The multi-billion dollar cost of climate change damages to Germany

Extreme weather brought on by climate change have cost Germany about €6.8 billion ($6.8bn) a year, according to a new study.

The report, released at the two-day Petersberg Climate Dialogue in Berlin which began on Monday, said that in the past 20 years, the cost of floods, droughts and other climate change catastrophes to Europe’s largest economy was at least €136bn.

Steffi Lemke, German Minister of Environment, told senior officials from more than 40 countries that the “horrifying scientific data” illustrated the enormous damage and cost of the climate crisis.

“The numbers sound the alarm for more prevention when it comes to the climate,” Ms Lemke said.

The 13th Petersberg Climate Dialogue, under the chairmanship of Egyptian President Abdel Fatah El Sisi and German Chancellor Olaf Scholz, set the stage for preliminary discussions on the big issues before the UN Climate Change Conference, Cop 27, in November in the Egyptian Red Sea coastal city of Sharm El Sheikh.

The study by economic research company Prognos comes as several countries in Europe struggle with huge wildfires that have scorched thousands of acres of land.

The early arrival of an intense heatwave has been blamed for hundreds of deaths. Scientists said such disastrous consequences are consistent with climate change.

According to the study of Germany, floods in the states of Rhineland-Palatinate and North Rhine-Westphalia in 2021 cost more than €40bn in damages. The hot summers of 2018 and 2019 cost Europe's biggest economy another €40bn.

German Foreign Minister Annalena Baerbock described climate change as the world's “biggest security problem”.

“We are all in the same boat, which means that we can only turn the tide together,” she said.

With much of Europe in the grips of a debilitating heatwave, the economic cost of climate change is an increasing concern among all countries, rich and poor.

Damage to homes and business as well as crop production are some of the factors used to calculate economic impact of climate change. Other effects, such as loss of human lives, biodiversity and culture, are difficult to value in monetary terms.

A study released in May by the London School of Economics found that under current policies, the total cost of climate change damages to the UK is projected to increase from 1.1 per cent of gross domestic product at present to 3.3 per cent by 2050 and 7.4 per cent by 2100.

A report in February from the European Environment Agency found that extreme weather events such as heatwaves and floods have cost Europe almost €510bn and about 142,000 lives in the past 40 years.

Last year, a report from global insurance provider Swiss Re expected the effects of climate change to cut between 11 per cent and 14 per cent — as much $23 trillion — off global economic output by 2050 compared with growth levels without climate change.

The subject of climate adaptation and finance for developing countries opened the talks in Berlin and campaigners hoped the issue of loss and damage will be put on the November summit’s agenda.

A target of $100bn in climate financing from developed countries to non-developed countries by 2020 has been missed.

While a new target of 2023 was set, Ms Baerbock stressed the need for developed countries “to live up to our responsibilities and promises”.

The UN Secretary General Antonio Guterres urged rich nations to “stop paying lip service” to the pledge and to keep the promises they have made with regard to supplying funds to tackle the situation.