No matter what we do, we are unlikely to avoid all of the impacts of climate change. Adaptation is unavoidable.
Adaptation is reducing our vulnerability to actual or expected climate change effects. It is mostly about thinking ahead. It could mean developing drought-resistant crops for some regions, or improving irrigation, rainwater storage or hurricane defenses. It may serve multiple purposes, including helping developing countries with education, health, and economic development.
Whatever the size of the costs, adaptation achieves more than carbon cuts in terms of reducing the damage from climate change.
An Analysis of Adaptation as a Response to Climate Change by Prof. Carlo Carraro, Dr. Francesco Bosello and dr. Enrica De Cian carries out an integrated analysis of both optimal mitigation (carbon cutting) and adaptation at the global and regional level.
Adaptation responses are split into three different categories: reactive adaptation (undertaken in response to climate change damage), proactive or anticipatory adaptation (undertaken before damage occurs), and investments in innovation for adaptation purposes (for example, in agriculture and health, where the discovery of new crops and vaccines is crucial to reducing vulnerability to climate change).
The size, timing, relative contribution to climate damage reduction, and the benefit-cost ratios of each of these strategies is assessed for the world as a whole, and for developed and developing countries in both a cooperative and a non-cooperative setting.
The study also takes into account the role of price signals and markets. This leads to two scenarios: A pessimistic one, in which policy-driven adaptation bears the burden, together with carbon cuts, of reducing climate damage; and an optimistic one, in which markets also autonomously contribute to reducing some damages through things like international trade flows, capital distribution and land allocation.
Carraro et al conclude that adaptation is an effective means of reducing climate-related damages. The benefit-cost ratios of adaptation expenditure are larger than one in all scenarios, and for high and low climate damages and discount rates. Nonetheless, benefit-cost ratios, and consequently global welfare, are even larger when adaptation and mitigation are implemented jointly.
Even though a clear trade-off between adaptation and mitigation is quantified, they are strategic complements and both contribute to a better control of climate damages. Mitigation prevails in the short-run and/or if the discount rate is low.
Most adaptation expenditures need to be carried out in developing countries. The size of the required resources is likely to be well beyond their adaptive capacity. Therefore, international cooperation is necessary to transfer resources to developing countries.
Dr Samuel Fankhauser makes the case for adaptation as a core part of the global policy response to climate change. He argues that adaptation is now unavoidable, because there are no realistic mitigation policies that restrict warming to a level that does not require substantial adaptation. A choice between adaptation and mitigation only exists in the long term, but this is not a trade off policy makers will make explicitly, because adaptation and mitigation choices are made by different actors. Adaptation is made more difficult by uncertainty about the exact nature of the expected change. This puts a premium on adaptations that yield early benefits or increase the flexibility of systems to react to unexpected change.
Dr Frank Jotzo notes that economic analysis of adaptation is subject to similar complications and limitations that beset quantitative economic analysis of climate change mitigation. To make such analysis relevant for policy decisions, the analysis must incorporate three factors that define the economics of climate change: uncertainty; improved calibration of economic climate change impacts, and the inclusion of non-market impacts; equity and differential climate impacts at the fine scale, which will define adaptation actions in practice. There is a long road ahead in improving the tools for economic modeling of adaptation, and the mitigation-adaptation nexus. Meanwhile, the crucial question for policymakers is whether and where specific adaptation actions are beneficial, what new policies are needed to support adaptive action, and what existing policies need to be changed or scrapped.
Analysis Papers, written by experts in this field, provide a comprehensive exploration of the costs and benefits of one solution to climate change.
Perspective Papers provide a critique of the assumptions and calculations used in the Analysis Paper, and provide another expert opinion on this solution to climate change.
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Prof. Carlo Carraro
Author of An Analysis of Adaptation as a Response to Climate Change. Prof. Carlo Carraro is Professor of Environmental Economics at the University of Venice. He holds a Ph.D. from Princeton University and has been Vice Provost for Research Management and Policy of the University of Venice (2000-2006) and chairman of the Department of Economics (2006-2008). Prof. Carraro is Director of the Sustainable Development Programme of the Fondazione Eni Enrico Mattei and Director of the Climate Impacts and Policy Division of the Euro Mediterranean Centre for Climate Change (CMCC).
Dr. Francesco Bosello
Co-author of An Analysis of Adaptation as a Response to Climate Change. Dr. Francesco Bosello is a Researcher at the Department of Economics, Business and Statistic, University of Milan, Italy and senior researcher at the Fondazione Eni Enrico Mattei in Milan. He graduated in economics at the University Ca 'Foscari of Venice, then achieved the title of Master of Science in Economics from University College of London (UK) and PhD in Economics from the University of Venice. Previously has been visiting scientist at the International Center for Theoretical Physics Abdus Salam in Trieste and Research Assistant at the University of Venice.
Dr. Enrica De Cian
Co-author of An Analysis of Adaptation as a Response to Climate Change. Dr. Enrica De Cian is a Junior Researcher at the Fondazione Eni Enrico Mattei in Venice. In 2008 she graduated in “Economics and Organization” at the School of Advanced Studies in Venice. In 2006-2007, she was visiting student at the MIT Joint Program on the Science and Policy of Global Change, at the Massachusetts Institute of Technology. Her main research interests are technological change and the environment; mitigation and adaptation policies; climate coalitions.
Dr. Samuel Fankhauser
Author of A Perspective Paper on Adaptation as a Response to Climate Change. Dr. Samuel Fankhauser is a Principal Fellow at the Grantham Research Institute on Climate Change and the Environment at the London School of Economics He also serves as Chief Econmist for Globe International, the international legislators forum, and is a member of the Committee on Climate Change, an independent public body that advises the UK government on its carbon targets. Dr. Fankhauser served on the 1995, 2001 and 2007 assessments of the Intergovernmental Panel on Climate Change (IPCC).
Dr. Frank Jotzo
Author of A Perspective Paper on Adaptation as a Response to Climate Change. Dr. Frank Jotzo is Research Fellow at the College of Asia and the Pacific, Australian National University, and Deputy Director of the ANU Climate Change Institute. He specializes in the economics and policy of climate change. He has worked and published on these topics and other aspects of international and development economics since 1998, and has advised several governments on climate policy.