Assessing the costs and benefits of climate change adaptation

Climatic conditions are rapidly changing. With this in mind, there is an increasing need for adaptation yet the resources available to decision-makers are limited. This means that better understanding is needed around the costs and benefits of adaptive actions and the costs of adaptation compared to the costs of failing to take action. Gaining this understanding is challenging one problem is limited access to information on public budgets and adaptation expenditure at national and subnational level (Valverde et, al., 2022). Another has to do with difficulties in calculating the economic, social and environmental impacts of climate change (IPCC, 2022).
The EEA uses information from reinsurance companies to estimate the economic impacts of climate change. According to these data, the total economic losses from weather-and climate-related events between 1980 and 2021 amounted to more than EUR 560 billion (based on euro values in 2021) in the 27 EU Member States (EU-27). Between only one quarter and one third of these losses were insured (EEA, 2022b). The scale of these losses means that adaptation efforts must be ramped up. Since adaptation investments ae primarily publicly funded, the costs of adaptation programmes and their resulting benefits compared to the costs of doing nothing must be carefully considered to justify spending and channel resources most efficiently. It is also important to establish methods and gather data to better understand whether investing in adaptation helps reduce economic losses from weather and climate extremes.