The Climate Adaptation Trilemma

Ilan Noy and Tomáš Uher

EconPol Forum, 2025, vol. 26, issue 02, 13-18

Abstract: Key MessagesClimate adaptation requires weighing trade-offs associated with every adaptation policy choice.Trade-offs can be described as a Trilemma of choosing between two out of three goals: reducing inequities and hardship, incentivizing risk reduction, and fiscal sustainability.Three main approaches dominate adaptation and align with these goals: government investment, private adaptation, and risk finance and insurance.Economic assessments of adaptation policies should increasingly stri-ve to include ancillary and indirect effects and quantify the Trilemma trade-offs.Combinations of adaptation policies should be designed to minimize trade-offs and maximize synergies.

Date: 2025
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