We only have one Earth.
It is a global challenge.
It is a message of urgency.
It is five minutes to midnight in the global climate emergency.
More and more political leaders around the world are putting the protection of the climate
at the top of their agenda.
Most importantly: They have agreed to rapidly cut their greenhouse gas emissions.
That's the most complex and longest transformation we've done.
So it's a tremendous challenge.
But it can be done.
There are many challenges and just as many open questions on how to meet them.
But one thing we know for sure: it is going to cost a lot of money.
In this video, we want to look at just how much, using Germany as an example.
Before we look at that bill, let’s have a look at how expensive the climate crisis
already is...first worldwide – and then we’ll take a closer look at Germany.
The frequency and intensity of extreme weather events has risen sharply in recent decades.
Forest fires in North America, southern Europe and Siberia.
Typhoons in Southeast Asia.
Floods in Germany and China.
Yes, they are expensive.
Insurance companies say extreme weather events cost more than $80 billion, that’s roughly
68.5 billion euros.
In 2020 alone.
Among the hardest hit in the last twenty years were Puerto Rico, Myanmar, Haiti, the Philippines
and Pakistan.
When the damage is at its most severe in the countries with fewest resources to cope, the
consequences are devastating.
And Germany?
Let’s take a look at the most recent example to make things clearer: The floods in the
summer of 2021 destroyed infrastructure such as roads, bridges, and water treatment plants.
The German Insurance Association estimates the damage in the affected areas at 7 billion
euros.
And that’s just one catastrophe made worse and more likely by climate change.
Germany also went through several years of drought that damaged huge areas of farmland
and woodland.
There are no final numbers, but forest owners estimated the reforestation costs to have
been around 640 million euros and the cost of removing the damaged trees to have been
around 2.1 billion euros.
You think that’s bad?
Brace yourself, it is time to look into what we will be facing very soon.
Well, in the long run non-action is much more expensive than action.
Delayed transition would be much more expensive but also more socially unjust.
To understand the experts better, we need to look at some details: With the Paris Climate
Agreement, world leaders promised to keep the average global temperature rise well below
2 degrees Celsius and will strive for 1.5 degrees Celsius compared to pre-Industrial
Revolution-levels.
Every degree of warming makes the planet less hospitable to humans.
If the world warms 1.5 degrees Celsius then disasters like heat waves, water shortages
and crop failures hit much harder and more often.
Let’s have a look at these scenarios by the UN.
Remember the 68.5 billion euros of insurance costs because of extreme weather events from
last chapter?
That was from 2020.
And it’s only getting worse.
A lot worse.
There are no definite numbers yet.
But - scientists and experts agree action is necessary and that leads us - to our bill.
Let’s have a look at how much it might cost us - in Germany.
First of all, Germany already plans to achieve climate neutrality by 2045.
That means balancing those emissions so they are equal to or less than the emissions that
get removed through the planet’s natural absorption.
Research that focused on the costs of this transformation came to the estimate that it
will cost 6 trillion euros until 2045.
That's a lot of money.
Bear with us.
Let’s have a look at the three sectors which are going to swallow the biggest chunk of
that money.
Energy, industry, and transport.
They are the most expensive to revolutionize because they are big, emit a lot, and are
complicated to decarbonize.
The energy sector is Germany’s biggest emitter.
That makes sense because we all need to heat our houses in winter and turn on the light
when it gets dark.
But – here is the problem: Daily life creates a vast amount of CO2, since most of the energy
production relies on fossil fuels.
As an incentive to use more renewable energy, Germany introduced a CO2 price starting this
year.
The deal: companies that emit CO2 due to their production will have to pay for it.
Companies then pass these costs on to their customers.
This makes climate-damaging fuel such as gasoline or heating oil more expensive for them.
In 2021, the cost of heating an average household with heating oil rose by 158 euros...with
huge social repercussions.
The CO2 prices have to be paid by all consumers but it affects low-income households worse
because they have to spend more money related to their income than rich or high-income households
which have a higher CO2 footprint and also higher incomes.
They are not spending enough money for this kind of CO2 price and this is socially
not fair.
Plus: there is not yet enough environmentally friendly energy available for everyone to
switch to.
But there is a solution.
The best way to protect ourselves from rising energy costs is to expand the use of renewables.
It is a vital socio-political instrument to prevent what we call energy poverty because
it ensures a stable supply and stable prices in the future.
And that takes us to the second sector: Germany’s industry.
The automobile industry is the driving force here.
It is considered the backbone of Germany’s industrial and financial economy.
It needs one thing above all: steel.
Not surprisingly, cars are mostly made of steel.
The conventional manufacturing of steel is anything but
environmentally friendly.
Around 1.7 tons of CO2 emissions are produced for every ton of crude steel.
Manufacturing techniques that cause fewer emissions are still in their infancy.
The German Government - actually the outgoing one under Angela Merkel - pledged billions
in investment to decarbonize steel production.
The cost: 13 to 35 billion euros alone in this decade.
And that’s just for the steel sector.
It is a promising way to make Germany’s car production more climate-friendly.
Speaking of which: most of the transport here is road bound.
And so it’s back to cars.
Transport is the last sector we focus on and what it means cost wise.
To cut CO2 emissions, electric vehicles are an alternative to the good old combustion
engine.
Currently, electric cars are more expensive to buy than conventional cars.
But anyone who buys an electric car in Germany for under 40,000 euros will receive a buyer’s
premium of 6,000 euros from the state.
Plus: Products based on fossil fuels like gasoline will become more expensive.
Electricity on the other hand - you remember, we said it - has a high potential to become
more affordable, due to improved production techniques.
So in the long run, electric cars will become more affordable than cars with combustion
engines.
There are many questions we don’t know the answer to yet.
For example: Will scientists be fast enough in developing methods to store renewable energy
efficiently?
Will Germany find a way to make climate protection socially just?
And many more questions.
But there is one last point, which is really important to mention.
We talked about huge sums of money in this video.
Economic damage to goods, to buildings, to infrastructure.
But all this doesn’t matter in the face of some costs that are hard to put a price
tag on.
Humans are already dying as a consequence of climate change.
According to the World Health Organisation, climate change is already responsible for
150,000 deaths around the world every year... and that figure is rising.
The air pollution from burning fossil fuels kills millions each year.
8.7 million to be precise.
That’s the latest estimate from 2018.
And not only humans are dying, plant and animal species are becoming extinct at an alarming
rate.
Protecting the climate will remain one of the greatest challenges over the coming years.
And it will be expensive.
But in the long run, investing more in advance may mean spending less to repair the damage
later.