What Are the Costs of Adapting to Climate Change?
Climate change affects different German regions and economic sectors to varying degrees. Therefore private as well as institutional actors face varying challenges in order to adequately adjust to global warming. Meanwhile, economic research on the costs of climate change mitigation has been broadly established. However, research studying the economic effects of adapting to climate change has focused so far either on highly aggregated spatial and institutional scales or it has concentrated on particular economic sectors, e.g. coastal protection or agriculture. The project “Economics of Climate Change Adaptation” addresses these issues with a comprehensive perspective at different scale levels.
The project aimed to assess possible economic consequences of climate change and alternative adaptation strategies for Germany and for certain focus regions (one coastal and one riverine region) by means of economic modelling. New insights into the distribution of costs and the benefits of climate adaptation have been gained and institutional conditions of the adaptation process have been examined.
The project provided thus economic data for the further development of the German Strategy for Adaptation to Climate Change. Moreover, institutions enabling climate adaptation policies were investigated. In brief, the triad consisting of economic modelling, cost-benefit analysis and institutional analysis provided insights in adaptation policy focusing on diverse economic sectors and different scale levels: from regional case studies to a national level.
Beside the policy oriented research the project’s objective lied also in an extension of economic methods and an integration of three different economic approaches: firstly by extending the economic modelling methodologies, secondly by an application of institutional economics to climate adaptation policy and finally by an extension of cost-benefit analysis by innovative valuation approaches. Last but not least the project intended to deepen economic research by an integration of the macroeconomic modelling, institutional economics and valuation theories.