Climate change economics - Integrated economic assessment of climate change adaptation instruments

Background and Goals

Regional climate models show that adverse effects cause by climate change - such as heat waves or severe rain events - are set to increase in Germany. The federal government wants to support the various players in adapting to these climate effects by setting up financing and incentive structures. Therefore, this project is intended to come up with economically sound proposals for the design of political adaptation instruments. Examples include spatial planning instruments and insurance concepts for private players. The proposals are based on analysis of economic climate change data and modelling of climate costs in Germany. The focus is on a cross-sectoral integrated assessment, incorporating losses that are not normal in the market into cost/benefit analyses.

The research project has the overall objective of proposing applicable measures in the area of defining financing and incentive structures for implementing the federal government's national adaptation strategy. These measures should have an economic and specialist justification and be communicated to the appropriate decision makers. In this context, the project has the following individual objectives:

Objective 1: Creation of a critical analysis of current research on the economics of climate change, particularly adaptation to climate change.

Objective 2: Formulation of a systematic overview of specific EU, federal government and state policy instruments to promote macro-economically efficient adaptation processes, including both existing instruments and new instruments to be implemented.

Objective 3: Derivation of recommended actions for adaptation of existing policy instruments and identification of practicable proposals for the possible design of new instruments at the specified levels, based on economic and specialist arguments.

Content time


Research area/region

  • Germany

Steps in the process of adaptation to climate change

Step 1: Understand and describe climate change

Approach and results 

As the project is primarily concerned with the characteristics of policy instruments and the options for evaluating them, the analysis is not based on a specific climate scenario.

Parameter (climate signals)
  • Altered rainfall patterns
  • Higher average temperatures
  • Sea level rise und storm surges
Further Parameters 

frequency and intensity of extreme climatic events

Step 2a: Identify and assess risks - climate effects and impact

Approach and results 

Climate change will have a significant influence on living and economic conditions in Germany, e.g. due to increased storm and flood damage, heat waves and severe rain events.

Step 3: Develop and compare measures

Measures and/or strategies 

Economically sound proposals will be drawn up for the design of adaptation policy instruments.


Funding / Financing 

German Environment Agency (UBA)

Project management 

Centre for European Economic Research (ZEW)


adelphi consult


Caspar-Theyss-Strasse 14a
D-14193 Berlin

Printer-friendly version Send by email
Fields of action:
 financial services industry