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An economic approach to adaptation: illustrations from Europe

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  • Samuel Fankhauser

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  • Raluca Soare

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. Copyright Springer Science+Business Media Dordrecht 2013

Suggested Citation

  • Samuel Fankhauser & Raluca Soare, 2013. "An economic approach to adaptation: illustrations from Europe," Climatic Change, Springer, vol. 118(2), pages 367-379, May.
  • Handle: RePEc:spr:climat:v:118:y:2013:i:2:p:367-379
    DOI: 10.1007/s10584-012-0655-6
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    File URL: http://hdl.handle.net/10.1007/s10584-012-0655-6
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    References listed on IDEAS

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    1. Russell Sobel & Peter Leeson, 2006. "Government's response to Hurricane Katrina: A public choice analysis," Public Choice, Springer, vol. 127(1), pages 55-73, April.
    2. repec:dau:papers:123456789/7780 is not listed on IDEAS
    3. Susan Subak, 2000. "Climate Change Adaptation in the U.K. Water Industry: Managers' Perceptions of Past Variability and Future Scenarios," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 14(2), pages 137-156, April.
    4. Tol, Richard S. J., 2008. "The Social Cost of Carbon: Trends, Outliers and Catastrophes," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 2, pages 1-22.
    5. Jan Corfee-Morlot & Ian Cochran & Stéphane Hallegatte & Pierre-Jonathan Teasdale, 2011. "Multilevel risk governance and urban adaptation policy," Climatic Change, Springer, vol. 104(1), pages 169-197, January.
    6. Alex Bowen & Sarah Cochrane & Samuel Fankhauser, 2012. "Climate change, adaptation and economic growth," Climatic Change, Springer, vol. 113(2), pages 95-106, July.
    7. Stéphane Hallegatte & Fanny Henriet & Jan Corfee-Morlot, 2011. "The economics of climate change impacts and policy benefits at city scale: a conceptual framework," Climatic Change, Springer, vol. 104(1), pages 51-87, January.
    8. Hallegatte, Stephane & Lecocq, Franck & de Perthuis, Christian, 2011. "Designing climate change adaptation policies : an economic framework," Policy Research Working Paper Series 5568, The World Bank.
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    1. repec:spr:jenvss:v:7:y:2017:i:4:d:10.1007_s13412-017-0436-7 is not listed on IDEAS
    2. W. P. Pauw & R. J. T. Klein & P. Vellinga & F. Biermann, 2016. "Private finance for adaptation: do private realities meet public ambitions?," Climatic Change, Springer, vol. 134(4), pages 489-503, February.
    3. Dittrich, Ruth & Wreford, Anita & Moran, Dominic, 2016. "A survey of decision-making approaches for climate change adaptation: Are robust methods the way forward?," Ecological Economics, Elsevier, vol. 122(C), pages 79-89.

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