Abstract
Climate adaptation is an urgent priority for the custodians of national and local economies, such as finance ministers and mayors – as well as to leaders in the private sector. Adaptation measures are available to make societies, communities and companies more resilient to the impacts of climate change. But decision makers need the facts to identify the most cost-effective investments, they need to know the potential climate-related damages over the coming decades, to identify measures to mitigate these risks – and to figure whether the benefits will outweigh the costs. The Economics of Climate Adaptation (ECA) methodology provides decision makers with a fact base to answer these questions in a systematic way. It enables them to understand and quantify the impact of climate change and to identify actions to minimize that impact at the lowest cost. It therefore allows decision makers to integrate adaptation with economic development and sustainable growth (Adger et al, Nat Clim Change 3(2):112–117, 2013). Case studies in more than 20 different regions around the globe, ranging from Maharashtra in India to the US Gulf coast, showed that a significant portion of expected damage from climate change can be averted using cost-effective adaptation measures – a strong case for preventive action. Since many mountain regions are especially sensitive to natural hazards yet in many instances lack precise and long historic records of pertinent data, the ECA methodology provides a tool to overcome quite some of these limitations by making extensive use of probabilistic risk assessment.
Beyond cost-effective protection, risk transfer is a powerful tool to manage low frequency/high severity impacts; it can protect assets and livelihoods from catastrophic events. Risk transfer puts a price tag on risk and thereby incentivizes investments in prevention measures – thus helps twofold to strengthen climate resilience.
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Notes
- 1.
climada – the open-source Economics of Climate Adaptation (ECA) tool – consists of the core module, providing the user with the key functionality to perform an economics of climate adaptation (ECA) assessment. Additional modules implement global coverage (automatic asset generation), a series of hazards (tropical cyclone, storm surge, rain, etc.) and further functionality, such as Google Earth access: https://github.com/davidnbresch/climada (retrieved 31.3.2015).
- 2.
Results for 22 GCMs based on IPCC 2007 A1B scenario. The 90th percentile of the GCM range of results indicates a possible decrease in precipitation.
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Acknowledgements
The author of this chapter co-led the Economics of Climate Adaptation (ECA) report (ECA working group 2009). The present chapter reproduces portions of and is influenced by that report, which builds on and summarizes the first eight case studies researched by Economics of Climate Adaptation Working Group, a partnership between Climate Works Foundation, Global Environment Facility (GEF), European Commission, McKinsey & Company, The Rockefeller Foundation, Standard Chartered Bank and Swiss Re.
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Bresch, D.N. (2016). Shaping Climate Resilient Development: Economics of Climate Adaptation. In: Salzmann, N., Huggel, C., Nussbaumer, S., Ziervogel, G. (eds) Climate Change Adaptation Strategies – An Upstream-downstream Perspective. Springer, Cham. https://doi.org/10.1007/978-3-319-40773-9_13
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