Total Costs and Budgetary Effects of Adaptation to Climate Change: An Assessment for the European Union

46 Pages Posted: 27 Jul 2010

See all articles by Daniel Osberghaus

Daniel Osberghaus

ZEW – Leibniz Centre for European Economic Research

Christiane Reif

ZEW – Leibniz Centre for European Economic Research - Environmental and Resource Economics, Environmental Management Research

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Date Written: July 1, 2010

Abstract

Adaptation to climate change is gaining increasing relevance in the public debate of climate policy. However, detailed and regionalised cost estimates as a basis for cost-benefit-analyses are rare. We compose available cost estimates for adaptation in Europe, and in particular Germany, Finland and Italy. Furthermore, a systematic overview on fiscal aspects of adaptation is provided, with focus on budgetary effects of adaptation in the different impact sectors. Combining cost estimates, considerations on fiscal aspects and governmental interventions in adaptation processes, we present data-based guesses of public adaptation costs in the EU, divided by impact sectors. The findings show an expectedly large public burden in the adaptation of transport infrastructure and coastal protection, while high adaptation costs in the agriculture sector are predominantly private. The change in energy demand may well lead to a significant decrease in public expenditure. Considering the regional heterogeneity of adaptation measures and the high uncertainty of quantitative adaptation analyses, further research in the form of bottom-up-studies is needed.

Keywords: Adaptation, Climate Change, Adaptation Costs, Fiscal Effects, Governmental Intervention

JEL Classification: H54, Q54, Q58

Suggested Citation

Osberghaus, Daniel and Reif, Christiane, Total Costs and Budgetary Effects of Adaptation to Climate Change: An Assessment for the European Union (July 1, 2010). ZEW - Centre for European Economic Research Discussion Paper No. 10-046, Available at SSRN: https://ssrn.com/abstract=1649452 or http://dx.doi.org/10.2139/ssrn.1649452

Daniel Osberghaus (Contact Author)

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany
+49-621-1235205 (Phone)

Christiane Reif

ZEW – Leibniz Centre for European Economic Research - Environmental and Resource Economics, Environmental Management Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim
Germany

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