Strengthening the investment case for climate adaptation: A triple dividend approach

This paper discusses how using the Triple Dividend of Resilience (TDR) framework to evaluate the full benefits of 320 climate adaptation and resilience investments across 12 countries can reveal their full value. The adaptation investments analyse are those approved by multilateral development banks (MDBs) and other international climate finance institutions, for their implementation across four key sectors - agriculture, health, water, and infrastructure - from 2014 to 2024. These investments were compiled into the Adaptation Triple Dividend of Resilience (AdapTDR) database, which details their objectives, components, costs, benefits, net present values (NPVs), and economic internal rates of return (EIRRs) using standard cost-benefit analysis (CBA) and the TDR framework.

The paper then gives its six key findings, followed by five recommendations. The findings are as follows:

1. The benefits of adaptation investments fall across three dividends: avoided losses, induced economic development, and social and environmental benefits.
2. The average return on investment (ROI) for evaluated climate adaptation investments is 27 percent.
3. Over half of all monetized benefits of the evaluated investments do not depend on whether the anticipated climate-related disaster occurs.
4. Extensive second-dividend (induced economic development) benefits position adaptation as a key part of a public growth and development narrative.
5. Half of the evaluated adaptation investments yield mitigation co-benefits.
6. Complete and publicly available data on the projected and realized benefits of adaptation investments are lacking.