Costs of climate-change adaptation in Europe: a review

EIB working papers 2012/05:

This review addresses the impacts of climate change on Europe, especially on its economic sectors and the distribution of economic activity. It considers adaptation as an essential component in addressing those impacts and estimates the overall costs of adapting Europe to climate change. It compares recent estimates based on their adaptation perspective, including a detailed review of the methodologies used and of the definition of adaptation adopted.

The questions that are guiding the review are the following: (i) what are the assumptions underlying recent adaptation-cost estimates; (ii) what are the methodologies applied; (iii) how much of adaptation investment is supposed to be public and how much private; (iv) are residual damages estimated; (v) what are the sectors with the highest adaptation-investment needs, i.e. the most vulnerable to climate change; and (vi) how do adaptation costs relate to overall investments in a given sector. Section 2 gives an overview of current adaptation-cost estimates and provides a categorization of methodologies based on the depth of analysis. Section 3 adopts a more detailed focus and concentrates on specific sectoral studies that make up the aggregate estimates. Section 4 offers a brief summary and concludes.