Climate-policy debates tend to focus on reducing greenhouse-gas emissions. This makes sense, given that GHGs are the primary cause of climate change. But global warming is expected to continue even under the most optimistic scenarios, implying an urgent need for comprehensive strategies to minimize the economic costs, public-safety risks, and health threats associated with the escalating climate crisis.
While some experts argue that full adaptation is impossible, owing to the significant risks posed by global warming, this view is misleading. Admittedly, adaptation alone cannot offset the worst effects of climate change, and current efforts to reduce global GHG emissions must be ramped up. But overlooking the need to develop, implement, and invest in strategies aimed at protecting businesses, households, and communities from the inevitable consequences of a warming planet would be profoundly irresponsible.
Flood protection is a prime example. As inundations become more frequent and severe, restoring floodplains and other proactive measures have become increasingly important. Long-term adaptation should also play a central role in post-disaster reconstruction projects. Instead of repeatedly repairing damaged houses, for example, it might be more prudent to rebuild them in less flood-prone areas.
Adaptation efforts are only as effective as the mechanisms to finance them. While many taxpayers understandably support funding reconstruction efforts, doing so can create incentives for construction in vulnerable areas. Instead, these funds would be better spent on measures that protect communities against future flooding, not just building new houses in safer areas, but also investing in targeted research and innovation aimed at helping sectors affected by climate change, particularly agriculture, adapt to the threat.
Increasingly dangerous heat waves also underscore the urgent need for adaptation measures. Although record-breaking temperatures pose significant health risks, particularly for the elderly, pregnant women, and people with pre-existing conditions, countries like Germany are still reluctant to invest in air conditioning systems and other cooling methods. But such systems do not require fossil fuels; they can be powered by solar energy, which is abundant during hot periods.
Extreme heat is especially risky for outdoor workers, highlighting the need to update occupational health and safety laws. Companies must be required to have measures in place to protect their employees, such as providing shaded areas and access to drinking water.
Given that low-income earners often work in high-risk conditions, climate adaptation offers far-reaching social benefits. The ability to implement such measures is, however, largely restricted to households, municipalities, regions, and countries with sufficient financial resources and technical expertise. Without adequate adaptation strategies and financing mechanisms, impoverished individuals and communities will disproportionately bear the brunt of climate change, further deepening economic and social disparities both locally and globally.
In principle, households and companies should approach adaptation like any other investment decision. Instead of pursuing every option, they should focus on those that offer the greatest value, similar to how an entrepreneur would evaluate various expenditures.
To be sure, adaptation efforts face numerous obstacles, including uncertainty about the future trajectory of climate change and the high costs associated with modifying existing structures and processes. Moreover, the scarcity of information on effective adaptation measures and how they could be implemented within current legal frameworks could drive up costs. All of this could depress investment in adaptation, especially since the benefits may be realized only in the medium to long term.
Nevertheless, both governments and the private sector must make climate adaptation a top priority. By anticipating risks and taking proactive steps to adjust their operations, companies could reduce implementation costs. Meanwhile, policymakers must invest heavily in building resilient infrastructure, supporting research and innovation, and disseminating vital information to households, businesses, and local authorities to help them prepare for various climate-related challenges, including floods, heat waves, and other extreme weather events.
Adaptation is not just a practical necessity; it is a moral imperative. While reducing GHG emissions is necessary, adaptation is equally important to ensuring that the world’s most vulnerable populations do not bear the brunt of the most devastating effects of climate change. By placing adaptation measures at the heart of climate policies, alongside mitigation, we can create a future that is both resilient and equitable.
By Clemens Fuest, President of the Ifo Institute, Professor of Economics at the University of Munich and Maria Waldinger, a climate economist at the Ifo Institute in Munich.
© Project Syndicate 1995–2024
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