Integrated economic assessment of policy instruments for adapting to climate change

Regional climate models show that the adverse effects of climate change, e.g. heat waves or heavy rain storms, will continue to increase in intensity in Germany. The German Federal Government seeks to establish incentives and financing structures to support various actors in adapting to these impacts.

The consortium developed economically founded recommendations for modifying existing policy instruments or introducing new ones for this purpose. This includes, for example, grant programs for coastal protection or insurance schemes for private actors. The recommendations are based on a critical analysis of data from the economics of climate change and of barriers to private adaptation in Germany. The focus lies on an integrated, cross-sectoral assessment whereby non-marketable damages are also accounted for in the cost-benefit-analysis. Throughout the project, the research results were communicated to decision-makers in policy briefs. These documents touched on issues such as advantages and disadvantages of mandatory flood insurance, implications of behavioural economics for adaptation policies and the options for integration adaptation into environmental management systems.