Adaptation easily covers its cost

Humanity has long learned to live with extreme weather.

- MEKALA KRISHNAN ANNABEL FARR KANMANI CHOCKALINGAM

Much of the Netherlands would be under water were it not for centuries of ingenious adaptation to the constant threat of flooding. Likewise, ancient communities on the banks of the Tigris and Euphrates developed ways to capture and direct excess water to nourish and protect fields.But the number of places exposed to extreme weather will only grow. According to new research from the McKinsey Global Institute, Advancing adaptation: Mapping costs from cooling to coastal defences, the world spends US$190 billion (5.9 trillion baht) per year on investments in 20 key adaptation measures that protect roughly 1.2 billion people. But three billion more people, over three-quarters of whom live in low-income regions, have only limited protection.

Extending developed-economy standards of protection to all exposed places would require $540 billion annually. That means there is a $350 billion gap, 60% of which is needed to help low-income areas build greater resilience. Moreover, adaptation costs will rise. On current emissions trajectories, the world is likely to reach 2° Celsius above pre-industrial levels by about 2050, exposing an additional 2.2 billion people to heat stress and another 1.1 billion to drought, for example.

Our analysis finds that at 2°C warming, the world would need to spend $1.2 trillion annually to protect everyone exposed to climate hazards at developed-economy standards, or almost 1% of GDP in affected places, by 2050. More than three-quarters of that spending would go towards protecting against heat and drought.