Adaptation costs have been radically underestimated

This shouldn’t be news. We should have known this all along.

Actually, many of us did. Particularly those of us who do not steer our stars by the pragmatism of the moment. And those of us in the more vulnerable parts of the world.

The small island states come particularly to mind, as does Africa, the unlucky continent where the full impacts of climate-induced desertification will be felt first. In such places as these, the various estimates of “adaptation costs” (as if all impacts could be “adapted” to at any price) have long been regarded with skepticism, if not contempt.

This includes the UNFCCC’s own official 2007 estimates, embedded in the UNFCCC Secretariat’s INVESTMENT AND FINANCIAL FLOWS TO ADDRESS CLIMATE (2007, see table IX-65. And see as well its 2008 update), which though it long contained the highest authoritative adaptation cost estimates (rising to $49 to $171 billion per year in 2030) still turned out to be low-balling the problem.

With the publication of Assessing the costs of adaptation to climate change: A critique of the UNFCCC estimates, things have changed. Not that these numbers are definitive in any strong sense, or that they’re likely to stand the test of time. But the team that put “Assessing the costs of adaptation” together (for the International Institute for Environment and Development and the Grantham Institute for Climate Change at Imperial College London), a team headed by Martin Parry, a former co-chair of IPCC Working Group II) has clearly raised the bar, in terms of scientific thoroughness and rigor.

Here, in a nutshell, is the bad news:

The UNFCCC has estimated annual global costs of adapting to climate change to be US$40-170 billion, or the cost of about three Olympic Games per year.

But the reports authors warn that these estimates were produced too quickly and did not include key sectors such as energy, manufacturing, retailing, mining, tourism and ecosystems. Other sectors that the UNFCCC did include were only partially covered.

Just looking in depth at the sectors the UNFCCC did study, we estimate adaptation costs to be 2-3 higher, and when you include the sectors the UNFCCC left out the true cost is probably much greater, warns Parry, who co-chaired the IPCC working group on impacts, vulnerability and adaptation between 2002 and 2008.

The new reports key findings include:

  • Water: The UNFCCC estimate of US$11 billion excluded costs of adapting to floods and assumes no costs for transferring water within nations from areas of surplus to areas of deficit. The underestimate could be substantial, according to the new report.
  • Health: The UNFCCC estimate of US$5 billion excluded developed nations, and assessed only malaria, diarrhoea and malnutrition. This could cover only 30-50% of the global total disease burden, according to the new report.
  • Infrastructure: The UNFCCC estimate of US$8-130 billion assumed that low levels of investment in infrastructure will continue to characterise development in Africa and other relatively poor parts of the world. But the new report points out that such investment must increase in order to reduce poverty and thus avoid continuing high levels of vulnerability to climate change. It says the costs of adapting this upgraded infrastructure to climate change could be eight times more costly than the higher estimates predicted by the UNFCCC.
  • Coastal zones: The UNFCCC estimate of US$11 billion excluded increased storm intensity and used low IPCC predictions of sea level rise. Considering research on sea level rise published since the 2007 IPCC report, and including storms, the new report suggests costs could be about three times greater than predicted.
  • Ecosystems: The UNFCCC excluded from its estimates the costs of protecting ecosystems and the services they can provide for human society. The new report concludes that that this is an important source of under-estimation, which could cost over US$350 billion, including both protected and non-protected areas.

The report calls for detailed case studies of what adaptation costs will be, and points out that the few that already exist suggest that costs will be considerable.

It adds that the UNFCCC estimates do not include the cost of bearing residual damage that will arise from situations where adaptation is not technically feasible or simply too expensive.