Climate change to cost Germany up to $960bn by 2050, study finds

Report released during the discussion on how Berlin can reduce greenhouse gas emissions in challenging sectors such as transport.

Climate change could cost Germany up to 900 billion euros ($960 billion) in cumulative economic damage by the middle of this century, a new study shows, as Europe’s largest economy looks for ways to lower that bill.

The analysis by economic research firm Prognos, the Institute for Economic Structures Research and the Institute for Ecological Economic Research was released Monday as Berlin works on a climate adaptation strategy that will soon be presented by the Ministry of the Environment.

Germany’s economics and environment ministries quoted from the study showing that extreme heat, drought and flooding could cost between 280 billion euros ($300 billion) and 900 billion euros between 2022 and 2050, depending on the degree of global warming.

Costs include declining agricultural yields, damage to or destruction of buildings and infrastructure due to heavy rainfall and flooding, hindrance to freight transport and impacts on the health system.

The scenarios are not exact predictions because some of the impacts of climate change, such as reductions in quality of life, are difficult to quantify economically.

“Climate change costs may turn out to be much higher than determined by the scenarios in the model,” the study said.

Climate change and extreme weather have already cost Germany at least 145 billion euros ($155 billion) between 2000 and 2021, of which 80 billion euros ($85 billion) in the past five years alone, including the 2021 floods in the states of Rhineland-Palatinate and North Rhine-Westphalia, the Ministry of Economic Affairs said.

The cost of expected damage could be completely reduced by climate adaptation measures, such as carbon sequestration, if only climate change were mild, the study found. the climate would change dramatically.

The report did not mention how much climate adaptation measures could cost the federal and state governments.

Environmentalists say Germany’s climate policy has taken a back seat as Europe grapples with an energy crisis, partly triggered by Russia’s invasion of Ukraine.

For many European countries, including Germany, the crisis is forcing a return to dirtier fuels, such as coal.