Palatinate and North Rhine-Westphalia were particularly expensive. Damage such as river floods and flooding due to heavy rain and flash floods are therefore also the largest cost item in the modelling. According to the publication, the flood in the Ahr Valley alone accounts for around 40 billion euros in direct and indirect damage. The greatest damage was caused to private households, at around 40 percent. Destroyed buildings and infrastructure follow. Indirect damage includes, for example, impaired supply chains or the destroyed infrastructure.
In addition, the authors predict high costs due to the “silent” extreme weather such as heat and drought. The hot summers in 2018 and 2019 alone cost forestry and agriculture as well as industry and commerce 21 billion euros.
But the study also records non-material damage and shows it in costs. Extreme weather such as drought, heat or floods increase the number of deaths, more than 180 people died in 2021 in the Ahr Valley alone. There are also health consequences, especially for the elderly and children. Phenomena such as heat also affect the psyche, reduce the ability to work and rob us of sleep. Not least because of this, this dimension should not be neglected. Added to this is the environmental damage such as declining biodiversity or the impairment of ecosystems.
Fighting the climate crisis will cost billions. However, the present study shows that the fewer measures that are taken, the more the costs can increase. In the project “Costs caused by the consequences of climate change in Germany”, the Institute for Ecological Economic Research (IÖW), together with the analysis company Prognos and the Society for Economic Structure Research (GWS), examined the follow-up costs and damage caused by climate change. The project was initiated by the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety and taken over by the subsequent Ministry for Economics and Climate Protection.
Sources: Institute for Ecological Economy Research, Federal Ministry of Economics
