If the world's temperature increases by 4.5 degrees Celsius (8.1 degrees Fahrenheit), when compared to pre-industrial times, Germany could be facing a total cost of about 800 billion euros ($1 trillion) by 2050 and costs would continue to climb, the German Institute for Economic Research (DIW) in Berlin announced this week.

"If there is not a significant intensification of climate protection, by the year 2100 the total costs caused by climate change could be nearly 3,000 billion euros," said Claudia Kemfert, the institute's environment expert.

The report takes into account costs from the direct effects of climate problems including floods, droughts, forest fires and major storms as well as indirect consequences such as increased energy costs and measures to protect dikes and water protection walls.

Energy revolution needed

"We require nothing less than an energy revolution," Kemfert added. "The costs of climate protection are clearly lower than the costs of climate change."

Nearly all industrial sectors would be affected by the change, especially the finance industry and existing companies, she said. The institute calculated that the average German household would face annual extra costs of about 250 euros for heat and electricity.

Higher temperatures would also have major effects on the landscape. An increase of 1 degree Celsius would leave 60 percent of German ski areas without snow.

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Kempfert, however, said she did not expect the temperature change to stay under 2.5 degrees Celsius, and that measures would need to be taken to keep the increase to below 4.5 degrees Celsius and prevent higher rates of diseases that currently only affect tropical and subtropical regions.

Kemfert said economic losses can be expected even if there is a reduction in greenhouse gases, which are though to play a large role in global warming. The EU's new goal of reducing carbon dioxide emissions by 20 percent before 2020 "will not stop climate change," she added.

Climate change can only be held in check if emissions are cut and renewable energy use is increased in the United States and expanding economies, such as China and India, otherwise it is "very probably that climate change speeds up," Kemfert said.

Other forecasts

Other German institutions have presented similar, or worse, predictions of the effects of global warming.

Germany's Max Planck Institute estimated that climate change would cost German about 27 billion euros a year by 2050. The Kiel Institute for the World Economy said higher temperatures could mean a 12 percent drop in productivity, equal to a 10 billion euro drop in Germany's gross domestic product.