Climate change to impact Germany largely through foreign trade

The impact of global climate change in Germany will be felt less through floods, extreme drought or forest fires, but rather through the effects on foreign trade of Europe’s largest economy, according to a report commissioned by the Federal Environment Agency (UBA). The long version of a report first published in December 2018 says that the German economy annually imports and exports in the order of one trillion euros. This makes the potential economic risks of climate change affecting trade with vulnerable partner countries especially relevant. The interim report does not assess how strong the economic effects will be. However, the analysis shows that slightly more economic risks are expected on the import side than on the export side, where some economic opportunities are expected. German imports will, for example, be affected if extreme weather destroys production facilities or infrastructure abroad, including harbours. However, it would profit from a prolonged maritime season due to melting ice. On the export side, climate change will dampen growth, purchasing power and private consumption in partner countries. At the same time, the technologically highly developed German economy could profit from growing markets surrounding climate adaptation, damage containment and climate-friendly products in general.

The effects of global warming are set to have enormous repercussions on human health, the environment, international peace and security and economic development worldwide. In a bid to mitigate climate change and make its economy virtually CO₂-neutral by mid-century, Germany is undergoing a massive transition which already has profound effects on businesses and society. In a globalised world, the energy transition is an international effort which crosses national borders and means that countries have to look at the interlinkage of the effects to prevent economic upheavals.