Climate Change Risks and Adaptation

Linking Policy and Economics

image of Climate Change Risks and Adaptation

Climate change is giving rise to diverse risks, ranging from changing incidences of tropical diseases to increased risks of drought, varying widely in their potential severity, frequency and predictability. Governments must integrate the management of these climate risks into policy making if they are to successfully adapt to a changing climate. Economic analysis has a vital role to play in supporting these efforts, by identifying costs and benefits and supporting decision-making for an uncertain future. However, this analysis needs to be adapted to the institutions, policies and climate risks in a given country. Building on the experience of OECD countries, this report sets out how the latest economic evidence and tools can enable better policy making for adaptation.



Financing adaptation in OECD countries

The chapter examines how OECD countries can finance adaptation to manage climate-related risks. It first analyses the financing of risk reduction investments and risk transfer mechanisms. It also discusses possible options for governments to absorb the liabilities arising from residual risks. Furthermore, the chapter explores the role of governments in supporting the further uptake of financial instruments at the national, sub-national and sectoral levels.


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