The costs of adaptation to climate change in developing countries will be in the order of $75-100 billion a year for the period 2010-50, according to preliminary findings of a new global study from the World Bank.
The Economics of Adaptation to Climate Change (EACC) study, funded by the governments of the Netherlands, Switzerland, and the United Kingdom, is the most in-depth analysis of the economics of adaptation to climate change to date and uses a new methodology for assessing these costs.
The new approach involves comparing a future world without climate change with a future world with climate change. The difference between these two worlds entails a series of actions to adapt to the new world conditions. The costs of these additional actions are the costs of adapting to climate change.
In the draft consultation document released last week, a key part of the overall analysis involved estimating adaptation costs for major economic sectors under two alternative future climate scenarios: “wet” and “dry.” Under the relatively dryer scenario, the adaptation cost is estimated at $75 billion a year, while under the scenario that assumes a future wetter climate it is $100 billion.
The EACC study has two broad objectives — to develop an estimate of the global costs of adaptation in developing countries and to help decision-makers in developing countries to better understand and assess the risks posed by climate change; and to better design strategies to adapt to climate change, particularly keeping the most vulnerable communities in focus.
The report finds that the highest costs will be borne by the East Asia and Pacific Region, followed closely by Latin America and the Caribbean, and Sub-Saharan Africa. The drier scenario requires lower adaptation costs in total in all regions, except South Asia.
Development strategies
The report stresses that development strategies must maximise flexibility and incorporate knowledge about climate change as it is gained. It also finds that adaptation costs decline as a percentage of GDP over time, suggesting that countries become less vulnerable to climate change as their economies grow.
In the study, adaptation costs for all developing countries are estimated for the major economic sectors using country-level data sets that have global coverage, including partial assessment of costs of adaptation for ecosystem services. Cost implications of changes in the frequency of extreme weather events are also considered.
The study is the first to develop a workable definition of adaptation costs that can set the stage for common understanding of what adaptation entails, what role development plays in adaptation, and what policy changes are needed to facilitate adaptation.
