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Title page
Contents
Abstract 2
Non-technical summary 3
1. Introduction 5
2. Recent empirical evidence on climate change 7
3. Rising GHGs and warming exacerbate climate hazards with rising damages and losses 11
3.1. Climate hazards and the damages they cause are on the rise 12
3.2. Quantifying future impacts of rising climate hazards presents several challenges 13
3.3. Reckoning possibly extreme impacts of rising climate hazards presents challenges 14
3.4. Compound and concurrent hazards 16
4. The political economy of adaptation 16
4.1. Economic approaches to adaptation and resilience-enhancing strategies 17
4.2. The colors and shades of climate adaptation 17
4.3. Net benefits of investing in climate adaptation 18
4.4. Asymmetric perceived costs and benefits of climate policies 18
4.5/4.4. Top-down, bottom-up or hybrid adaptation? 19
4.6/4.5. The prerequisites of adaptation to climate hazards are high 20
4.7/4.6. Managing expectations and sustaining efforts matters 20
4.8/4.7. Barriers to adaptation financing in the private sector 21
5. Overview of the international and European Union legal frameworks on climate adaptation 22
5.1. International obligations on climate adaptation 22
5.2. The EU legal framework on climate adaptation 23
5.3. New avenues to spur adaptation: climate litigation 24
6. The European Union Governance framework and its interplay with climate adaptation 25
6.1. Europe (I): the Economic Governance Framework ('green budgeting') 25
6.2. European Union (II): the Union budget and Next Generation EU program 25
6.3. An EU Sustainable Finance Framework 27
6.4. Other legal obligations and developments regarding climate adaptation under EU law 28
7. How effective might adaptation strategies be? 29
7.1. What world are we adapting to? 29
7.2. Rising costs and benefits 30
7.3. The cost-benefit analysis 30
8. The financing of adaptation (I): the role of the public sector 31
8.1. What evidence do we have about financing of climate adaptation? 31
8.2. Are additional public-private approaches to climate adaptation financing being tested? 33
9. The financing of adaptation (II): a sustainable finance framework, insurance contributions, Cat-bonds, and other lines of defense 34
9.1. Insurance coverage needs to play an increasing role 35
9.2. Catastrophe bonds are insurance linked securities 36
9.3. Green Capital Market Unions need to come to the rescue! 36
10. Some final remarks and open issues 37
References 39
Annex 1. Principles of EU adaptation: the agricultural sector as a case study 44
Annex 2. How can nature preservation support adaptation? 45
Figure 1. Net Global GHGs Emission Pathways and Resulting Future Warming Levels 8
Figure 2. Historical and future European warming trends under different future SSPs 10
Figure 3. Climate change impacts in Europe (EEA (2020)) 11
Figure 4. Annual Economic Losses Caused by Climate-Related Extreme Events 13
Figure 5. Breaking the climate financing doom-loop 15
Figure 6. Summary of PESETA IV - climate change impacts and adaptation in Europe 31
Figure 7. EU-27 adaptation financing costs to 2030 extrapolated on basis of country studies 33
Figure 8. Blended Finance Ecosystems 34
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