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Climate
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Climate Change Adaptation Costs and Finance
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Climate Change Adaptation Costs and Finance

A special issue of Climate (ISSN 2225-1154).

Deadline for manuscript submissions: 30 June 2026 | Viewed by 24645

Special Issue Editor

Dr. Riccardo Boero

E-Mail Website
Guest Editor
Environmental Impacts and Sustainability Department, NILU – Norwegian Institute for Air Research, 2007 Kjeller, Norway
Interests: climate change adaptation; weather and climate extremes; input-output; computable general equilibrium; circular economy; environmental services appropriation; social determinants of economic welfare

Special Issue Information

Dear Colleagues,

Climate change and the associated increase in the frequency and magnitude of extreme events constitute the hardest and longest-standing challenge to human wellbeing faced by societies across the globe. Adapting to climate change means mitigating natural hazards through multiple material and intangible investments, which bear a significant cost and require dealing with unique uncertainties. Scientific knowledge about the costs of adaptation and about the financing of actions to support adaptation is today extremely limited at any scale, significantly reducing our capability to support stakeholders making these crucial decisions. This Special Issue thus aims at supporting climate policies by outlining the scientific state of the art on adaptation costs and adaptation funding mechanisms.

In this Special Issue, original research articles and reviews are welcome. Research areas may include (but are not limited to) the following:

  • Assessments of adaptation costs in specific industries;
  • Case studies of adaptation actions, costs, and funding strategies in local communities;
  • Cost function analyses of adaptation actions;
  • Cost of nature-based investments in adaptation;
  • Ecosystem services appropriation for adaptation;
  • Urban vs. rural adaptation costs;
  • Evaluations of UN adaptation fund tools and results;
  • Cost/benefit analyses of climate finance tools;
  • Bottlenecks and credit crunching for adaptation;
  • Financial costs of adaptation;
  • Market failures and missing markets in climate finance;
  • Public vs. private funding mechanisms for adaptation;
  • Mechanism design in climate finance;
  • Systems science and complexity science approaches to adaptation;
  • Methodologies and reviews for all of the above.

I look forward to receiving your contributions.

Dr. Riccardo Boero
Guest Editor

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 250 words) can be sent to the Editorial Office for assessment.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Climate is an international peer-reviewed open access monthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1800 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

  • adaptation
  • cost assessment
  • cost function analysis
  • climate investment
  • climate finance
  • financial mechanism

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Published Papers (8 papers)

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Research

Jump to: Review

46 pages, 7539 KB  
Article
The Impact of Temperature Anomalies on Industrial Production
by Luccas Assis Attílio, Monica Escaleras and João Ricardo Faria
Climate 2026, 14(3), 75; https://doi.org/10.3390/cli14030075 - 20 Mar 2026
Viewed by 378
Abstract
Countries around the world are committed to achieving the Sustainable Development Goals (SDGs). However, significant challenges remain—particularly the economic consequences of climate change. Using a GVAR model for 17 economies over the period 2001M1–2021M12, we explore how temperature anomalies affect industrial production through [...] Read more.
Countries around the world are committed to achieving the Sustainable Development Goals (SDGs). However, significant challenges remain—particularly the economic consequences of climate change. Using a GVAR model for 17 economies over the period 2001M1–2021M12, we explore how temperature anomalies affect industrial production through four potential mechanisms: food prices, credit costs, exchange rates and investment. Our theoretical model demonstrates that temperature anomalies lower agricultural production, which drives up food prices and reduces real wages. This in turn leads to lower investment and production in the industrial sector. Our empirical results indicate that rising temperature anomalies are associated with a decrease in industrial production and investment, as well as the depreciation of domestic currencies relative to the U.S. dollar. Additionally, we observe that the influence of temperature anomalies is more pronounced in hot regions than in cold regions. Our investigation underscores the importance of financial markets and investment as potential transmission channels for the impact of climate change on industrial production. This study provides empirical evidence to support policymaking aimed at mitigating the adverse impacts of climate change, thereby helping countries to advance toward key SDGs such as no poverty, zero hunger, and climate action. Full article
(This article belongs to the Special Issue Climate Change Adaptation Costs and Finance)
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18 pages, 1253 KB  
Article
Assessment of Non-Linear Lag Effects of Drought on Sectoral Stock Returns Using a Histogram Gradient Boosting Autoregressive Approach
by Abhiram S. P. Pamula, Negin Zamani, Isael E. Gonzalez, Kalyani Reddy Mallepally, Sevda Akbari and Mohammad Hadi Bazrkar
Climate 2026, 14(2), 57; https://doi.org/10.3390/cli14020057 - 14 Feb 2026
Viewed by 693
Abstract
Drought is a slow-onset hazard whose economic impacts can propagate across sectors with multi-year delays. This study develops a non-linear autoregressive model with exogenous drought inputs (ARX) to assess whether U.S. drought severity, measured by the Drought Severity and Coverage Index (DSCI), contains [...] Read more.
Drought is a slow-onset hazard whose economic impacts can propagate across sectors with multi-year delays. This study develops a non-linear autoregressive model with exogenous drought inputs (ARX) to assess whether U.S. drought severity, measured by the Drought Severity and Coverage Index (DSCI), contains incremental predictive information for monthly stock returns. Using weekly DSCI and stock price data from 2013 to 2023, we constructed monthly compound returns and multi-year drought lags spanning 1–5 years for four sector-representative firms: a water utility (American Water Works, AWK), two food service firms (Chipotle Mexican Grill, CMG; Starbucks, SBUX), and an industrial manufacturer (Tesla, TSLA). We compared regularized linear ARX baselines (Elastic Net, Ridge) with a non-linear Histogram Gradient Boosting Regressor (HGB) ARX model and used permutation importance to diagnose drought-relevant lag horizons. Results showed a clear, delayed drought signal for the water utility, with a dominant ~48-month drought lag, consistent with multi-year transmission through operations, regulation, and investment cycles. In contrast, drought lags added limited or unstable information for the food service firms and negligible information for TSLA, whose dynamics were dominated by non-drought drivers. Overall, the findings indicate that drought–return relationships are sector-specific and can emerge at multi-year lags, and that non-linear ARX models provide a flexible tool for detecting these delayed climate-risk signals. Full article
(This article belongs to the Special Issue Climate Change Adaptation Costs and Finance)
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21 pages, 378 KB  
Article
Can Climate Transition Risks Enhance Enterprise Green Innovation? An Analysis Employing a Dual Regulatory Mechanism
by Liping Cao and Fengqi Zhou
Climate 2026, 14(1), 18; https://doi.org/10.3390/cli14010018 - 15 Jan 2026
Viewed by 479
Abstract
In the context of the global pursuit of the ‘carbon neutrality’ objective, Chinese enterprises are proactively advancing green development and low-carbon transformation. Among these efforts, climate transition risks have emerged as a crucial factor affecting strategic enterprise decisions and long-term competitiveness. This study [...] Read more.
In the context of the global pursuit of the ‘carbon neutrality’ objective, Chinese enterprises are proactively advancing green development and low-carbon transformation. Among these efforts, climate transition risks have emerged as a crucial factor affecting strategic enterprise decisions and long-term competitiveness. This study utilizes a sample comprising Chinese A-share listed enterprises over the period from 2012 to 2024 to construct an enterprise climate transition risk index using text analysis methods. It empirically investigates this index’s impact on enterprise green innovation by adopting panel data analysis method to construct a fixed effects model and further examines the moderating roles of institutional investors’ shareholding and enterprise environmental uncertainties in response to climate transition risks. The research findings indicate the following: First, climate transition risks significantly enhance enterprise green innovation. The validity of this conclusion persists following a series of robustness and endogeneity tests, including replacing the explained variable, lagging the explanatory variable, controlling for city-level fixed effects, and applying instrumental variable methods. Second, both institutional investors’ shareholding and enterprise environmental uncertainties exert a significant positive regulatory effect on the relationship between climate transition risk and green innovation, indicating that external monitoring and heightened risk perception jointly enhance enterprises’ responsiveness in driving green innovation. Thirdly, heterogeneity analysis indicates that the positive impact of climate transition risks on green innovation is notably amplified within non-state-owned enterprises and manufacturing enterprises. By examining the dual regulatory mechanisms of ‘external monitoring’ and ‘risk perception’, this study broadens the study framework on the relationship between climate risks and enterprise green innovation, offering new empirical evidence supporting the applicability of the ‘Porter Hypothesis’ within the context of climate-related challenges. Furthermore, it provides valuable implications for policymakers in refining climate information disclosure policies and assists enterprises in developing forward-looking green innovation strategies. Full article
(This article belongs to the Special Issue Climate Change Adaptation Costs and Finance)
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21 pages, 4639 KB  
Article
Diversity of Food Insecurity Coping Strategies among Livestock Farmers in Northern Cape Province of South Africa
by Yonas T. Bahta and Joseph P. Musara
Climate 2023, 11(4), 82; https://doi.org/10.3390/cli11040082 - 6 Apr 2023
Cited by 9 | Viewed by 3638
Abstract
Small-scale livestock farmers in the drylands of South Africa are highly exposed to agricultural drought-related food insecurity. Research has used descriptive analyses and missed the need to index the diversity of coping strategies used for managing agricultural drought-induced food insecurity. This study was [...] Read more.
Small-scale livestock farmers in the drylands of South Africa are highly exposed to agricultural drought-related food insecurity. Research has used descriptive analyses and missed the need to index the diversity of coping strategies used for managing agricultural drought-induced food insecurity. This study was conducted to bridge this gap using a two-step procedure. Initially, the study identified the farmers’ coping strategies and food security status. A coping strategy diversity index was computed using the Shannon–Weiner method and its relationship with the food security status was determined. Secondly, the determinants of the coping strategy diversity index were explored using an ordered logit regression model after testing for the proportional odds assumption. A mixed methods approach was utilized and a standardized questionnaire was administered to 217 smallholder livestock farmers in the Northern Cape province of South Africa. The household food insecurity mean score (8.429 ± 7.105) from the household food insecurity scale (HFIAS) was significantly related to a higher diversity of coping strategies. Similar results were reported for the household food insecurity access prevalence (HFIAP) status. The different forms of support (e.g., cash, food, training and assets) had a significant (p < 0.05) and positive effect on the coping strategy diversity index among the households. Education, access to credit and insurance facilities and the frequency of droughts significantly (p < 0.05) influenced the diversity of coping strategies under drought conditions. The utilization of cash reserves and investment stocks also significantly (p < 0.05) influenced the extent of coping strategy diversity. The study recommended strengthening the functional and technical capacity pillars of dealing with agricultural drought through strategic partnerships between the government and livestock value chain players. This collaboration should target affordable credit lines tailor-made for farmers to cope with agricultural drought. If well-coordinated, these interventions should reduce food insecurity prevalence, especially during drought conditions among vulnerable smallholder livestock farmers. Lessons from this study could also inform future research on the effectiveness of the current agricultural drought coping strategies while expanding the diversity clusters over space and time. Full article
(This article belongs to the Special Issue Climate Change Adaptation Costs and Finance)
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20 pages, 7779 KB  
Article
Unraveling the Multiple Drivers of Greening-Browning and Leaf Area Variability in a Socioeconomically Sensitive Drought-Prone Region
by K. Bageshree, Abhishek and Tsuyoshi Kinouchi
Climate 2022, 10(5), 70; https://doi.org/10.3390/cli10050070 - 18 May 2022
Cited by 4 | Viewed by 4005
Abstract
The complex attribution of climatic, hydrologic, and anthropogenic drivers to vegetation and agricultural production and their consequential societal impacts are not well understood, especially in socioeconomically sensitive states like Maharashtra, India. Here, we analyzed trends and variability in the MODIS leaf area index [...] Read more.
The complex attribution of climatic, hydrologic, and anthropogenic drivers to vegetation and agricultural production and their consequential societal impacts are not well understood, especially in socioeconomically sensitive states like Maharashtra, India. Here, we analyzed trends and variability in the MODIS leaf area index (LAI) time series, along with spatiotemporal patterns in precipitation, groundwater storage, agriculture statistics, and irrigation infrastructure, to identify their influences on the vegetation response and discuss their implications for farmers. The state showed greening in all biomes except forests, with a net gain of 17.478 × 103 km2 of leaf area during 2003–2019, where more than 70% of the trend in LAI is represented in croplands. Maximum greening was observed in irrigated croplands, attributable to increased crop productivity, whereas inadequate irrigation facilities with erratic rainfall patterns and droughts were primarily responsible for cropland browning. We discerned the dynamics and variability of vegetation response by incorporating a spectrum of synergistic feedbacks from multiple confounding drivers and found that uneven distribution of water availability across the administrative divisions governed the quantitative distinction in leaf area change. Despite the observed greening trends, the state witnessed a high number of farmer suicides related to droughts and agriculture failures hampering their socioeconomic security; therefore, improved irrigation infrastructure and comprehensive policy interventions are crucial for abatement of farmer distress. Full article
(This article belongs to the Special Issue Climate Change Adaptation Costs and Finance)
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Review

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24 pages, 3366 KB  
Review
Unveiling the Evolution of Adaptation Economics: A Systematic and Bibliometric Review of Collaborations, Methodologies, and Research Frontiers 2010–2023
by María del Pilar Salazar-Vargas, Yosune Miquelajauregui and Hilda Guerrero-Garcia-Rojas
Climate 2026, 14(3), 68; https://doi.org/10.3390/cli14030068 - 13 Mar 2026
Viewed by 658
Abstract
Adaptation economics is critical for guiding decision-makers in reducing climate vulnerability, evaluating the most suitable action while allocating scarce financial, human, and technological resources. However, this economic evaluation faces significant methodological challenges due to diverse contexts, intangible impacts, and uncertainties. This research aims [...] Read more.
Adaptation economics is critical for guiding decision-makers in reducing climate vulnerability, evaluating the most suitable action while allocating scarce financial, human, and technological resources. However, this economic evaluation faces significant methodological challenges due to diverse contexts, intangible impacts, and uncertainties. This research aims to characterize academic trends, gaps, and opportunities of collaboration in the economic evaluation of adaptation over the period 2010–2023. Fifty-eight articles were selected following the PRISMA framework and were analyzed using bibliometric analysis, supported by R-Bibliometrix. Additionally, a thematic review of abstracts was conducted to identify economic evaluation approaches. Articles were included if they applied an explicit economic method. This study uses Scopus-indexed literature and abstract-based classification, which may limit generalizability. Across this corpus, the results reveal that adaptation economics, although conceptually evolved, remains geographically concentrated and methodologically fragmented. At the geographical level, research production shows 14.78% annual growth, yet this remains concentrated in the Global North, with limited participation from Latin America, Africa, and South Asia. At the conceptual level, the studies demonstrate a significant thematic transformation, moving from topics linked to diagnosis and planning toward concepts of greater complexity, such as uncertainty. In contrast, and although six methodological approaches were identified, conventional efficiency-based methods (such as cost–benefit) dominate 44.8% of applications. This analysis provides a research agenda to advance more context-sensitive and methodologically diverse economic approaches for adaptation decision-making. Recommendations include fostering South–South and South–North collaboration and developing practical and simplified decision support tools, especially for vulnerable regions. Full article
(This article belongs to the Special Issue Climate Change Adaptation Costs and Finance)
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19 pages, 653 KB  
Review
An AI-Enhanced Systematic Review of Climate Adaptation Costs: Approaches and Advancements, 2010–2021
by Riccardo Boero
Climate 2024, 12(8), 116; https://doi.org/10.3390/cli12080116 - 7 Aug 2024
Cited by 4 | Viewed by 4442
Abstract
This study addresses the critical global challenge of climate adaptation by assessing the inadequacies in current methodologies for estimating adaptation costs. Broad assessments reveal a significant investment shortfall in adaptation strategies, highlighting the necessity for precise cost analysis to guide effective policy-making. By [...] Read more.
This study addresses the critical global challenge of climate adaptation by assessing the inadequacies in current methodologies for estimating adaptation costs. Broad assessments reveal a significant investment shortfall in adaptation strategies, highlighting the necessity for precise cost analysis to guide effective policy-making. By employing the PRISMA 2020 protocol and enhancing it with the prismAId tool, this review systematically analyzes the recent evolution of cost assessment methodologies using state-of-the-art generative AI. The AI-enhanced approach facilitates rapid and replicable research extensions. The analysis reveals a significant geographical and sectoral disparity in research on climate adaptation costs, with notable underrepresentation of crucial areas and sectors that are most vulnerable to climate impacts. The study also highlights a predominant reliance on secondary data and a lack of comprehensive uncertainty quantification in economic assessments, suggesting an urgent need for methodological enhancements. It concludes that extending analyses beyond merely verifying that benefits exceed costs is crucial for supporting effective climate adaptation. By assessing the profitability of adaptation investments, it becomes possible to prioritize these investments not only against similar interventions but also across the broader spectrum of public spending. Full article
(This article belongs to the Special Issue Climate Change Adaptation Costs and Finance)
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23 pages, 1140 KB  
Review
Key Innovations in Financing Nature-Based Solutions for Coastal Adaptation
by Fausto Favero and Jochen Hinkel
Climate 2024, 12(4), 53; https://doi.org/10.3390/cli12040053 - 9 Apr 2024
Cited by 15 | Viewed by 7094
Abstract
The implementation of nature-based solutions (NBSs) for coastal adaptation to climate change is limited by a well-documented lack of finance. Scholars agree that financial innovation represents a solution to this problem, particularly due to its potential for mobilising private investments. It remains unclear [...] Read more.
The implementation of nature-based solutions (NBSs) for coastal adaptation to climate change is limited by a well-documented lack of finance. Scholars agree that financial innovation represents a solution to this problem, particularly due to its potential for mobilising private investments. It remains unclear however how exactly innovative solutions address the specific barriers found in NBS implementation and, given the distinctive local characteristics of NBSs, to what extent successful innovations can be replicated in other locations. This study addresses this issue by reviewing the literature and case studies of innovative financial solutions currently implemented in NBS projects, highlighting which financial barriers these arrangements address and which contextual conditions affect their applicability. We find that there is no “low-hanging fruit” in upscaling finance in NBSs through financial innovation. Innovative solutions are nevertheless expected to become more accessible with the increase in NBS project sizes, the increased availability of data on NBS performance, and the establishment of supportive policy frameworks. The flow of finance into NBS projects can be further enhanced through the external support of both public (de-risking and regulation) and private actors (financial expertise). Full article
(This article belongs to the Special Issue Climate Change Adaptation Costs and Finance)
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