Climate inaction incurs high costs

[Translate to English:] Klima schützen, Kosten vermeiden

Heavy rain events, floods, heatwaves and drought: the climate change impacts already experienced today are causing major costs to society. This is not a distant prospect somewhere on the other side of the globe but is very close to home. The recent flood disaster in Germany’s Ahr valley illustrated this vividly and painfully. It is important to realise that the costs of adapting to climate change or remediating its impacts are not shouldered equally by all sections of the public – this is a key finding of a study recently produced by the Green Budget Germany think tank and the Oeko-Institut research institute on behalf of the German Federal Ministry of Labour and Social Affairs.

The economic impacts often affect people on a low income particularly severely. For instance, food can become more expensive because heavy rain events or heatwaves lead to harvest losses. Or the prices of local public transport rise because local authorities have to pass through the extra costs of remedying damage to infrastructure resulting from storms and flooding. Older people can suffer health issues when extreme heat events occur or excessive heat persists unusually long. Tenants who have to arrange additional indoor cooling to cope with heat events are a further vulnerable group.

To the Oeko-Institut study (only available in German) on the distributional impacts of advancing climate change

Climate action is the only solution

The study outlines climate change impacts in the realms of housing, food and agriculture, transport and mobility, and health, and identifies differences in the effects these have upon specific social groups. For instance, one impact of climate change in the housing sector is that people will have to adapt to a greater number of hot days in the year in their dwellings and will also have to take precautions against flood events or remediate the damage they cause. This affects landlords, who are responsible for remediating the damage, but also tenants, who bear the additional cost of cooling.

The key task is to prevent such effects from the outset. Taking action to mitigate climate change is the solution. It is vital that such actions are socially equitable. In a further study for the Ministry of Labour and Social Affairs, the Oeko-Institut has outlined socially equitable climate actions in the buildings and transport sectors. These include energy performance improvements to buildings under arrangements by which landlords and tenants share the investment costs. They extend equally to actions designed to substantially reduce the price of local public transport. Such activities prevent greenhouse gas emissions while also reducing burdens upon people – this is the only approach that can meet the major challenges of sustainable transformation processes.

Oeko-Institut information (in German) on socially equitable climate actions in the housing and transport sectors

The climate-food nexus: Prevention is better than cure

The scientists have performed an in-depth analysis of food supply impacts. This shows once more that prevention is the best way to deal with climate change. Only if incentives for climate-friendly food supply systems are established early on will it be possible to buffer climate-change-related hardship. If this is not done, harvest losses and their repercussions are likely to cause major rises in the price of food.

Such price increases affect low-income households particularly because they spend a higher percentage of their monthly income on food. “Rapid assistance in such situations will be essential, achieved in part by greater flexibility in social security systems. The Covid pandemic has shown that this can provide temporary and unbureaucratic help to particularly vulnerable households,” notes climate policy expert Hannah Förster.

Oeko-Institut factsheet (in German) on climate change impacts in the food sector