Economic Impacts of Exemplary Climate Change and Adaptation Effects Under Different Socio-Economic Developments in Germany

Abstract

Three different socioeconomic developments are implemented at the national level in the macro-econometric model PANTA RHEI. While one scenario is oriented towards sustainability, a second one continues current trends. The third scenario is characterized by more dynamic socio-economic development. This paper extends the impact chain methodology. Exemplary climate impacts and adaptation measures from literature are quantified for the transport, energy and health sectors based on literature analyses and entered into the model. These are the interruption of a road due to flooding, cooling water scarcity for power plants due to drought and higher health expenditures. Their quantifications are linked to the three different socio-economic developments. The findings indicate that the economic costs of climate change may vary significantly across different socioeconomic scenarios. Climate impacts generate socio-economic costs that can be reduced by adaptation measures. In the sustainability scenario, the negative economic impacts of climate change are significantly lower than in the other scenarios, especially in the energy and transport sectors. The effects are higher in the case of dynamic socio-economic development. In contrast, socio-economic development plays only a minor role for the effects in the health sector, which are mainly driven by demographic trends. The adaptation measures considered have positive macroeconomic effects, mainly due to lower damages, but also because of the additional investment activity. The model calculations quantify some impacts of climate change under different socioeconomic scenarios and assess the effects of climate risks and adaptation on critical infrastructure.

Received: 1 September 2023 | Revised: 19 December 2023 | Accepted: 5 January 2024

Conflicts of Interest

The authors declare that they have no conflicts of interest to this work.

Data Availability Statement

Data is available on request from the authors.