Project

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

Start of Project 11/2018
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End of Project 04/2022

The project CLIC considers the transboundary impacts of climate change on economic activity in Germany. These indirect climate impacts affect the German economy via trade links. The aim of the project is to evaluate these effects in order to develop recommendations for reducing risks and making better use of opportunities.

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Update on the project´s process

The first results of a regression estimation show that bilateral trade flows are negatively affected in the short run by exceptionally high temperatures in the exporting country. The results of modeling in the project suggest that the economic shocks of different extreme weather events interact and resonate with each other along supply and trade chains, both spatially and temporally. At the global level, consumption losses are amplified by such resonances by an average of 18% compared to losses caused by a single type of extreme weather event. It has also been shown that the expectation of climate damage can lead to lower profit expectations and thus lower investment, which in turn can lead to further production losses. Economically optimal climate protection measures, however, can counteract this productively. Looking only at Germany, it can be seen that the vulnerability of supplier countries to the effects of climate change has increased, particularly in the areas of IT and communications equipment and clothing. 

Flagship-Paper

Osberghaus, D. (2019). The Effects of Natural Disasters and Weather Variations on International Trade: A Review of the Empirical Literature. Economics of Disasters and Climate Change, 3(3), 305–325. doi.org/10.1007/s41885-019-00042-2

K. Kuhla, S.N. Willner, C. Otto, L. Wenz, A. Levermann. "Future heat stress to reduce people’s purchasing power". Under review for PLOS ONE

K. Kuhla, S.N. Willner, C. Otto, T. Geiger, A. Levermann. "Ripple resonance amplifies economic welfare loss from weather extremes". Under review for Science Advances

L. Quante, S.N. Willner, R. Middelanis, A. Levermann. "Intensification of extreme snowfall events under future warming". Under review for Nature Scientific Reports.

H. Krichene, T. Geiger, K. Frieler, S.N. Willner, I. Sauer, C. Otto. "Long-term impacts of tropical cyclones and fluvial floods on economic growth – Empirical evidence on transmission channels at different levels of development". World Development, 144. 2021