Plan or React? ANALYSIS OF ADAPTATION COSTS AND BENEFITS USING INTEGRATED ASSESSMENT MODELS

Financing for adaptation is a core element in the ongoing international negotiations on climate change. This has motivated a number of recent global estimates of adaptation costs. This report examines adaptation and mitigation within an integrated framework, Global and regional costs of adaptation are assessed dynamically and the resulting benefits are also quantified. This is accomplished by developing a framework to incorporate adaptation as a policy choice variable within three Integrated Assessment Models: the global Dynamic Integrated model of Climate and the Economy, the Regional Integrated model of Climate and the Economy, and the World Induced Technical Change Hybrid model. Results show that all types of adaptation options are important in offsetting some of the adverse impacts of climate change. In terms of timing, investments in building adaptation stocks become effective with a time delay, and should ideally be implemented early, while reactive forms of adaptation become increasingly necessary as climate damages increase and the returns from preventive investments in adaptation stocks become limited.