Designing climate change adaptation policies: an economic framework

Policy research working paper 5568:

This report proposes a general economic framework to help stakeholders in the public sector to develop effective adaptation strategies. To do so, it lays out the general issues involved in adaptation, including the role of uncertainty and inertia, and the need to consider structural changes in addition to marginal adjustments. Then, it identifies the reasons for legitimate public action in terms of adaptation, and four main domains of action: (i) the production and dissemination of information on climate change and its impacts; (ii) the adaptation of standards, regulations and fiscal policies; (iii) the required changes in institutions; and (iv) direct adaptation actions of governments and local communities in terms of public infrastructure, public buildings and ecosystems. Finally, the report suggests a method to build public adaptation plans and to assess the desirability of possible policies.