Economics of Climate Change Adaptation in Europe (ECONADAPT)
The need for an economic rationale for climate adaptation is recognised within the EU and globally. The ECONADAPT project advances the knowledge and evidence base on the economics of adaptation, and converts the findings into practical material to support decision making. It applies adaptation economics in risk management, project appraisal, impact assessments and planning processes that need enhanced economic information. Innovative methods are co-developed and tested in a participative way with a diverse user groups engaged in adaptation policy at multiple governance scales.
Background - From Theory to Practice
As climate change adaptation moves from theory to practice, more detailed economic analysis is needed. This need is recognised internationally, in particular by the EU Strategy on adaptation to climate change. However, the economics of adaptation remains in its infancy. Multiple methodological challenges exist, for example managing uncertainties and longer time periods, or the cost-benefit analysis of non-engineering measures. Moreover, past work was primarily undertaken within an abstract and theoretical framework and has insufficiently focused on meeting the needs of decision makers.
Objective - Economic Appraisal Criteria for Adaptation Actions
The aim of the ECONADAPT project is to provide user-orientated methodologies and evidence relating to economic appraisal criteria, in order to inform the choice of adaptation actions. The project works intensively with stakeholders from e.g. relevant DGs, Member States, Regional and local policy makers. Detailed guidance and empirical data will be provided to other economists, as well as to other users who may want to use 'light-touch' methods.
The specific objectives of ECONADAPT are:
- To focus on user needs to inform the methodological and empirical advances to be made, and embed economic assessments within existing policies, current policy developments and other socio-economic trends.
- To derive improved estimates of key economic parameters, including those relating to social preferences across time and space.
- To develop approaches that better facilitate consistency in the treatment of scale, uncertainty, aggregation and transferability in economic assessments of adaptation.
- To develop methodological approaches for cost and effect/benefit estimation, including non-monetary metrics.
- To facilitate the expansion of the range of adaptation actions, and types of costs and benefits considered, in analytical practice.
- To apply the range of methods and data derived in key "work areas".
- To facilitate effective dissemination of both methodological and empirical outputs.
Rather than a narrow sectoral approach, ECONADAPT aims to advance adaptation economics in key areas of decisions facing Europe and Member States in the next ten years. Key work areas are:
- Management of major risks of climate change in Europe, in particular extreme events.
- Incorporating adaptation into economic project appraisal, particularly for large capital investment with long life-times and thus high exposure to climate change.
- Including adaptation in impact assessments, especially where there are large flows associated with mainstreaming adaptation into major EU funding areas.
- Identifying the macro-economic effects of adaptation within the EU and MS, including the effects on public finance, growth and competitiveness.
- Developing methods of economic analysis to support EU/MS international development assistance for adaptation in developing countries.
A stakeholder survey and a number of meetings are run early in the project to identify user-needs. The results and findings from the project will be brought together in a toolbox.
Ecologic Institute in ECONADAPT
Ecologic Institute is involved in several tasks in ECONADAPT. It leads the development of the toolbox (manual and guidance documents) and data repository for economic assessment of adaptation targeted at economists and other end-users, in particular policy makers. Ecologic Institute is also involved in the review of the costs and benefits of adaptation and methodological developments for the measurement of non-monetary values, distributional parameters, and improved representation of spatial, temporal and sectoral dimensions. Furthermore, Ecologic Institute is involved in the application of new methods for the economic appraisal at project level.