Investment in climate adaptation represents a solid economic opportunity that can support long-term growth and financial stability, a new report from the London School of Economics (LSE) has suggested.
The report, The Macroeconomic Case for Investing in Climate Adaptation, which was penned by LSE’s James Rising, Nick Godfrey, Paul Watkiss, Swenja Surminski, Daniela Baeza Breinbauer, María Paula Gutiérrez-Hurtado and Maria João Pimenta, sets out the macroeconomic case for investing in climate adaptation, adding that the economic consequences of climate change are likely to intensify without greater investment in adaptation measures.
“Reducing emissions is essential – full stop,” commented Swenja Surminski, professor in practice at the Grantham Research Institute on Climate Change and the Environment at LSE.
“But it’s not a substitute for adaptation. We don’t get to choose between cutting emissions and adapting to their impact. The climate change that’s already locked in demands both.”
Adaptation measures
As the report noted, urgent climate adaptation measures should include the development of resilient infrastructure, the implementation of nature-based solutions, the rollout of early warning systems, and the deployment of disaster risk financing instruments.
“This has now become urgent because the physical impacts of climate change are already materialising and intensifying,” Surminski added. “Our report shows these impacts are no longer a distant risk: they are already affecting economies today and are expected to grow significantly without stronger adaptation efforts.”
The report draws on close to 300 studies and more than 6,000 individual estimates, and was undertaken in partnership with the Coalition of Finance Ministers for Climate Action.
Scaling adaptation
As the authors note, the scale of adaptation will need to accelerate in the coming years to prevent the economic losses from climate change escalating – climate change could reduce global GDP per capita by between 3% and 15% by 2050 under plausible warming scenarios.
These impacts are likely to be greatest in low-income and lower-middle-income countries, where the GDP impact could be between 8% and 18% – or 20% in some instances.
“Crucially, the report highlights that even this extensive evidence base is likely to underestimate the true scale of impacts,” Surminski noted. Read more here.
