Yet despite these compelling economics, significant protection gaps remain today, even before considering prospective climate change. Closing these gaps and protecting against future warming will require concerted and coordinated action to safeguard assets, essential services, economic activity, and livelihoods.
An existing resiliency gap
The research, Advancing adaptation: Mapping costs from cooling to coastal defenses, draws on granular, geospatial analysis of the evolution of hazards and 20 tried-and-true adaptation solutions that protect against them.
We estimate that current global adaptation spending of roughly US$190bn per year protects about 1.2 billion people from heat, drought, wildfires and flooding. But bringing protection up to developed-economy standards for all 4.1 billion people already living in places exposed to climate hazards would require roughly US$540bn annually—around three times today’s level.
The resulting US$350bn resiliency gap has real implications for people and economies. Where adaptation is limited, day-to-day economic activity and livelihoods may be affected, communities and governments may incur damages to homes and public infrastructure, and supply networks can be disrupted by events such as crop failures and localised infrastructure damage.
The case strengthens as warming advances
Going forward, adaptation costs are set to rise.
On current emissions trajectories, the world is likely to reach 2°C above preindustrial levels by about 2050, exposing an additional 2.2 billion people to heat stress, for example, and another 1.1 billion to drought.
Given that many adaptation measures can take a decade or longer to implement and have lifetimes of multiple decades, planning for 2°C of warming is important, even as decarbonisation efforts continue.
As exposure spreads and hazards intensify, adaptation costs increase. Our analysis finds that at 2°C, the world would need to spend US$1.2tn annually to protect everyone living in a place exposed to climate hazards at developed-economy standards, or almost 1% of GDP in those places. More than three-quarters of that spending would go toward protecting against heat and drought.
That may seem expensive, but as noted, the benefits of that adaptation would exceed its cost by roughly seven times. Air conditioners protect and improve the productivity of indoor workers. Cooling shelters save lives in heat waves. Irrigation prevents crop damage in hot, dry conditions. Sea dikes shield assets along coastlines from flooding. Deployed effectively, such solutions deliver immense value.
A good buy, but spending is not guaranteed
So why aren’t we investing more? Even with strong returns, adaptation competes with other nearer-term priorities. Many measures require meaningful upfront investment, and not all organizations have balance-sheet flexibility or budget capacity to absorb those costs. Decisions are shaped by differing risk tolerances and sometimes limited visibility into where exposure sits. And when the payoff feels uncertain, long-dated or hard to translate into a standard business case, the incentive to adapt is low and action is easily deferred.
Even when the economic case is clear, execution can be hard. Adaptation projects often require multistakeholder coordination, face technical and delivery constraints, and involve long lead times that can be difficult to reconcile with annual budget cycles and planning timelines.
The path forward
To close today’s protection gap—and keep pace as hazards intensify—stakeholders can focus on four practical levers.
- Improve understanding. Adaptation starts with knowing where risk sits and what actions pay off. That means identifying exposure across sites and critical infrastructure, assessing risks to key suppliers and logistics routes, and pairing that view with proven solutions and clear investment cases.
- Create the right incentives. Ranging from zoning and land-use planning to building codes and infrastructure standards, incentives can help make adaptation the norm rather than the exception. Companies also have a clear role, helping to normalize adaptation by embedding it into the standards they control, for example, site-selection criteria, design specs, procurement requirements, and by offering targeted technical or financial support to suppliers to support their resilience.
- Make adaptation more affordable. Scaling protection requires reducing upfront costs and making solutions more efficient and cost-effective to operate. Companies with capabilities in resilient infrastructure, technology, and analytics can help improve the affordability and effectiveness of adaptation measures to increase the likelihood of their adoption.
- Implement well. In a world of competing priorities and finite resources, carefully selecting, coordinating and executing high-priority adaptation measures is critical. In practical terms, this could include prioritizing “no-regrets” measures with high benefit-to-cost and short lead times, such as heat action plans, early-warning systems, and cooling solutions. It also could look like designing long-lived assets—facilities, drainage, and power and water systems—for future conditions to avoid costly retrofits and embedding resilience into capital planning as hazards evolve.
Effective adaptation can help limit losses, protect people and essential services, and support economic growth as the climate warms. The tools are largely available, and the economics are compelling.
The opportunity for decision makers now is to turn that case into action—protecting critical assets and systems and scaling proven solutions where they’re needed most.
This article originally appeared in Sustainability Magazine.