Costs of Adaptation vs Costs of Inaction

Publication: Report
Citation: Valverde, María José et al. 2022: Costs of Adaptation vs Costs of Inaction. Final Report. Ramboll Management Consulting, Ecologic Institute, Frankfurt School: Brussels, Berlin, Frankfurt am Main.

Both the costs of adaptation and the costs of inaction are central concepts that influence all political decisions. It is necessary to precisely define and calculate these costs to inform policy decisions. Insufficient knowledge and lack of information on these key concepts significantly hinder the development and implementation of effective climate adaptation strategies.

The European Environment Agency's report "Costs of Adaptation versus Costs of Inaction" highlights the urgent need for climate change adaptation strategies. In the face of increasing climate events such as heatwaves, forest fires and floods, the report notes that the European Union has already taken important initiatives on adaptation, including the formulation of the EU Adaptation Strategy. This strategy aims to make adaptation measures more efficient, faster and more comprehensive and to increase international readiness to act.

The challenges of accessing information and defining key concepts

The report further highlights that adaptation to climate change and the costs of inaction are key but vaguely defined concepts that permeate all policy decisions. A major problem is the lack of access to relevant information and understanding of key concepts such as adaptation finance, which makes it difficult to structure and evaluate adaptation strategies. These information gaps lead to problems in the evaluation and comparability of adaptation efforts at European level.

Methodology for assessing the costs of non-adaptation and adaptation

Finally, the report emphasizes the need to develop robust methods for calculating the costs of non-adaptation and adaptation costs. A detailed step-by-step approach is proposed that includes baseline definitions, socio-economic scenarios, climate projections, impact analyses and monetary assessments. This methodology is intended to help decision-makers make informed decisions on public investments based on a solid, comprehensive and comparable database.

Both the costs of adaptation and the costs of inaction are central to all political decisions. Insufficient knowledge and a lack of information significantly hinder the development and implementation of effective climate adaptation strategies.

The Cost of Adaptation Versus the Cost of Inaction for Europe

Jul 2021 - Feb 2022

Language: English
Authorship: John Tarpey

Hugh McDonald

Jenny Tröltzsch

María José Valverde

Elizabeth Tamayo Tabares

Gabriel Umana

Thomas Neumann

Blandine Arvis

Adeline Cauchy

Imane Bourkane
Funding: European Environment Agency (EEA), International
Published by: Ramboll Management Consulting (RMC), Belgium
Year: 2022
Dimension: 77 pp.
Project: The Cost of Adaptation Versus the Cost of Inaction for Europe
Project ID: 2633-10
Table of contents: Click to show full table of contents

1. INTRODUCTION
1.1. Background
1.2. Objectives
1.2.1 Outline and reading guidance
1.3. Concepts and definitions
2. EFFICIENCY AND EFECTIVENESS OF ADAPTATION
2.1. Defining efficiency and effectiveness of adaptation measures
2.2. Use cases for knowledge on efficiency and effectiveness
2.3. Linking to relevant policies
EU GREEN DEAL
ADAPTATION ASPECTS OF THE TAXONOMY REGULATION
EU ADAPTATION STRATEGY
JUST TRANSITION MECHANISM
EU CLIMATE LAW
EU REGULATION (2018/1999) AND IMPLEMENTING REGULATION (2020/1208)
2.4. Conclusion
3. ELEMENTS OF THE COST OF INACTION
3.1. Defining inaction
3.1.1 Establishing a baseline to define inaction
3.1.2 What costs should be included?
3.1.3 Challenges with implementing the ‘cost of inaction’
3.2. Methodological approaches to costs of inaction
3.2.1 Estimating the cost of inaction at the economy-wide level
3.2.2 Estimating the cost of inaction at the sector level
3.3. Minimum information required to estimate inaction
Building block 1: Baseline
Building block 2: Socio-economic scenarios
Building block 3: Climate projections
Building block 4: Impacts
Building block 5: Monetary valuation
Stepwise approach to calculate the cost of inaction at national level:
3.4. Gaps and further research perspectives
4. ELEMENTS ON THE COST OF ADAPTATION
4.1 Defining the costs of adaptation
4.2 Minimum information required to estimate costs of adaptation
4.2.1 Building block 1: Defining economic, social, and environmental impacts of climate change
4.2.2 Building block 2: Defining adaptation targets
4.2.3 Building block 3: Identifying adaptation options
4.2.4 Building block 4: Identifying climate adaptation potential of other investments
4.2.5 Building block 5: Monetizing adaptation
4.3 Methodological approaches to costs of adaptation
4.3.1 Methodologies for estimating investment needs for adaptation
4.3.2 Methodologies for tracking adaptation costs at the national level
4.4 Gaps and recommendations for future research
5. BENEFITS OF ADAPTATION
5.1 Introduction
5.2 The selection of adaptation options determines the benefits
5.3 Beyond direct costs and benefits: co-benefits
5.4 Methodologies
5.4.1 Recent methodologies
5.4.2 Most common methodologies
5.5 Current gaps and opportunities of improvement in Europe
6. COSTS OF INACTION VS. COSTS OF ADAPTATION
6.1 Introduction
6.1 Best available knowledge on costs of adaptation vs. costs of inaction
6.2 “Costs of adaptation vs costs of inaction” and the “costs of adaptation vs benefits of adaptation”
6.3 Important points for interpreting results
REFERENCES
Keywords: Adaptation

Finance

climate resilience, environmental goals, sustainable development, economic growth, governance regulation, risk assessment, investment needs, climate change risks, adaptation goals, financing strategies, European Union (EU)

Europe, Global South, Germany, France, Italy

Further Links

PublicationReportGutachten zu den ökonomischen Folgen des Klimawandels und Kosten der Anpassung für Hamburg

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Jenny Tröltzsch and Max Grünig presented the project results together with the project partner Hamburgische WeltWirtschaftsInstitut (HWWI) in Hamburg.The final presentation showed that still large knowledge gaps on the costs of climate change and the costs and benefits... Read more

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Date: 5 February 2013
Location: Hamburg, Germany

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