How much does it cost to

adapt to climate change?

Humankind is building up atmospheric stocks of greenhouse gases
which, on relevant timescales, are effectively irreversible. There is
uncertainty about how damaging such stocks will be, but as
climate change research advances we will get better information
about these risks in the future. For economists and others, this
raises the crucial timing question of how this affects that rate at
which we build up the stocks. With conventional rules of cost-
benefit economics, one should delay investment, slowing the
accumulation of greenhouse gases and increasing mitigation.

Professor Alistair Ulph from Southampton University’s Department

of Economics is leading a project that explores the theoretical
issues involved with estimating the costs of adapting to climate
change. The project starts with a critical review of the literature
that addresses a number of the criticisms of using cost-benefit
analysis to study responses to climate change. It will focus
particularly on the inclusion of cost-benefit analysis to assess the
correct timing of investments in adaptation strategies, based on
current expectations and change as better information becomes Professor Alistair Ulph from Southampton University’s Department of
Economics is leading a Tyndall Centre project that explores the
available. In particular, the project will focus on key questions for
theoretical issues involved with estimating the economic costs of
the economics of climate change: irreversibility; uncertainty; and
adapting to climate change
learning.

The second stage of the project extends the analysis to case

studies in the UK water industry, where increased storms and
droughts are expected to vary water supply and water demand.
The case study links this research to work by Professor Nigel Arnell
who is co-manager of the Tyndall Centre’s ‘adapting to climate
change’ research theme. His work is aiming to produce practical
guidelines for the water sector in assessing options and risk for
their adaptation strategies to climate change. A workshop for
researchers and policymakers will discuss the outcomes of this
project.

More information Useful Websites

Contact the lead investigator of Project T3.34 (Theory and practice of Technical change for long term economic models. Tyndall Working Paper 15
economic analysis of adaptation): www.tyndall.ac.uk/publications/working_papers/wp15_summary.shtml
Professor Alistair Ulph
Department of Economics How high are the costs of Kyoto for the US economy? Tyndall Working
University of Southampton Paper 4
Southampton SO17 1BJ www.tyndall.ac.uk/publications/working_papers/wp4_summary.shtml
Tel: 02380 592544 Economics and the Kyoto Protocol
amu@soton.ac.uk www.davidsuzuki.org/Climate_Change/Economics

Other researchers involved in this project are: Centre for the Study of Economic and Social Research on the Global
Alan Ingham and Professor Nigel Arnell, Tyndall Centre South and Environment
University of Southampton www.uea.ac.uk/cserge
Professor Kerry Turner and Dr Neil Adger, CSERGE, University of East
Tyndall Centre for Climate Change Research
Anglia
www.tyndall.ac.uk
Dr Jonathan Köhler, Tyndall Centre HQ and Department of Applied
Economics, University of Cambridge
Project duration:
July 2003 – December 2004

Round 3