Making agriculture, energy and transport climate resilient: how much money is required and what will it deliver?

This briefing outlines the long-term benefits of investing in climate resilience. It presents the costs of enhancing resilience in some of Europe’s most climate-vulnerable sectors and describes the benefits for EU’s economy and society. In times of limited budgets and numerous challenges, any investment decision needs to be taken with care.

Key messages

• Agriculture, energy and transport are among the sectors most vulnerable to climate change (EEA, 2023a; Figure 3). Making these sectors climate resilient may require estimated investments of between EUR 53bn and 137bn annually by 2050 and a further EUR 59-173bn annually by 2100 depending on the climate emissions scenario. Current committed funding levels are estimated at just EUR 15-16bn per year for these sectors (Neumann, T. et al. (2026)).
• Climate adaptation and resilience support Europe’s competitiveness, security and innovation. Well-chosen adaptation measures can unlock economic potential and generate societal benefits – on top of avoiding economic losses.
• For climate adaptation and resilience to be most effective it must happen early – and ideally now – in order to support also climate mitigation efforts.

Costs of adaptation for agriculture, energy and transport

For a long time, climate adaptation received relatively little attention in climate change discussions, which were dominated by efforts to reduce greenhouse gas emissions. The rising frequency and severity of climate-related disasters, however, has pushed adaptation higher up the policy agenda and contributed to a broader shift in public perception. In a 2024 survey conducted by the European Investment Bank (EIB, 2024), 94% of EU respondents recognised the importance of adapting to climate change, while 50% indicated that adaptation should be prioritised. Climate adaptation cannot substitute climate mitigation, even though certain measures can bring co-benefits to mitigation. Early and proactive adaptation measures are crucial for reducing risks and preventing losses, particularly in the medium term. Timely action can strengthen resilience, lower future costs and help communities better cope with climate impacts.

In the long term, the potential of adaptation may be limited or goals may be achieved only at very high costs. For example, estimates suggest that the annual investment would need to double for a temperature rise from 1.5°C to 2°C above pre-industrial levels. For an increase to 3°C, it could roughly quadruple (COACCH, 2021; JRC, 2022). Beyond rising temperatures, this reflects increased weather variability as well as more frequent and intense extreme events. To avoid a large share of future economic losses, investing in climate adaptation is most effective now (along with continuing mitigation efforts).

The estimated costs of adaptation for all three sectors range between approximately EUR 53bn and 137bn per year until 2050 and EUR 59-173bn annually between 2051 and 2100. These numbers represent the lower and upper ranges of the estimates and depend on the time horizon and climate scenario (moderate vs high emissions). In view of the current pace of climate change and global mitigation efforts, this analysis focuses on medium and high emissions scenarios. For further details on the methodology, please refer to Box 3 below.

For comparison, the EU experienced annual economic losses of around EUR 40-50 bn per year between 2021 and 2024 due to extreme weather events, totalling EU 822bn over the period 1980-2024 (EEA, 2025a). In fact, the years 2021-2024 represented the top five highest annual economic losses since 1980. As those figures account for direct losses only, the sum of total costs will be higher. Moreover, severe weather- and climate-related extreme events are expected to intensify, driving further economic losses.

As explained above, the costs of adaptation (i.e. estimated finance needs to plan, implement and maintain measures aimed at reducing vulnerability to climate change impacts) depend on the success of global climate mitigation efforts. In other words, the slower, more moderate the climate warming, the lower the costs to adapt to the ‘new normal’.

However, the reverse is also true: research highlights that investment in climate adaptation can also generate benefits for climate mitigation, creating a so-called ‘double dividend’.

Benefits of climate adaptation

While the costs of investing in adaptation may seem high, increasing adaptive capacity will bring greater benefits to the economy and society overall. However, to make well-informed choices about individual climate adaptation measures, it is important to consider both costs and benefits. EEA (2023b) discusses in detail the methods to be used when deciding on climate adaptation measures.

When discussing and assessing the benefits of climate adaptation, two separate concepts are relevant. First, in this context the ‘double dividend’ refers to the idea that well-designed investments in climate adaptation can generate two types of benefits at once:

Reducing climate risks (adaptation dividend). Investments protect people, infrastructure and economies from the damages caused by extreme weather, sea-level rise and other climate impacts.  Cutting greenhouse gas emissions or boosting sustainability (mitigation dividend). Many adaptation measures also reduce greenhouse gas emissions or support long- term climate goals.

The following non-exhaustive list of examples illustrates how different adaptation measures can also benefit mitigation:

• Nature-based solutions: restoring wetlands both protects against floods and stores CO2.
• Resilient agriculture: improved soil management, agroforestry and the use of drought-resilient crops increase resilience to droughts and heat extremes, safeguarding food production and farmer incomes. Measures also enhance carbon sequestration and reduce GHG emissions from farming.
• Sustainable transport and infrastructure: flood- and heat-resilient roads, bridges and rail lines reduce damage and avoid emissions from reconstruction. Electrified and expanded public transport shifts travel away from fossil fuels. Green infrastructure and urban shading help manage flooding and heat, while lowering energy demand. Smart traffic systems maintain traffic flow during extreme weather, cutting congestion and fuel use.
• Energy-efficient and climate-resilient buildings: upgrading buildings for heatwaves or storms often includes better insulation and ventilation. Measures cut energy use and reduce emissions while protecting health and productivity.
• Resilient energy storage and distribution: smart grids use sensors and advanced controls to optimise energy use in real time enabling greater integration of renewable energy, while enhancing system resilience. Energy storage solutions further buffer variability in supply and protect against disruptions. 

Second, the ‘triple dividend of resilience’concept aims to broaden the scope of disaster risk management (DRM) and emphasises open thinking when considering benefits from climate adaptation. The framework identifies three ‘dividends’ as sources of benefits.

The adaptation funding gap is calculated as the difference between funding needs and funds committed.

Current adaptation funding for EU transport and energy sectors is between EUR 3.35-3.85bn and 2.36-2.47bn, respectively. A significant adaptation funding gap exists for both sectors, which escalates under more severe climate scenarios and over longer time horizons.

For agriculture, current funding is estimated at EUR 9.3-9.8bn annually. This estimation reveals a notable funding gap under the high emissions scenario that widens over time. While the latest estimates suggest the funding situation may not be concerning under the moderate scenario for shorter time horizons, the European Climate Risk Assessment (EUCRA) concludes that the agriculture sector is not yet sufficiently resilient (EEA, 2024). In particular, no other sector may be as exposed to the negative impacts of extreme weather events (such as heatwaves and droughts, heavy rain and floods). Furthermore, there are large region-specific differences across Europe, with southern Europe most affected.

The combined current annual funding gap for all three sectors is estimated to range from a deficit of EUR 39bn to EUR 120bn under the moderate and high emissions scenario respectively up to 2050. This grows to between EUR 44bn and EUR 157bn until 2100, depending on the scenario.

EU strategic focus: climate resilience strengthens competitiveness, security and innovation

The impacts of climate change should not be considered in isolation. They are tied closely to other European challenges, including food security and competitiveness. Recent shocks such as international trade tariffs and the war in Ukraine have added further pressure to long-standing structural problems.

To address these challenges, the European Commission presented several key documents in 2025, including the Competitiveness Compass, the Clean Industrial Deal, the Vision for Agriculture and Food, the Affordable Energy Action Plan, the Strategic Foresight Report on ‘Resilience 2.0’ and the European Preparedness Union Strategy. The latter draws particular attention to the links between climate and security. Its goal is to help Member States and the EU more broadly anticipate and better respond to emerging threats. This strategy sets out 30 initiatives and an action plan, with a strong focus on resilience to climate risks and environmental pressures. Importantly, it tasks the European Commission with developing a dedicated European climate resilience and risk management - integrated framework to strengthen preparedness and climate resilience across the EU. Further details are expected in 2026.