Adaptation to climate change is the second pillar and it is about minimizing the climate costs derived from extreme weather events such as droughts, floods, storms and tropical cyclones. Countries in the global south are expected to be severely affected, and the 2023 UN Climate Adaptation Report expects adaptation costs for developing countries to be around $400 billion per year until 2030.
Even if these mitigation and adaptation policies are funded and can be realized, the world will experience loss and damage derived from climate change, which for developing countries are of the same magnitude as the costs of adaptation. Therefore, addressing loss and damage caused by climate change is the third pillar of the fight against climate change.
Policymakers, corporate leaders and investors are likely to leave COP28 tasked with increasing investment in low-carbon technologies. Think about more renewables in the power sector, carbon capture and storage in industrial clusters, energy efficiency measures in housing, manufacturing and transportation, and the growth of the hydrogen economy. They will also leave COP28 with the task of accelerating climate-friendly behaviour. This could include increasing recycling rates, car-sharing, getting more people to use trains and bikes as their primary means of transport, and even encouraging them to eat less meat. Both technology and behavioral changes are crucial to avoiding loss and damage from climate change and will require around $5.5 billion in investments per year globally through 2030, according to Bloomberg New Energy Finance.
The annual damages and losses of $400 billion caused by climate change through 2030 in developing countries represent about 1% of the size of their economies. This figure will rise to 2-3% by 2100 if global warming is limited to 1.5 degrees Celsius, which seems a manageable cost. However, this figure increases to 10-15% if global warming reaches between 2.5 and 3.0 degrees Celsius by 2100 (the current trajectory of global warming). Not only is this a huge economic loss, but it also requires profound changes in the economy, as similar amounts of spending on healthcare or education must go toward restoring the losses and damage caused by climate change. Not as a one-off, but year after year, and this is a conservative estimate, as it does not include the costs of climate tipping points that could accelerate global warming. It also only focuses on CO2 emissions, not a loss of biodiversity or other forms of pollution.
Therefore, we can safely say that the cost of inaction is extremely significant and that mitigation policies bring great benefits to society. Climate scientists point out that every dollar invested in mitigation and adaptation policies yields between $1.5 and $4 in terms of less damage and losses from climate change.