The economics of climate adaptation optimism

Adaptation is often framed as marginally important to addressing climate change, and as socio-technically difficult and ineffectual. We combine theoretical and empirical analyses to show that adaptation—especially via economic development—is actually often the dominant driver of climate-sensitive societal outcomes, especially on smaller space and time scales. This aligns adaptation with markets and governance incentives. For these reasons, widely studied climate-sensitive outcomes such as crop yields, affluence, and damage and death rates from climate-related hazards have broadly and steadily improved over the past several decades, as have indirectly climate-sensitive outcomes such as mortality from violence and self-harm. These improvements provide important context to recent pessimistic studies of adaptation that focus on outcomes’ marginal sensitivities to climate. They also underscore the importance of economic development to human well-being, and they suggest that economically costly climate policies could harm climate-sensitive outcomes. Moreover, we show that the range of plausible greenhouse gas emissions scenarios has narrowed, providing greater clarity to the temperatures and types of impacts society must adapt to. Our analyses highlight where adaptation and development are currently underappreciated in climate change research and policy.