UK ‘well placed to take advantage of opportunities of climate adaptation’
Analysis sets out five key steps that the UK government and wider public sector should take to capitalise on adaptation opportunities
Climate change adaptation provides “a significant economic opportunity” for the UK and the country must develop innovative solutions to meet the complex challenges of building resilience.
A report from the UK Government Office for Science found that climate change is already shaping decisions around the world, often in ways that are reactive rather than proactive.
However, as climate change continues to put increasing strain on existing systems, the Economic Opportunities of Climate Adaptation for the UK report highlights that while climate change does pose a serious threat, climate adaptation can also provide a more resilient and prosperous future and be a key driver of economic growth. The GO-Science report provides five key points outlining the opportunity and how the UK is already well positioned to take advantage of it.
But doing so will require concrete united action. “The imperative now is to act with intent” says Professor Dame Angela McLean, Government Chief Scientific Adviser. “By building capability and delivering at scale here in the UK, we can strengthen resilience at home while also creating a foundation for growth in international markets. This is particularly important for place-based and infrastructure-led solutions, where demonstrating what works in practice will build confidence in UK expertise internationally.”
Key points from the analysis
The report sets out five key messages to help inform how the UK could best positioning itself to take advantage of climate adaptation efforts around the world.
The first key message is that global demand for adaptation solutions is already substantial and will grow rapidly. Markets for adaptation solutions, however, remain fragmented and unconsolidated, creating a window of opportunity for early movers.
As the effects of climate change become more profound and adaptation becomes a key priority of governments around the world over the coming decades, investment in adaptation will increase significantly. Countries that plan for this and develop adaptation solutions today position themselves well to capture this growing market.
The second key message is the scale of the opportunity that adaptation will provide. The report found that over the next 10 years, a global adaptation market of £3.5 trillion ($4.7 trillion) will emerge and the UK could potentially capture £154-355bn ($207-476bn) of this. The report also notes that its estimates do not include wider climate services, like risk analytics and consultancy, due to a lack of relevant data, but these services could conceivably add billions in additional annual adaptation revenue by 2035.
The third key message is that the UK already provides a wide range of adaptation solutions. The country is a global leader in climate risk analytics, engineering services, finance, insurance, and advisory services and the report identifies over 600 adaptation-related goods and services currently offered by UK firms.
The fourth key message is that the UK’s strengths regarding adaptation solutions align closely with the UK government’s current Industrial Strategy. The strongest export opportunities for the UK include insurance and reinsurance; climate risk modelling and analytics; and advisory services such as engineering, legal and financial. The report finds that 92% of adaptation solutions with high-export potential fall within the eight Industrial Strategy sectors, showing the close alignment between adaptation solutions and existing government priorities.
Barriers and solutions
The final key message of the report is that the UK will not automatically capture this market opportunity, but the barriers are identifiable and actionable.
The report then identifies five key steps that the UK government and wider public sector would need to take to capitalise on the opportunity that adaptation provides.
These are:
- Generating demand: The government needs to set clear adaptation targets and build trust in what works to inspire the private sector to invest in adaptation solutions.
- Mobilising capital: Bring together local, regional, and national bodies to collaborate on adaptation projects so that they can achieve economies of scale while clearly defining roles and responsibilities to ensure effective collaboration.
- Data gathering and accessibility: Improve access to consistent, clear climate risk data, building on shared public data assets so that risks and outcomes can be compared, priced and acted on with confidence.
- Embedding climate risk in financial decisions: Incorporate the assessment of climate risks into considerations by financial institutions to achieve meaningful adaptation decisions.
- Developing export pathways: Develop export pathways through domestic adaptation delivery to position the UK to access international markets.
By taking these steps, the report said the UK would not only prepare itself to handle the challenges posed by climate change but open up international markets too. The UK can therefore serve as a “window shop” for climate adaptation that proves to international markets the effectiveness of British solutions, while generating the evidence, standards and operational experience that make solutions commercially and internationally viable.
“With the right ambition, the UK can reduce the risks we face and position itself as a leader in a growing global market – helping to build a more resilient, innovative and prosperous future,” Dame Angela concluded.
About Luke Barisonek
Luke is a student at Boston University pursuing a degree in international relations with a focus on environment and development. As part of the Boston University London Summer Internship Program, Luke is interning with Global Government Forum where he primarily works in the editorial department. Luke is active in Boston-based political organising and is a member of the Boston University Snowboard Team.
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