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The Economics of Climate Resilience

Multiple Authors

The Economics of Climate Resilience (ECR) has been commissioned by Defra and the Devolved Administrations (DAs) to inform the UK’s first National Adaptation Programme and the adaptation plans of the DAs. The Climate Change Risk Assessment (CCRA) identified many climate change risks and opportunities. Unless appropriate adaptation action is taken to respond to these, the UK could incursignificant costs – both financial andwelfare costs – or miss out on important opportunities. The analysis investigates current and likely adaptation actions and identifies the key barriers to actions being widely implemented, effective, timely and proportionate to the challenges facing the UK.

These issues have been investigated by addressing a series of 12 questions specified by government policy officials. Analysisis presented within nine reports which cover the five themes of the CCRA: agriculture and forestry; buildings and infrastructure; health & well-being; business & services; and, the natural environment.

The analysis draws on a vast base of published evidence and advice and input from experts across industry, the voluntary sector, the health service, local authorities, scientists, policy-makers, Non-Government Organisations, Non-Departmental Public Bodies, academia, researchers, trade associations and regulators, among others. Around 200 interviews with stakeholders were undertaken.

This synthesis report draws together the key findings and recommendations of the work for policy makers, with a particular focus on cross-cutting issues. They relate only to issues within the scope of the specified questions. Important issues outside the scope of the questions should be considered through separate analysis. The questions addressed in each report are of the following form:

Given projected climate change and current and expected adaptation, is there a case for further intervention by Government or other bodies?

Overarching Findings

The analysis finds that many individuals and organisations are already taking, or are likely to take, action to adapt to climate change. In particular, in the areas within the scope of this analysis, actions are more likely to be taken effectively where:

  • There are well understood risks, particularly in organisations with in-house capability to prepare and respond e.g. asset assessment in the Highways Agencyor National Grid; emergency planning in hospitals
  • There are few indirect risks orinter-dependencies with other sectors e.g. hospital continuity is weakened by dependence on the resilience of service providers
  • Support networks exist for individuals and smaller organisations, particularly where they have fewer resources and cannot plan for the long term, e.g. vets and feedadvisers for dairy farmers
  • There is strong organisational structure and leadership and coordination between organisations, typically in large organisations in complex sectors service
  • There is a stable, supportive and transparent policy environment so organisations may plan and take effective action e.g. Civil Contingencies Act 2004 hascontributed to resilience planning in hospitals. Although in some cases, even where there is stability, the current framework can hinder action (e.g.fisheries)
  • Planning and processes are flexible and embedded into decision-making
  • There has been previous experience of a climate change impact (although this can also weaken capacity) – this highlights the importance of sharingexperiences and learning from others.

Cross-cutting barriers

Although many actions are already being taken, the analysis suggests that particular barriers constrain wider implementation, or hinder the effectiveness of actions taken. Individual ECR reports highlight these barriers in detail. Cross-cutting barriers covering market failures, policy failures, behavioural constraints and governance issues, are as follows, most of which relate to a lack of adaptive capacity:

  • Market failures:inter-dependency across infrastructure systems and supply chains can create costs on others that decision makers do notaccount for, e.g. information failures – information can often be toomuch, too little, out of date or confusing; there is a lack of user-friendlyappraisal guidance to guide decision-makers in assessing costs andbenefits of actions; and there is a lack of evidence on the costs andbenefits of actions and the conditions under which they would beeffective.In addition,small and medium sized organisations often lack theresources,skills and analytical tools to take effective action.
  • Policy failures: lack of understanding of policy trade-offs, andconflicting policy objectives or missed opportunities to integrate climatechange into policy can lead to maladaptation (e.g. retrofitting housing foremissions mitigation without accounting for adaptation) or lack of clarity.
  • Behavioural barriers: often arise among vulnerable groups, whogenerally have relatively low adaptive capacity; may perceive they are atrisk and can be marginalised from emergency planning processes
  • Governance issues: arise from diversity in responsibility and coordination failure where sectors are fragmented and many parties areinvolved in adaptation actions

Research Papers

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