Attachments
Executive Summary
The impacts of climatic shocks are already being felt across Europe and are bound to intensify in line with further climate change. Even rapid and far-reaching progress on decarbonization cannot avoid the extent of climate change that is already locked in due to past emissions. These trends call for urgent climate adaptation investment strategies that can prepare countries for a wide range of climate hazards and their complex impacts across communities and economic sectors. However, formulating concrete investment strategies can be challenging as adaptation needs are vast and difficult to estimate. To overcome this challenge, this report reviews evidence-based prioritization and costing approaches and illustrates their application in a series of case studies. These approaches can support policy makers in identifying bankable and effective adaptation investments, raising and allocating adequate financing, and thus ultimately facilitating more effective climate change adaptation across Europe.
Why Europe needs to adapt to and mitigate climate change at the same time
Europe urgently needs to scale up investments in climate adaptation. The continent is warming faster than any other global region,33 with economic losses mounting precipitously. From 1980 to 2022, weather and climate-related events across the European Union caused total losses of about €650 billion, or around €15.5 billion per year.34 Under climate change, annual economic losses are projected to rise significantly from these levels; for example, under a high emission scenario, EU GDP could be 7 percent lower than in the baseline by a conservative estimate.35 Across all scenarios, losses could reach 2.2 percent of GDP by 2070, and one-quarter of EU regions could experience GDP losses greater than 5 percent, noting that these estimates do not take tipping points into account.36 Europe will have to deal with more frequent and intense climate events37 that stretch preparedness and response capacity and will need to promote structural changes to deal with systemic impacts on all economic sectors.38 Evidence suggests the continent is unprepared for the larger disasters already being experienced, as illustrated by the losses from floods in 2021 (more than €40 billion in Germany),39 drought in 2022, and increasingly disruptive seasonal heatwaves and wildfire seasons.
Immediate action is required, both for climate mitigation and climate adaptation, starting now and building into the future. Climate change adaptation (CCA) is essential not only to bolster climate resilience and curtail losses but to reap additional socioeconomic and environmental benefits. It is complementary to climate change mitigation (CCM), as the next twenty years of climate change are already locked in, and early action is needed to prepare for the possible larger changes that will follow. The potential for adaptation is limited, however. Soft limits apply where current approaches may be insufficient and scaling up is needed to overcome constraints, while hard limits require very different and more transformational adaptation. Adaptive capacity may, indeed, decrease or be insufficient to cope with the scale of change needed, depending on interactions between socioeconomic and climate scenarios and on residual impacts that could be substantial, particularly affecting vulnerable people and communities. Even under a best-case 1.5°C degree warming scenario, certain global, climate, and socioeconomic tipping points40 may already have been reached. With warming between 2° and 4°C, ten of sixteen climate tipping points (five global and five regional)41 could be reached; these include a significant ice loss in the Barents Sea and an ice-free Arctic, which would have a direct impact on Europe.42 The commitment of the EU and its Member States to CCM and CCA is enshrined in and empowered by an underpinning framework. At EU level, this commitment is anchored in several different legislative frameworks, strategies, and action plans, particularly the European Climate Law, the Green Deal, including the EU Adaptation Strategy, as well as the Nature
Restoration Law presently under discussion.43 The EU is committed to disaster resilience through initiatives that include, notably, the EU-wide Disaster Resilience Goals (DRGs), which set four key priority areas for the European Commission (EC) and the Member States.
At the national level, EU Member States have also committed to accelerating efforts toward disaster prevention and preparedness and CCA through disaster risk management (DRM) and CCA plans, as well as legislation in line with EU and international standards and agreements. Opportunities exist to translate this commitment into effective and feasible forward-looking actions, such as increasing the funding available to tailor and integrate CCM and CCA interventions.
Acting on both climate mitigation and adaptation is economically beneficial and has broader social and environmental benefits. Together these actions can reduce direct losses resulting from disaster and climate impacts while enhancing growth and providing trade and job opportunities, productivity gains, emission reductions and air quality improvements, ecological value, and biodiversity.
Studies show that adaptation can, for example, be extremely cost effective in reducing economic losses from climate change–related coastal and river floods.44 A recent report from the World Bank and the EC reviewing more than seventy investments across Europe has also shown that investments with a portfolio of measures addressing disaster risks can deliver high benefit-cost ratios and a triple dividend, with numerous co-benefits.