Macroeconomic Impacts of Climate Change, Climate Adaptation, and Climate Mitigation in Germany

Christian Lutz (), Lisa Becker, Andreas Kemmler, Saskia Reuschel, Lukas Sander and Britta Stöver
Additional contact information
Christian Lutz: Institute of Economic Structures Research (GWS mbH), 49080 Osnabrueck, Germany
Lisa Becker: Institute of Economic Structures Research (GWS mbH), 49080 Osnabrueck, Germany
Andreas Kemmler: Prognos AG, 4052 Basel, Switzerland
Saskia Reuschel: Institute of Economic Structures Research (GWS mbH), 49080 Osnabrueck, Germany
Lukas Sander: Prognos AG, 4052 Basel, Switzerland
Britta Stöver: Institute of Economic Structures Research (GWS mbH), 49080 Osnabrueck, Germany

Sustainability, 2025, vol. 17, issue 13, 1-20

Abstract: This study examines the effects of climate mitigation, climate change as quantifiable effects of additional extreme weather events, and adaptation investments on economic growth in Germany. First, on the basis of a comprehensive literature review and further considerations, important impact channels are discussed. Second, the macroeconometric national model PANTA RHEI is used to quantify the effects. To this end, scenarios are refined with and without additional climate change, and with and without additional climate protection to achieve national reduction targets until 2045, and defined for the first time with and without adaptation to climate change. This is also the first combination of all three climate dimensions within the model. The results show that, in the model, the quantifiable effects of extreme weather events have a negative impact on GDP that can be reduced by adaptation. By contrast, climate mitigation has a positive effect. As only monetary effects are accounted for, negative effects of climate change and positive impacts of climate policy are underestimated in broader terms. The model results help to understand the interaction between mitigation and adaptation: without mitigation, the impact of the climate crisis will increase significantly. Adaptation measures may then have less impact or even become ineffective.

Keywords: macroeconomic effects; climate change; climate adaptation; climate mitigation; extreme weather events; macroeconometric modeling; economic growth; scenario analysis (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2071-1050/17/13/6175/pdf (application/pdf)
https://www.mdpi.com/2071-1050/17/13/6175/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:17:y:2025:i:13:p:6175-:d:1695376

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().