(de-news.net) – As extreme weather increasingly jeopardizes lives, economic stability, and international security, German President Frank-Walter Steinmeier has called for a reinvigorated commitment to climate protection. Rising climate-related losses highlight the need for both emissions reductions and adaptation, even if Germany must make significant investments to become climate neutral. As the United Nations warns that present policies are still insufficient to meet global temperature targets, the European Investment Bank Group is increasing funding for initiatives to safeguard businesses, infrastructure, and communities from climate hazards.

German President Frank-Walter Steinmeier has called for renewed attention to climate protection, warning that security and stability concerns have pushed environmental issues down the public agenda even as the effects of climate change become increasingly apparent. Speaking at the 2026 German Environmental Award ceremony in Aachen, he pointed to record temperatures, wildfires along France’s Atlantic coast, retreating Alpine glaciers, drought-stricken agricultural land and rivers with insufficient water for navigation as examples of the extreme weather experienced during the previous summer.

The consequences extend beyond environmental damage. According to Germany’s Robert Koch Institute, heat caused an estimated 16,000 additional deaths in the country, particularly among older people and those with underlying health vulnerabilities. The economic damage also reached tens of billions of euros, illustrating the substantial human and financial costs associated with extreme temperatures.

Steinmeier expressed hope that technological advances could help address these challenges. He called for further reductions in greenhouse gas emissions and more effective protection of natural resources, identifying the use of existing legal instruments, recycling and decarbonization in industry and buildings as important elements of the response.

Substantial investment requirements for climate neutrality

Germany will need to mobilize nearly 290 billion euros annually from businesses, the government and households to achieve climate neutrality by 2045, according to a study by Prognos commissioned by state-owned development bank KfW. The scale of the undertaking is reflected in the annual investment requirement, which is equivalent to nearly 55 percent of the federal budget.

Transportation accounts for 45 percent of projected investment needs, followed by energy supply at 25 percent, buildings at 22 percent and industry at eight percent. Industrial investment alone is expected to exceed 480 billion euros through 2045, equivalent to approximately 23 billion euros annually. Much of this spending will be needed to transform energy-intensive production, electrify process heat and introduce climate-friendly technologies.

After deducting spending that would be necessary even without the transition away from fossil fuels, KfW estimates the additional annual investment requirement at approximately 65 billion euros, or less than two percent of Germany’s gross domestic product. From 2018 through 2023, annual investment in climate protection averaged around 110 billion euros. Reaching the projected annual total of 290 billion euros would therefore require an increase of nearly 180 billion euros compared with that average.

Private and public companies together account for almost half of the overall investment requirement, amounting to approximately 3 trillion euros, or 140 billion euros annually. Both large corporations and small and medium-sized enterprises face substantial investment demands. The public sector is expected to contribute around 33 billion euros annually, just under 12 percent of the total, while private actors would provide approximately 257 billion euros.

Government investment will be particularly important in areas such as electricity distribution networks, district heating, rail infrastructure and electric vehicle charging facilities. Businesses invested more than 80 billion euros in climate protection in 2024, indicating that corporate spending will also need to increase significantly to meet the overall requirements, according to KfW.

Extreme weather creates mounting economic losses

Extreme weather, particularly heat, is imposing an increasing financial burden, according to a joint study by Allianz and Allianz Trade. The first annual Allianz Climate Risk Tracker assesses both long-term climate change and current physical risks through its Climate Change Score and Climate Stress Score. It also estimates the economic damage associated with Europe’s 2026 heatwaves and examines how a strong El Niño could affect economic growth and inflation in 2027.

Germany, accordingly, recorded nearly 50 billion euros in weather-related economic losses over the preceding five years, almost twice the annual average for the period from 2000 to 2019. Losses increased more rapidly than the global benchmark, which rose by 54 percent. Insured losses in Germany climbed by 80 percent to nearly 17 billion euros annually, compared with a worldwide increase of 76 percent. Despite this rise in insured losses, insurance covered only 33.5 percent of Germany’s total losses, slightly above the global proportion of 32.8 percent.

Allianz Trade estimated that Europe’s summer 2026 heatwaves could reduce German economic output by approximately 25 billion euros. Among 30 European countries assessed, Germany ranked second in absolute heat-related losses, behind Italy at 28 billion euros and ahead of France at 20 billion euros. Across Europe, total losses were estimated at 113 billion euros.

A strong El Niño could reduce the combined economic output of the economies examined by approximately 392 billion euros ($451 billion) in 2027. China, the United States and India would account for more than 60 percent of gross losses. For the 27 member states of the European Union, the projected net reduction in economic output is 21 billion euros ($24 billion), equivalent to 0.09 percent of gross domestic product. Germany’s estimated losses amount to 5.5 billion euros ($6.3 billion), or approximately 0.1 percent of GDP.

The economic consequences could also include higher prices. The projected pressures could raise Germany’s overall inflation rate by 0.13 percentage points and food inflation by 0.21 percentage points. Across the European Union, the corresponding increases are estimated at 0.31 and 0.5 percentage points, respectively.

Germany recorded no qualifying extreme-weather event associated with economic losses in 2025, according to the study’s database. That single-year result, however, contrasts with the country’s longer-term experience: since 2000, Germany has recorded an average of nearly six qualifying events annually, causing damage equivalent to approximately 0.1 percent of GDP. Among 227 countries, Germany ranked 137th. Allianz climate economist Hazem Krichene characterized the comparatively mild figures for 2025 as a temporary reprieve rather than a lasting guarantee of safety, underscoring the limits of drawing conclusions from a single year of reported losses.

UN warns of continued warming beyond climate targets

The United Nations Environment Programme’s Emissions Gap Report, published on October 21 this year, projects that global temperatures could rise by 2.8 degrees Celsius above preindustrial levels by 2100 if governments continue their current policies. According to the Associated Press, this projection is unchanged from the previous year, indicating that the expected long-term warming trajectory has not improved under existing measures.

Even if governments fully implement their current national climate pledges, warming would be limited to approximately 2.6 degrees Celsius, around 0.1 degrees higher than the previous year’s estimate. With global temperatures already approximately 1.4 degrees Celsius above preindustrial levels, neither scenario would meet the Paris Agreement’s objective of keeping warming well below 2 degrees and pursuing a limit of 1.5 degrees.

United Nations Secretary-General António Guterres warned that the world could no longer expect to maintain the 1.5-degree threshold under the current trajectory. One possible alternative considered by the UN involves temperatures initially rising to approximately 1.8 degrees Celsius before carbon dioxide removal brings them back down toward 1.5 degrees. Reuters reported that even the most favorable scenario offers only about a 50 percent chance of achieving that outcome by 2100.

Reaching this pathway would require substantial and sustained reductions in global emissions. Compared with 2025 levels, emissions would need to fall by 18 percent by 2030, 45 percent by 2035 and 69 percent by 2040. Current national climate plans fall well short of those requirements, projecting reductions of only five to eight percent by 2030 and 11 to 15 percent by 2035.

European Investment Bank increases funding

The European Investment Bank Group plans to invest at least 30 billion euros in climate adaptation by 2030, doubling the amount allocated over the preceding five years. The funding will support projects inside and outside the European Union designed to protect populations from heatwaves, droughts, wildfires and flooding.

Planned investments include strengthening public buildings and electricity networks, improving water supplies, introducing more water-efficient irrigation systems and supporting farming methods better suited to changing climate conditions. These measures are intended to help communities and essential infrastructure withstand a range of climate-related pressures.

The EIB Group also aims to help companies and public authorities identify climate risks at an early stage and develop appropriate mitigation strategies. Additional support is anticipated for businesses bringing technologies such as water-saving solutions and advanced cooling systems to market, linking adaptation funding with the development and deployment of practical responses to climate risks.