Climate Impact Chains in a Globalized World: a Challenge for Germany

In a globalised world, extreme weather events and the consequences of climate change do not only have local impacts: Via trade links, they can also have an effect over a large geographical distance. It is assumed that these indirect effects of climate change are at least as relevant for Germany as the direct consequences of climate change within the country. However, due to the complexity of supply chains and flows of goods, these risks are difficult to capture.

The CLIC project has three overarching objectives: to further develop methods for the economic evaluation of the effects of cross-border consequences of weather extremes and climate change on economic activities, to use these methods to describe impacts on the German economy in more detail, and to develop recommendations to reduce existing risks and seize possible opportunities. The project focuses on transboundary climate impacts affecting trade and production activities. The expected results will include a literature study on the topic, focusing on a critical reflection on the methods of studies on transboundary climate impacts in other countries, statements on correlations of natural disasters and flows of goods in the past (via regression analysis) and on the behaviour of enterprises in production and trade decisions after extreme events via agent-based modelling and its coupling with a general equilibrium model. Further results are case studies and policy papers. The results will be used to sensitise companies to the topic and towards options for action through publications and discussions in advisory groups as well as to policy levers for addressing the identified challenges.

adelphi is leading the project working with the project partners Centre for European Economic Research (ZEW) and the Potsdam Institute for Climate Impact Research (PIK). Important stakeholders are organised in an advisory group and include the Federal Environment Agency, international companies and associated organizations.