Climate risk clouds infrastructure development

(...) Climate adaptation remains an ill-defined subject. The EDHEC Climate Institute recently held its EC-EIB Adaptation Days conference, and delegates lamented that climate adaptation is often conflated with climate mitigation. The case for net zero is well accepted: that the world must decarbonise or face the consequences of a three-to-five-degree Celsius increase in global average temperature by 2100 relative to pre-industrial levels, in a worst case scenario.

But where adaptation differs from mitigation is that it needs to happen over a much shorter timeline. Nicolas Schneider, a senior research engineer-macroeconomist at EDHEC Climate Institute, notes in a recent article discussing his work on modelling the economic impact of climate change, “It is widely acknowledged that mitigation strategies are likely irrelevant over a mid-century horizon.” In other words, the premise of climate adaptation is that, over the next 25 years, the incidence and severity of extreme weather and climate shocks will increase substantially. 

For instance, a study published by the European Commission in 2022 projects economic losses from natural disasters to increase at least two- to three-fold in the EU by 2050. And for Schneider, even this is a charitable estimate. He argues that estimates of the impact of climate change on GDP are too low. If an analysis accounts for small-scale variations in localised climatic exposure and intra-country economic heterogeneity, aggregate losses start looking greater. (...)