Extreme Weather Events and Climate Change: Economic Impacts and Adaptation Policies

• Published in: Annual review of resource economics 2024-10, Vol.16 (1), p.207-231
• Main Author: Ferreira, Susana
• Format: Article
• Language: English
• Subjects: Adaptation; climate adaptation; Climate change; climate change policy; climate extremes; Disasters; Economic development; Emergency preparedness; JEL I30; JEL O13; JEL O44; JEL Q54; JEL Q56; natural disasters; risk management
• ISSN: 1941-1340; 1941-1359
• DOI: 10.1146/annurev-resource-101623-095314

This article reviews the literature on the economic impacts of disasters caused by extreme weather and climate events to draw lessons on how societies can better manage these risks. While evidence that richer, better-governed societies suffer less and recover faster from climate extremes suggests adaptation, knowledge gaps remain, and little is known about the efficiency of specific adaptation actions. I review various “no or low” regrets adaptation options that are recommended when uncertainties over climate change impacts are high. I discuss how governments can play an important role in adaptation by directly providing public goods to manage disaster risks or by facilitating private agents’ adaptation responses but also highlight the political economy of policy and coordination failures.