Adaptation to climate change is now widely recognized as an equally important and complementary response to greenhouse gas (GHG) mitigation. Adaptation measures are increasingly being put in place in both developing and developed countries, and by both public and private agents. It is important that such efforts rest on a sound economic basis. How much adaptation might cost, and how large its benefits might be, are issues that are increasingly relevant both for on the ground projects as well as in a global context where trade-offs might need to be considered between the costs of adaptation, the costs of mitigation, and the residual damages resulting from climate change.
There are significant analytical and policy challenges associated with economic assessments of both mitigation and adaptation. However, the boundaries of mitigation measures are more clearly defined, the literature on mitigation costs is much more comprehensive, and there is a clear metric (reduction in GHG emissions) for assessing the effectiveness of such measures. In contrast, what does and does not fall within the purview of adaptation is much more ambiguous, the literature on adaptation costs remains sparse and contested, and there are no accepted metrics for assessing the effectiveness of adaptation policies and measures.
The aim of this workshop was to advance the work on economic aspects of adaptation, especially with regards to estimating the costs and benefits of adaptation and ways to incentivise adaptation. Specifically, the workshop focussed on five issues (see the full agenda and presentations here) :
- The Economic Case for Adaptation
- Assessing Adaptation Costs and Benefits
- Theoretical Frameworks for Modeling Adaptation
- Adaptation by the Private Sector
- Incentivising Adaptation through Economic and Policy Instruments