Shaping climate-resilient development

Even if all carbon emissions were stopped today, the world’s climate would continue to change. This means we have to adapt to the consequences. Investing in measures that help communities cope with floods, droughts and severe storms will go a long way to preparing them for a future marked by more weather extremes and natural disasters.

Societies need to understand how they can adapt to climate change. This is a particularly important priority for development planners and policymakers, such as finance ministers and mayors. They need to know how their countries, cities and communities will be affected by climate change and which adaptation measures can avert future losses at the lowest cost to society.

The Economics of Climate Adaptation (ECA): Shaping climate resilient development (PDF, 6.0 MB) is a guide that seeks to provide the answers. Two new ECA factsheets with a focus on infrastructure (PDF, 3.0 MB) and a focus on fast-growing coastal communities (PDF, 3.0 MB) provide a quick overview of the ECA methodology. It gives decision-makers the facts to understand the risks that climate change poses and enables them to integrate adaptation measures into economic development planning.

Here's how the ECA works:


We have conducted ECA studies in over 20 urban and rural locations around the world, representing a variety of climate hazards, economic impacts and development stages. They include the cities of New York and Hull, the US Gulf Coast and southern Florida, rural India, China, Mali and Tanzania, as well as fast growing coastal communities in Guyana, Samoa and eight Caribbean island states.

Our studies found that existing climate patterns are responsible for annual losses of 1-12% of GDP and are likely to rise up to 19% of GDP by 2030. This is a worrying trend. But the good news is that cost-effective adaptation measures such as green infrastructure, flood defences and strengthened buildings, can prevent up to 65%of the expected economic loss in these regions. For rare but severe events, risk transfer can efficiently provide additional protection by capping losses and smoothing the costs of climate events (PDF, 1.7 MB).

The key is that making urban and rural communities more resilient requires a comprehensive adaptation strategy that combines risk prevention, risk mitigation and risk transfer measures. But time is of the essence. We have to act now, and we have to act together. Because well-targeted, early investments in climate protection are cheaper and more effective than costly relief efforts after a disaster has struck.

The Economics of Climate Adaptation working group is a partnership between the Global Environment Facility, McKinsey & Company, Swiss Re, the Rockefeller Foundation, ClimateWorks Foundation, the European Commission, and Standard Chartered Bank.

Updated 14 April 2014

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