all projects

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

2023

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). Our partners 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 team 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 was 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?

Prognos calculated the costs of climate change incurred in Germany to date, while our project partner GWS examined the future costs. The GWS scenario analysis shows the damage that progressive climate change could cause for Germany by 2050 or 2100.

Scenario analysis until 2050 (website GWS, in German)

Specifics 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 Prognos 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)

Summary of the results (PDF)

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)
 

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 & 4: Detailed examination of the summer heatwaves 2018/2019 (PDF)

Flood 2021 detailed investigation (PDF)

Flood and heatwave comparison (PDF)

Summary of extreme weather damage since 2018 (PDF)

Press release of the BMWK/BMUV

Summary of the results (PDF, in English)

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

Last update: 20 March 2023

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.

Kosten durch Klimawandelfolgen in Deutschland

2021
| Neues Projekt

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

Mehr Studien & Projekte zu diesem Thema

More studies & projects on this topic

Five challenges: How Europe remains competitive in the future

2024
| Expertise

What needs to happen for Europe to survive in global competition? We analysed this at the “12 Minutes Europe – Meeting Global Challenges” event organised by the Austrian Federal Economic Chamber.

Harnessing Talent Platform: Technical support in progress

2024
| Project update

The Harnessing Talent Platform supports selected regions within the EU that are particularly affected by demographic change and the brain drain. The technical support that Prognos is providing in some regions has now been launched with kick-off meetings.

KreativLand Baden-Württemberg

2024
| Project

Creatives in the countryside? As scientific partner in the model project KreativLand Baden-Württemberg, Prognos examined the status quo, the opportunities and the challenges facing creatives living and working outside of the urban centres and regions.

Support for the Just Transition Platform

2024
| Project

Through the Just Transition Platform (JTP), the EU supports the member states and regions in achieving their climate targets in a fair manner. Prognos provided the JTP with in-depth analyses and knowledge management.

Innovation Index Germany 2023

2024
| Project

Once again, Prognos has compiled the Innovation Index Germany on behalf of the Vodafone Institute for Society and Communications. The index quantifies the impact the expansion of Germany’s digital infrastructure has had on its innovation strength.

Status Report on the German Recycling Economy 2024

2024
| Project

The 2024 Status Report gives a comprehensive picture of the whole Recycling Economy sector and its future challenges.

Regional purchasing power of pensions

2023
| Project

Where in Germany is retirement particularly cheap and where has it become more expensive than average? Prognos examined this for the German Insurance Industry Association.

Indicators of equal living conditions

ongoing
| Project

The establishment of equal living conditions in Germany is one of the goals being prioritised by the Federal Government. But how can the equivalence of living conditions be measured? Prognos develops a set of indicators.

Value added of German pharmaceutical exports

2023
| Project

Compared to other export sectors, German pharmaceutical exports show above-average levels of innovation and value-added intensity. However, the industry is falling behind in the global re-search competition. This is shown by a new study commissioned by Roche.

Climate path implementation in Baden-Württemberg

2024
| Project

In Baden-Württemberg, emissions are to be reduced by a further 23% by 2030. As part of a multi-stage concept, Prognos examines the challenges and opportunities for action in the transfor-mation context.

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.

Learn more