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Estimation of costs resulting from climate change in Germany

Client

Federal Ministry for Economic Affairs and Climate Action (BMWK) and Federal Ministry for the Environment, Nature Conservation, Nuclear Safety and Consumer Protection (BMUV)

Year

2022

Partner

Institute for Ecological Economy Research (IÖW) and the Institute for Economic Structures Research mbH (GWS)


The assignment

The exceptionally hot and dry summers of 2018 and 2019, as well as the devastating flash floods and floods in July 2021, in particular on the Ahr and Erft rivers, have once again made it clear: Extreme weather events are no longer confined to elsewhere in the world, Germany is also affected.

Until now, an overall picture of the economic climate change-related losses and adjustment costs in the form of studies has not been available.

The project “Costs due to climate change impacts in Germany” was commissioned or accompanied by the Federal Ministry of Economics and Climate Action (BMWK) and the Federal Ministry for the Environment, Nature Conservation, Nuclear Safety and Consumer Protection (BMUV). Other participants in the project are the Institute for Ecological Economy Research (IÖW) and the Institute for Economic Structures Research mbH (GWS).

Against the background of a highly complex situation as well as fragmented and in part incomplete data, a consolidated overall picture of the economic damage costs caused by climate change was drawn. So far this is something that politics has been lacking. The project teams benefited from the different specialist expertise of the organisations involved and the scientific review team of recognised climate experts (Prof Dr Dea Niebuhr, Prof Dr Annegret Thieken, Dr Olaf Burghoff, Dr Horst Gömann, Dr Markus Groth, Dr Leonie Wenz).

The aim of the investigations is to find answers to questions in three areas:

  • How does climate change-related damage occur, which of the many complex effects of climate change is at all suitable for calculating the damage, and how can these be recorded or structured?
  • What losses have already been caused by extreme weather events in Germany in the past?
  • What losses can Germany expect by 2050 and 2100, respectively, as a result of progressing climate change? This question is being investigated by project partner the Institute for Economic Structures Research mbH (GWS).

Specificity of the project

  • Systematic analysis of the subsequent costs of climate change for the German economy despite the highly complex situation and a fragmented and sometimes incomplete data situation
  • A detailed look at past extreme weather events
  • Modelling future costs
  • A comprehensive review process

All the studies are linked below – as well as all PDFs in an overview.

Our approach & methodology

Our research team for climate adaptation first developed an overview of past extreme weather events and the resulting financial damage since 2000. In the next step, an analysis path was created that represents the selection process for the detailed examination of extreme events. As a result, detailed evaluations of the heatwave summers of 2018 and 2019 and the floods in 2021 were made.

Extreme weather damage summary (Report 1)

A consolidated loss summary was drawn up based on material damage caused by relevant extreme weather events in Germany in the period from 2000 to 2021. As far as possible, damage caused by individual events was broken down to individual loss indicators and assigned to DAS (German Strategy for Adaptation to Climate Change) fields of action. Equally, an overview of available data sources about the losses caused by extreme weather events was given in advance. This helps in understanding the reported damage amounts and their calculation.

The calculations only include events to which a resilient damage value could be assigned within the framework of the database-based research or for which an independent quantification was carried out within the framework of the project. Losses for which no such data was available were explicitly not recorded. This includes, for example, losses in forestry for 2020.

Overview of past extreme weather damage (PDF, in German)
 

Selection of examination events (Report 2)

The subject of this project report is the establishment and application of an analysis path that represents the selection process for the detailed investigation of an extreme event. The extreme weather event selected on the basis of this process provides the starting point for further analyses used for recording the costs of climate change consequences in Germany. It is shown that both a joint study of the heat and drought extremes of 2018 and 2019 and the floods of July 2021 are suitable subjects for investigation.

Selection of examination events (PDF, in German)
 

Detailed surveys of heatwave summers and floods (Reports 3 and 4)

Heatwave & drought 2018/2019

In the detailed survey of the summers of 2018/2019, the project team compiled specific loss indicators for the analysis and quantification of the economic costs of the summer heatwaves and droughts in 2018 and 2019. The literature is based on Germany's climate impact and risk analysis as well as the monitoring report on the German Strategy for Adaptation to Climate Change.

Based on identified indicators, the study quantifies:

  • Loss of winter wheat yield due to heat and drought
  • Loss of silage maize yield due to heat and drought
  • Loss of yield from other crops due to heat and drought
  • Heat and drought impairing the quality and availability of wood
  • Impact on forest ecosystem services – costs due to losses in climate protection performance
  • Heat-related reduction in labour productivity

On the basis of the indicators, an order of magnitude of the overall economic damage caused by the summer heatwaves and droughts of 2018 and 2019, which have become demonstrably more likely as a result of climate change, is determined. This also includes indirect (consequential) losses, for example due to the breakdown of or increase in the cost of intermediate consumption in other areas.

In addition, the number of heat-related deaths for the years 2018 and 2019 was determined on the basis of a method for determining excess mortality on particularly hot days. A quantification or monetisation of the determined heat-related deaths has deliberately not been carried out.

Detailed examination of the summer heatwaves 2018/2019 (PDF, in German)

Flood 2021

In the detailed examination of the 2021 flood disaster, a consideration is given to the monetary damages which occurred through the flash floods and floods on the Ahr and Erft rivers in North Rhine-Westphalia and Rhineland-Palatinate, but also through further floods in Bavaria and Saxony.

The study draws on existing information about direct damage (including the BMI and BMF 2022 and the request for assistance from the EU Solidarity Fund) and supplements this with other sources, in particular scientific studies on the damage structures of similar events. It thus breaks down the extent of the damage in a top-down view to specific categories of damage or losses and DAS (German Strategy for Adaptation to Climate Change) fields of action. Indirect costs are estimated by means of multipliers from the literature, which show the ratio of direct to indirect costs at economic sector level. For this purpose, the direct losses are allocated to the economic sectors on the basis of information on the claims structure. The sum of all economic sectors gives the estimated level of losses of the indirect costs.

Statements about how much of a role climate change plays in the losses caused by flash floods and floods are limited: Thus, a connection was established between climate change and an increased probability of the occurrence of an event by a factor of 1.2 to 9 (Kreikamp et al., 2021). This wide range, as well as methodological uncertainties in the attribution of statistically extremely unlikely individual events make it difficult to calculate the amounts of losses caused by climate change on a pro-rata basis.

Flood 2021 detailed investigation (PDF, in German)

Flood and heatwave comparison (PDF, in German)
 

Core results

The research carried out by the project team shows that tangible losses resulting from extreme weather events, which can be recorded as part of the analysis, amount to at least 80 billion euros since 2018. It is estimated that the summer heatwaves and droughts of 2018 and 2019 will account for 35 billion euros, and the flood disaster in 2021 will account for more than 40 billion euros. The economic losses caused by hail and wind also run into the billions. However, much of the damage cannot be recorded on a monetary basis, which is why the total loss amount is significantly higher than could be recorded by the analyses. In terms of financial losses, the flood disaster particularly affected households, and the hot summers, agriculture, forestry, industry and commerce.

Summary

The results of the project, in short:

Summary of extreme weather damage since 2018 (PDF, in German)

A final event for the project is planned for December 2022 when all results will be presented and discussed.
 

Contact

The Federal Ministry for the Environment, Nature Conservation, Nuclear Safety and Consumer Protection (BMUV) deals with all questions concerning the publication:

E-mail: presse@bmuv.bund.de | Phone: +49 030 18-2010


All PDFs in one overview for download (in German)

Report 1:
Overview of past extreme weather damage (PDF)

Report 2:
Selection of examination events (PDF)

Report 3 and 4:
Detailed examination of the summer heatwaves 2018/2019 (PDF)

Flood 2021 detailed investigation (PDF)

Flood and heatwave comparison (PDF)

Summaries/Results:
Summary of extreme weather damage since 2018 (PDF)

Press release of the BMWK/BMUV

Project team: Dr Jan Trenczek, Oliver Lühr, Lukas Eiserbeck, Myrna Sandhövel, Viktoria Leuschner

Last Update: 18 July 2022

Project updates

Diskussion mit Akteurinnen und Akteuren zum Projektauftakt

| Event

Wie kann das ökonomische Verständnis von Klimawandelfolgen gestärkt werden? Zu dieser Frage fand im Kontext des Projektes „Folgekosten durch den Klimawandel“ am 19. Mai ein Workshop mit Akteurinnen und Akteuren statt.

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In einem zweieinhalbjährigen Forschungsvorhaben analysiert das Projektteam IÖW, GWS und Prognos systematisch die Folgekosten des Klimawandels für die deutsche Volkswirtschaft.

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About us

Prognos – Providing Orientation.

Prognos is one of the oldest economic research centres in Europe. Founded at the University of Basel, Prognos experts have been conducting research for a wide range of clients from the public and private sectors since 1959 – politically independent, scientifically sound.

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