Indicator: Environmental costs of energy and road transport

A graph shows the development of environmental costs energy generation and road transport between 2016 and 2021. They were 256.4 billion euros in 2016 and 241.5 billion in 2021.Click to enlarge
Environmental costs (greenhouse gases and air pollutants) of power and heat generation ...
Source: German Environment Agency Figure as PDF

Table of Contents


At a glance

  • Power generation, heat generation and transport activities pollute the environment, among other things, through the emission of greenhouse gases and air pollutants.
  • This results in high subsequent costs for society, for example through environmentally-induced diseases, damage to ecosystems or even buildings.
  • For Germany, these environmental costs are estimated to amount to almost 241 billion euros in 2021, a decrease of 5.4 % compared to 2020.

Environmental importance

The use and transformation of energy resources for electricity and heat generation and road transport pollutes environment through the emission of greenhouse gases and air pollutants, e.g. particulate matter and nitrogen oxides. These cause an increase in morbidity, damage to buildings and monuments (facade pollution) and are a burden on ecosystems (cf. 'Population exposure to particulate matter pollution' and ‘Agricultural nitrogen surplus’). The emitted greenhouse gases contribute to climate change. The consequences of climate change, such as an increase in heavy rainfall, thunderstorms or floods, threaten human lives and cause major damage.

This is also associated with economic costs amounting to billions, such as expenses for the restoration of storm damage. Even fifteen years after the publication of the "Stern Review," economist Nicholas Stern reiterates that the costs of inaction exceed the costs of climate protection many times over and again calls for decisive action in the fight against climate change (Stern 2006 and Stern 2021).


Assessing the development

After a particularly pronounced 6.4 % decline in environmental costs from 2019 to 2020, this trend did not continue in 2021. Environmental costs increased from 229.2 billion (bn) euros in 2020 to 241.5 billion euros in 2021. This development can probably be attributed in particular to the measures (e.g., lockdown, increase in home office) in the wake of the Covid pandemic in 2020. Although the pandemic situation also continued in 2021, the particularly drastic measures mainly affected 2020.

Comparing 2021 with the pre-pandemic year 2019 shows a slight decrease of 1.6 % in environmental costs generated by energy production and road transport.

Looking at the individual segments, it can be seen that the increase in 2021 is mainly due to the increased environmental costs of power generation (+13.7 %). At 93 billion euros, the environmental costs of electricity generation are thus back at the pre-pandemic level from 2019. In contrast, the environmental costs of road transport record a moderate increase of +2 % compared with 2020 and are also significantly lower in 2021 than the environmental costs of 2019. The environmental costs of heat generation remain constant (+0.3 %), but continue to be above the pre-pandemic level.



Calculations of environmental damage are based on the ‘Methodological Convention 3.0 for the Assessment of Enviromental Costs – Methodology’ (UBA 2018, in German only). The convention helps to determine costs for the use of the environment according to uniform and transparent criteria. It takes current research into account. The ‘Methodological Convention 3.1 – Cost Rates’ includes cost rates for the environmental costs of greenhouse gases, air pollutants and noise as well as cost rates per kilowatt-hour of electricity and heat generated and per kilometre travelled (UBA 2020, in German only). Other adverse effects on the environment, for example in the form of land usage and water pollution, are not covered by the indicator, as no comparable cost estimates are yet available for these.

More detailed information: 'Gesellschaftliche Kosten von Umweltbelastungen' (in German only).