, Volume 118, Issue 2, pp 367-379
Date: 12 Dec 2012

An economic approach to adaptation: illustrations from Europe

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Abstract

Policy makers are still struggling to find a rational and effective way to handle adaptation to climate change. This paper discusses a more strategic, economic approach to public adaptation and compares it with adaptation practice in Europe. An economic approach to adaptation involves setting priorities, both spatially (where to adapt) and inter-temporally (when to adapt). The paper reviews what we know about Europe’s geographic adaptation priorities. On inter-temporal priorities, it recommends fast-tracking two types of action: Win-win measures that yield an immediate return, such as water efficiency, and strategic decisions on infrastructure and spatial planning that have long-term consequences for Europe’s vulnerability profile. An economic approach to adaptation involves careful project design to ensure adaptation measures are cost-effective and flexible in the light of climate uncertainty (how to adapt). The final element of an economic approach to adaptation is the division of labour between the state and private actors (who should adapt). The paper argues that the traditional functions of the state—the provision of public goods, creation of an enabling environment and protection of the vulnerable—also apply to adaptation.