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Economics of Climate Adaptation

Using Climate Economy Modelling to integrate climate risks into long-term economic and adaptation planning

Economics of Climate Adaptation

Using Climate Economy Modelling to integrate climate risks into long-term economic and adaptation planning

Tools

So called E3 (“economy-energy-emission”) models are macro-econometric (dynamic) input-output models that depict the economy, energy and environment in an integrated manner and primarily use national data sources. 

The models can evaluate emissions reductions and climate adaptation scenarios in terms of their effects on economic and environmental indicators.

In Algeria, Jordan, Georgia, Kazakhstan, Mongolia and Uganda, the Deutsche Gesellschaft fuer Internationale Zusammenarbeit (GIZ) supported the development of macro-econometric e3 models.

Climate-sensitive E3-Models

Dynamic/Computable General Equilibrium Models are established tools for planning in many countries. GIZ has enabled to make them climate sensitive to assess sectoral and regional economic effects of climate change and evaluate macroeconomic effects of adaptation action. The DGE-CRED model is one example developed in Vietnam jointly with Institut für Wirtschaftsforschung Halle (IWH).

In Vietnam, Jordan and Nigeria, the Deutsche Gesellschaft fuer Internationale Zusammenarbeit (GIZ) GmbH supported the development and use of DGE/CGE-CRED models.

Climate-sensitive Dynamic/Computable General Equilibrium (DGE/CGE) Models

ECA: 
There is a growing consensus that climate change impacts should be considered in the development of adaptation strategies by decision makers at all levels. This requires identifying cost-efficient adaptation measures, resulting from a structured risk management approach. The approach taken under the “Economics of Climate Adaptation (ECA)” framework provides decision makers with information about potential climate-related damage to their environment, economies and societies. The results allow a flexible identification of cost-effective climate adaptation measures for a variety of projects and sectors.

Economics of Climate Adaptation

CLIMADA: 

With accurate and reliable data on climate-related risks becoming increasingly important, CLIMADA provides a robust analysis of the cost and benefits of adaptation measures and allows informed resilience investments into adaptation and disaster risk reduction. CLIMADA is an open-source quantitative modelling tool used by ECA to conduct risk assessments. It is a mathematical model written in two different scripting languages, MATLAB and Python.

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