The macroeconomic case for investing in climate adaptation

This report provides a groundbreaking new synthesis of the economic and fiscal risks arising from physical climate change and the economic case for investing in adaptation to climate impacts. The report combines the results of nearly 300 studies and more than 6,000 unique estimates of the consequences of climate change and adaptation investment, and includes case studies from six countries.The report shows that the macroeconomic and fiscal consequences of climate impacts are already significant, growing, and likely to continue and intensify without further efforts to adapt and increase resilience. The evidence shows that early and strategic adaptation investments can bolster economic stability, reduce debt levels and borrowing costs, and accelerate development.

The findings indicate that climate change is projected to significantly reduce global GDP per capita by 2050, with the most severe impacts in low- and middle-income countries, where losses could exceed 20%. Beyond direct economic damage, increasing extreme events and rising temperatures will lower productivity, increase inequality, and strain public finances through higher spending and reduced revenues. However, the findings show that early and well-planned adaptation investments offer high returns—preventing losses, boosting economic growth, and delivering social and environmental benefits—making proactive, government-led action essential for long-term economic stability and resilience.