The economics and costs of adaptation

K Levin
World Resources Institute, USA

As a result of the unprecedented rate of human-induced climate change, there is now widespread consensus that unless proactive adaptation efforts are embraced, significant and sustained climate impacts will be borne by human populations and ecosystems. While mitigation activities will direct efforts to curb greenhouse gas emissions, adaptation efforts will be needed to bolster the resilience of human-built and natural environments.

Yet the problem of climate change is riddled with surprises, lag time before impacts are felt, and uncertainty – characteristics that pose challenges to decision makers faced with integrating climate impacts into planning and policy processes. Unfortunately human society has always found anticipation challenging and our decision-making processes are often slow to react to, learn from, and foresee change. Those most vulnerable have little to no resources to wrestle with today’s climate impacts, let alone contend with future impacts, some of which are too uncertain to predict with a high degree of certainty at present. Also, decision makers tend to prioritize current risks, even if efforts are better spent towards mitigating future risks or goals cannot be achieved without planning for future risks.

How are legislators, planners, and regulators to respond to climate change’s surprises and prepare for short- and long-term impacts, especially if resources may be scant and regions and countries face other pressing needs? The World Resources 2010, a joint publication between the UN Development Programme, UN Environment Programme, the World Bank, and World Resources Institute, will explore the topic of “adaptation decision making in a changing climate.” It will take as its premise that existing decision-making paradigms cannot contend with the uncertainty, surprise, and long lead time of human-induced climate change. In doing so, it will make the case for adaptation decision making that puts a premium on both rapidly responding to and anticipating change, and thus incorporating climate risks and uncertainty. It will demonstrate how integration of climate impacts into decision making can be seen as an opportunity to enhance development and wellbeing in a changing climate.

Accordingly, the research objective of the 2010 World Resources Report is to determine which options are available to decision makers that will allow them to advance policies and plans that withstand and prepare for a changing climate. Specifically, we seek to shed light upon decision-making innovations that can:

1. react to change quickly to contend with surprises; and
2. anticipate change and deal proactively with uncertainties and the lag of climate impacts, advancing interventions in light of impacts that may only manifest themselves far into the future but which are of necessity demand early intervention.

The Report will focus on adaptation in developing countries, and will provide guidance for how decision-making processes can be made resilient themselves in order to provide the enabling environments necessary for communities and ecosystems to thrive in a changing climate.

The Report will draw upon case study research, ask experts and practitioners relevant policy questions and collect commentaries, host internet-based and in-person roundtables, and perform related independent research and analysis. The empirical findings from the research and case studies will pave the way for policy prescriptions. While the Report will focus upon national and sub-national decision-making processes, recommendations will be designed for decision-making innovations that provide the enabling environments necessary for communities and ecosystems to thrive in a changing climate. The Report will conclude by proposing a roadmap for adaptation decision making in a changing climate.

In this presentation, we will discuss our findings thus far.
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A Breckenridge1 and C Olszak
Frontier Economics, Australia

The economics of adaptation policies relies on cost-benefit analysis techniques, that are used to identify the relative merits of alternative options The approach is essentially drawn from the project appraisal literature, and applied to specific adaptation problems (for example, the net benefits of levee construction versus retrofitting buildings in response to sea level or flooding risk). The approach assumes a centralized decision maker – which could be the state or someone else– deciding between plausible alternatives.

In reality, adaptation efforts will reflect, as they have in the past, the efforts of myriad agents, private and public. The key questions thus are: to what extent should these efforts be coordinated to produce a socially optimal adaptation outcome, how might such coordination be achieved, and what is the role of different tiers of government policy in achieving this. These questions go well beyond the standard cost benefit analysis paradigm. The latter supposes a choice between alternatives made by a decision maker. In reality, what we need to do is ask who the relevant decision maker is in the first place, how do we know what the relevant alternatives are, and what can we say about the wider impact of these alternatives?

A starting point is to consider that private agents have incentives to adapt. “Autonomous adaptation” is a possibility where there is pre-existing adaptive capacity, where there is scope for market driven substitution, and where adaptation tends to be a smooth process. Where these conditions do not hold, there may be scope for government intervention.

Moreover, there will be scope for government intervention when the privately beneficial adaptive actions of agents are not socially beneficial. These may be due to standard market failures such as externalities in adaptation. But there may also be inefficiencies in existing product or factor markets. The mis-pricing of water is one such example. If uncorrected, the misallocation of resources resulting from these distortions is likely to lead to actions that exacerbate the impact of climate change, and lead to deficient adaptation policies.

The concept of market failure and the coordination problems that arise as a consequence provide a motivation for government action, and also suggest the types of adaptive action that are appropriate. These are likely to extend well beyond the project type interventions that are considered in the standard adaptation literature, to include such actions as defining property rights, reforming pricing mechanisms, or developing markets for risk.

Quantifying the costs and benefits of these instruments is not straightforward. For a start, there are inherent problems associated with uncertainty, which in the context of adaptation may be particularly acute given the wide range of predicted outcomes for a range of climatic variables. This uncertainty will tend to favour policy approaches that have built in “optionality”. For example planning restrictions may be a less capital intensive way of preventing flood damage than acquiring land for the purposes of levee construction. However, the former carries a high cost potential if the risk of flood damages turns out to be overstated; whereas the latter represents an option that can be exercised as the state of the world becomes clearer.

A second issue is that many interventions will have behavioural consequences that need to be taken into account. Continuing with the example just discussed, it may be that the decision to purchase land to provide the option for constructing levees leads agents to believe that they will be largely insulated from flood risks. All else being equal, this will lead to a more intensive use of the flood prone land than would have otherwise been the case, in turn increasing the projected level of damages associated with a catastrophic flooding event in which the levees fail. This problem may be further exacerbated if, as is usually the case, governments cannot pre-commit against providing ex-post disaster compensation.

These examples are illustrative of the complexity inter-relationships between approaches to adaptation – a level of complexity that increases if one considers economy wide effects rather than sector specific results. Moreover, resolving the trade-offs that inevitably arise across alternative approaches will raise issues of an intrinsically ethical nature (on account, for instance of differences in distributional outcomes).
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L Dobes1 and B Chapman
Crawford School of Economics and Government, Australian National University, Australia

Climate projections suggest increased inundation of beachfront property on the east coast of Australia over the coming century. Intermittently Closed and Open Lagoons such as those at Pittwater and Manly in Sydney are examples of areas at risk.

The emphasis in Australian policy discourse has to date been on the ‘protect’ and ‘accommodate’ phases of adaptation to coastal inundation. Protective measures such as sea walls, and accommodation to the effects of flooding (such as raising houses) offer initial lines of defence, but managed retreat will ultimately be required for some property owners. However, current risk-management and disaster management frameworks offer little policy guidance on who should pay for retreat, or when or how. In particular, conventional risk management frameworks are predicated on at least some knowledge of the nature and degree of risk, but climate change is characterised by significant uncertainty that precludes realistic assessment of Knightian risk.

Ordinary insurance, catastrophe insurance, group (index) risk insurance, catastrophe bonds and reverse mortgages offer potential solutions, but are ultimately impractical or flawed in various ways. Direct government subsidies, for example, through purchase of chronically inundated properties by local councils, is a possibility, but raises issues of equity and potential fiscal churn if everyone subsidises everyone else for all effects of climate change. Correlated risk is a problem in terms of insurance. Reverse mortgages require preservation of equity and are therefore unsuitable as a means of generating funds to relocate.

The Australian Government assists students who cannot obtain commercial loans by making loans available through the Higher Education Contribution Scheme (HECS), a form of income-contingent lending that is repaid on the basis of income level, rather than a fixed temporal schedule. While conventional commercial loans must be paid back on schedule, irrespective of the borrower’s ability to pay, income- contingent loans need to be repaid only once the borrower is earning sufficient income to do so.

Many coastal residents subject to inundation may not have sufficient income (for example, retirees) to allow them to borrow commercially to abandon their coastal residence and purchase alternative accommodation. Income contingent loans are therefore inappropriate. We therefore examine an innovative approach in the form of mortgage (asset) contingent loans which would minimise government involvement, and therefore the risk to taxpayers, in assisting residents in low-lying coastal areas to seek alternative habitation in the face of climate-induced inundation.

If it is to offer a practical solution, a mortgage contingent loans scheme would need to identify address the challenges of adverse selection and moral hazard. In the case of retreat from threatened coastal areas, there is a further issue that needs to be addressed, that of financial responsibility for demolition of abandoned houses and any other environmental hazards. Some hypothetical empirical examples have been developed for illustrative purposes.

Little attention is currently being given by governments to formulating principles that might underpin future adaptation, particularly in regard to who should pay for what, and when. This paper seeks to initiate rational discussion before short-term political pressures result in the development of ad hoc, inconsistent policies.
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D Bresch, J Haas, W Kennes, M Barbut, B August, J M Oppenheim, M Blair, P Gutman and G Colville
Swiss Reinsurance Company Ltd
ClimateWorks Foundation
European Commission
Global Environment Facility
McKinsey & Company
Rockefeller Foundation
Standard Chartered Bank
United Nations Environment Programme

Climate adaptation is an urgent priority for custodians of national and local economies, such as finance ministers and mayors. Such decision makers may ask: What is the potential climate-related loss to our economies and societies over the coming decades? How much of that loss can we avert, with what measures? What investment will be required to fund those measures – and will the benefits of that investment outweigh the costs?

The aim of the report is to provide decision makers with a systematic way of answering these questions. Focusing specifically on the economic aspects of adaptation, it outlines a fact-based risk management approach that national and local leaders can use to understand the impact of climate on their economies – and identify actions to minimize that impact at the lowest cost to society.

The report is based on the initial findings of a study by the Economics of Climate Adaptation Working Group, a partnerships between the Global Environment Facility , McKinsey & Company, Swiss Re, the Rockefeller Foundation, Climate Works Foundation, the European Commission and Standard Chartered Bank.

Some of the key outcomes of the report are summarised below:

1. designing a Systematic Approach to Climate Adaptation: Over the past 50 years severe weather disasters have caused some 800,000 deaths and over a trillion dollars in economic loss. Climate change could cause significant incremental loss, even within the next 20 years. The Working Group has developed a quantitative decision making framework built around two sets of tools:
   (i) First, the framework provides tools to quantify a locations “total climate risk” i.e. the expected annual loss to the location’s economy from existing climate patterns, a projection of the extent to which future economic growth will put greater value at risk and finally an assessment of the incremental loss that could occur over a twenty year period under a range of climate change scenarios based on the latest scientific knowledge;
   (ii) Second, the framework uses cost-benefit discipline to evaluate a selection of feasible and applicable measures to adapt to the expected risk. The Working Group developed detailed methodology to underpin this framework, and applied it in eight on-the-ground test cases in China, Guyana, India, Mali, Samoa, Tanzania, the UK and US.
2. Taking Climate Resilient development Forward: The framework presented in this report can help societies better understand the climate risk to their economies – and provide vital input into impactful, cost-effective adaptation strategies that boost overall economic development.
3. Conclusion: In summary, the report found that:

• Sufficient data exists to make economic related adaptation decisions;
• There is significant economic value at risk:
• under today’s climate 1-12% of GDP is at risk by 2030,
• under a high climate change scenario 1-19% of GDP is at risk by 2030;
• A large proportion of the risks identified can be averted:
• for 40-65% of the losses identified the economic benefits of adaptation outweigh their costs;
• Adaptation is no substitute for mitigation;
• Insurance measures help address low frequency, high severity events

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P Thalmann, M Vielle and C Gonseth
School of Architecture, Civil and Environmental Engineering, EPFL Ecole Polytechnique Fédérale de Lausanne, Switzerland Faculty of Business and Economics, University of Lausanne, Switzerland

The objective of this research project is to model the impacts of climate changes and the possibilities and costs of adaptation using GEMINI-E3, a computable general equilibrium (CGE) of the world economy (http://gemini-e3.epfl.ch/). Most large-scale CGE models are purely economic models, without climatic modules or any explicit description of climate impacts and adaptation possibilities. By adding these features to GEMINI-E3, we show how it can be done in other CGE models. As a practical application, we will estimate the economic incidences of climate changes in Switzerland, as well as the effects of adaptation to these changes, the costs and the benefits which result from this. We will stress impacts and adaptation in the following sectors: agriculture, tourism, energy, and infrastructures. Ultimately, the goal of this research is to help prioritize adaptation measures.

The first step of this research was to identify the scientific literature on climate change impacts in Switzerland. Ideally, that literature would indicate what changes in climate variables (temperatures, precipitations, extreme events) are expected and what the effects of these changes on diverse sectors of the Swiss economy could be. From that literature, we derive statistical coefficients that relate climate variables to economic variables such as production costs and outputs. These coefficients and the relationships they summarize are added to the equations that describe economic activity and interactions between sectors in the CGE model. We were forced to redefine some sectors and create new ones in the model, in order to isolate those that are likely most affected by climate changes, such as water supply and tourism.

When the model is augmented with the climate variables, calibrated and tested, it allows simulating the sectoral and aggregate costs of climate changes. Different scenarios for the evolution of GHG concentrations and the resulting climate effects can be simulated. In a CGE model, economic actors optimize under current conditions. Thus, for instance, if reduced precipitations lower agricultural output, farmers can adjust by using more inputs (fertilizers, irrigation, labour) and by switching crops. Rising pricesfor agricultural products encourage them to do so. There is thus endogenous adaption in such a CGE-type economic model.

The augmented model will allow assessing domestic climate policies, in terms of costs of mitigation and reduced climate impacts (if any).

The final step is to add exogenous adaptation. This will take the form of government support for infrastructure and technological improvement, subsidies, etc. Costs and economic benefits of such measures can then be compared and optimized.
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J Dyer and J Harding
Parsons Brinckerhoff, Australia

Australia’s energy network infrastructure is a critical element of the national economy, delivering electricity and gas to over 13 million customers across the country. Energy network infrastructure is characterised by assets that are often highly exposed to climatic events, are geographically dispersed, are required to operate at very high levels of reliability and can potentially pose significant economic consequences in the event of failures or outages. For these reasons it is important to evaluate the impacts of climate change on energy networks and the adaptation measures that the asset-owning businesses may need to undertake.

Parsons Brinckerhoff undertook a detailed study on behalf of the Energy Networks Association to investigate the risks, challenges and opportunities that climate change poses for energy networks. The study assessed the predicted changes in climate that will affect network infrastructure around Australia and quantified the commercial effect on network businesses in adapting to the physical climate impacts; mitigating their own greenhouse gas emissions; and managing the changes that are likely to occur in the national energy industry as a result of government policies and other instruments to mitigate Australia’s emissions.

A key element of the study was an assessment of the total cost of climate change adaptation that energy network businesses are likely to need to undertake. The methodology behind this assessment comprised a number of stages: development of credible composite scenarios to account for variability on external factors, developing a commercial impact model to relate external factors to business consequences, undertaking a risk assessment for each composite scenario, undertaking a detailed costing exercise for the adaptation actions that a business may undertake in light of the risks and commercial impacts identified.

It was found that there are significant risks to energy network businesses from climate change in all regions of Australia. The highest of these risks would come from bushfire, tropical cyclones and a change in the mix of generating technologies that will connect to the electricity network. Lesser risks were identified due to the increasing impact of floods and droughts as well as an increase in peak electrical demand.

The costs of specific adaptation activities were found to be relatively independent of the related risk magnitudes. For example, bushfires were assessed to be a high risk, but the response in terms of retro-fitting components and other measures was relatively low cost. Conversely, a large proportion of total cost was found to be due to the expected increase in electrical demand from a higher penetration of air conditioning in response to the forecast increasing frequency and severity of heatwaves. However, given that responding to demand is within the core business of an electricity network, the risk that this poses to the business is relatively low.

In total, the adaptation cost to energy networks from climate change was estimated to be $2.5bn over the next 5 years. It was found that the costs would be incurred mainly on electricity transmission and distribution networks, with gas distribution networks affected to a lesser extent and gas transmission networks to a negligible extent. The expected costs of climate change were found to be greater in tropical regions and those regions that have not historically experienced cyclones, but are forecast to be susceptible to cyclones in future.

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M Muto
Japan International Cooperation Agency, Japan

Climate models supporting the IPCC Fourth Assessment Report predict that climate change will increase local temperatures and precipitation in monsoon regions in Asia, where the number of large cities is increasing and existing urban areas are expanding, particularly along the coasts. In this study, Metro Manila, typical of Asian coastal megacities, is used as a case study to comprehensively simulate impacts of future climate change and identify necessary adaptation measures.

In spite of the various uncertainties inherent in predictions, this study translates future global climate scenarios to regional climate scenarios, a process called “downscaling”. The B1 and A1FI scenarios of the IPCC SRES framework provide a basis for discussing local temperature and precipitation changes in Metro Manila. Based on these scenarios, hydrological conditions such as river overflow and storm surge were projected. Flood simulation maps were then constructed showing the range of potential spatial spreads, inundation depths and flooding durations anticipated in the metropolis.

Based on the flood simulation maps, socio-economic impact analyses were applied to understand the characteristics and magnitude of flood damage anticipated in year 2050. The benefit side of the analysis calculated avoided damage at the aggregate level. Tangible direct losses were assessed as in conventional flood control project analyses. Incremental costs to transportation (VOC and time costs), and lost wages and income (sales) due to flooding were combined for tangible indirect costs.

If flood control infrastructure improvements were stopped now, and the A1FI climate scenario is assumed, a 100- year return period flood could cause aggregate damages of up to 24% of the GRDP, while damages from a 30-year return period flood would be about 15% of the GRDP. If, however, infrastructure improvement based on the 1990 Master Plan is continued and climate scenario B1 is assumed, the projected damages would be only 9% of the GRDP for a 100-year return period flood, and 3% for a 30-year return period flood.

Finally, options for adapting to the scenarios were selected, with the objective of eliminating as much as possible of the flooding projected in the flood simulations. Economic evaluations using economic internal rate of return (EIRR) and net present value (NPV) were conducted by combining the costs of the adaptation options with the damages avoided by implementing those options. The EIRR and NPV evaluations yielded different results, but they both suggest that filling the infrastructure gap identified under the current Master Plan (for status quo climate) is the first and foremost priority.
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A Hunt
University of Bath, UK

This paper poses the research question: how can information relating to the costs and benefits of adaptation be used in making decisions about adaptation in the face of existing uncertainties in climate change impact estimation? We utilise Portfolio Theory, (PT), to explore the extent to which it can frame cost-benefit analysis within a more explicit treatment of uncertainty. In doing so, PT allows the adaptation decision-maker the means with which to trade off economic efficiency, measured here by Net Present Value (NPV), directly against uncertainty, measured as variance of NPV.

This paper demonstrates these methodological issues in the specific context of the riverine flood risk posed by climate change to Shrewsbury, Shropshire – a town in the UK that has historically been subject to frequent flooding. The benefits of implementing three alternative adaptation options – engineering-based defences, property resistance measures and flood warning mechanisms – are estimated. The benefit estimation includes damages avoided to property and economic output, as well as the injury and mental health impact costs avoided, measured by use of benefit transfer of non-market values. Flood adaptation benefits are estimated over a period of 50 years and compared with their costs in formal cost- benefit analyses. Uncertainty resulting from climate change and socio-economic change is introduced by the application of multipliers that serve to represent the potential effects of alternative climate and socio-economic scenarios on the benefits and costs of the adaptation measures. The outputs of the cost-benefit analyses are then incorporated into portfolio analysis of these options that estimate the Expected NPV and variance of 60 individual portfolios constructed using combinations of 2- or 3-options, implemented to varying degrees, depending on the budget constraint assumed.

The cost-benefit analyses of the three alternative adaptation measures, implemented to varying degrees, show that whilst the hard defence option has the highest expected NPV, its variance is also significantly greater than the other two options considered. Conversely, whilst the warning system option generates the lowest NPVs, the variances associated with it are also the lowest. When the measures are combined into 2- or 3-option portfolios, a positive, relationship between return and variance, is identified reflecting the fact that whilst the expected net present value will be higher with the inclusion of some options there is a trade-off to be made with the attendant higher uncertainty of return. The effect of adding a third option to the analysis is that the range of variance over which the portfolios are spread is significantly reduced.

The results of the portfolio analysis show that it is possible to construct a locus of portfolios that represent trade-offs between efficiency and uncertainty. Sub-optimal portfolios that have both lower NPV and higher variance than an alternative can be identified and removed from the portfolio possibilities presented to the decision-maker. The composition of the portfolio selected for implementation will then be determined by the preferences of the decision-maker relating to economic efficiency and uncertainty.

The illustrative application of portfolio analysis in this chapter serves to demonstrate that it may be used in conjunction with currently utilised decision-support tools such as CBA in order to incorporate climate change impact uncertainty more explicitly in project and policy decision-making. However, whilst the example presented here demonstrated the potential efficiency-uncertainty trade-off to be made, future testing should include the following research priorities: a) to increase the realism, expand the application of the portfolio approach, both in terms of the number of options included in individual portfolios and the consideration of wider range of options; b) test method effectiveness in other sectoral or cross- sectoral contexts where, for example, the climate impact data is less readily modelled and available; c) compare method findings with other emerging approaches to the same problem such as robust decision making (RDM) that evaluates adaptation from the stand-point of whether a given adaptation option is sufficiently flexible to be effective under alternative climate scenarios (Lempert et. al. 2006). Whilst these approaches appear likely to be complementary, it is unclear how this complementarity will be operational in the absence of a systematic comparison in a given decision context.
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F Gemenne
Institute for Sustainable Development and International Relations

Most observers agree that equity is an essential condition for a new international agreement on climate change. However, equity is an equivocal concept, and different interpretations of equity clash with each other. Though equity concerns have been placed at the core of negotiations on mitigation efforts, they have been little addressed in the discussions on adaptation. As a result of this, the criteria that will be used to allocate the adaptation funding remain unclear and vague, which is detrimental for the negotiation process as a whole. This paper aims to offer a new perspective on this issue, departing from the traditional perspective inspired by retributive justice.

The fundamental injustice of climate change is well known: the countries that will be first and most affected by its impacts are those that bear the least responsibility for the atmospheric concentration of greenhouse gases. In order to fix this injustice, transfers from the North to the South will be needed to cope with and adapt to the impacts of global warming. On which criteria should such transfers be operated? Borrowing an expression from Baer (2006), who owns what to whom? Two different possible answers can be provided to this question. The first answer derives from retributive justice, which is the perspective on justice most commonly referred to in Western countries. Retributive justice is based on the idea that damages should be repaired by those who have caused them. The philosophy behind UNFCCC and the Kyoto Protocol is largely inspired by retributive justice, epitomised in the concept of ‘common but differentiated responsibilities’. So is the concept of ‘climate debt’, put forward by campaigners for climate justice. A strict application of retributive justice to adaptation would imply that the countries with the greatest responsibility in global warming would transfer funds to compensate for the damages they have caused in countries that bear the least responsibility for these damages, and are the first and most affected.Yet this paper aims to show the practical problems that would arise from an application of retributive justice to adaptation, and makes the case for a perspective inspired by distributive justice. Unlike retributive justice, distributive justice is not concerned with the identification of responsibilities, but rather with the equalisation of resources and benefits, according to the needs and capacities of each party. Equity lies at the core of distributive justice, which mostly seeks to resolve distributional issues. With regard to adaptation, a distributive view of justice would no longer be based on the levels of responsibility, but rather on the levels of vulnerability and adaptive capacity. This would bear important consequences for the allocation of adaptation funding, which are described in the paper. The paper also seeks to identify the political and practical obstacles in the implementation of distributive justice, and suggests some options to overcome these obstacles.

K Takahashi and N Adger
National Institute for Environmental Studies, Japan
University of East Anglia

One part of the Copenhagen Accord, which was approved to be “taken note of” by delegates at COP15, pledges US$ 30 billion to the developing world over the three years from 2010 to 2012, rising to US$ 100 billion per year by 2020, to help poor countries adapt to climate change. By and large, the pledge has been welcomed as a landmark advancement which is expected to push and accelerate realization of adaptation in developing countries. However, here, several questions arise. Will the pledged funding suffice for fully achieving adaptation needed in those countries? To begin with, who should pay to whom and how much for the full achievement? Furthermore, how will the fair share of the burden change in future when socio-economic conditions in developing countries as well as in developed countries change significantly?

Estimation of the costs of adaptation at global scale is clearly a policy-relevant issue and has been a hot research area in recent years. Several large research projects have been conducted by international organizations such as World Bank and UNFCCC for urgent improvement of knowledge on the area. While the costs estimated by those projects are quite uncertain, we still think it is worth discussing in parallel how the costs should be shared by regions for looking for the way to answer to the arose questions.

With the backgrounds stated above, the objectives of the research presented in this poster are:

1. To examine fair inter-regional allocation of adaptation costs based on existing estimates of regional adaptation costs and alternative metrics of fairness (ability to pay, responsibility and others).
2. To examine how the fair allocation will change over the incoming decades to 2050 due to the changes in ability and responsibility of each region to bear adaptation costs as well as the change in regional adaptation costs.

The results of the analysis demonstrate where the burden for adaptation occurs as well as which regions should shoulder responsibility and how sensitive these outcomes are to different rules on fairness which are being played out in international negotiations.