The economics of climate adaptation in the EU: new evidence from recent research

The article offers new insights on adaptation economics in the EU and Member States. It explores key policy questions, and highlights areas in need of new economic research, notably on adaptation financing and the economics of transformational adaptation. While adaptation requires public expenditures, it reduces impacts on revenues by alleviating the effect on the tax base. The results show that adaptation reduces the impact on sectors that are negatively hit by climate change impacts, highlighting the role for government action.

The research finds there is a strong case to move beyond the current focus on the economic appraisal of options, applying economics earlier in the adaptation cycle to investigate how to deliver adaptation policy effectively. The paper highlights a number of emerging areas where similar policy questions are emerging, and new economic research is needed, notably on adaptation financing and the economics of transformational adaptation.