The Role of the Government in Adaptation to Climate Change

Given the scarcity of resources an economic approach is necessary in order to determine an optimal strategy of adaptation to climate change. In this paper we develop an economic framework for the study of adaptation which allows distinguishing between decentralised adaptation by private agents on the one hand and centralised adaptation measures by the government on the other. The paper falls into two parts: In the first we present the neoclassical view of adaptation policy, which is based on the paradigm of market failure. The second part deals with challenges and complements of the neoclassical view arising from the introduction of equity principles, security of supply concerns and a polycentric approach to the provision of public goods proposed by Ostrom, 2009. The analysis is illustrated with examples of adaptation measures in Germany.

Osberghaus, Daniel, Astrid Dannenberg, Tim Mennel and Bodo Sturm (2010), The Role of the Government in Adaptation to Climate Change, Environment and Planning C: Government and Policy 28(5) , 834-850