Peer-Reviewed Journal Details
Mandatory Fields
Fankhauser, Samuel, McDermott, Thomas K.J.
Global Environmental Change
Understanding the adaptation deficit: Why are poor countries more vulnerable to climate events than rich countries?
Optional Fields
Poor countries are more heavily affected by extreme weather events and hence future climate change than rich countries. This discrepancy is sometimes known as an adaptation deficit. This paper analyses the link between income and adaptation to climate events theoretically and empirically. We postulate that the adaptation deficit is due to two factors: A demand effect, whereby the demand for the good “climate security” increases with income, and an efficiency effect, which works as a spill-over externality on the supply-side: Adaptation productivity in high-income countries is enhanced because of factors like better infrastructure and stronger institutions. Using panel data from the Munich Re natural catastrophe database we find evidence for both effects in two climate-related extreme events: tropical cyclones and floods. The demand effect is generally strong, but we find considerable variations in adaptation efficiency and identify the countries where inefficiencies are largest. Higher adaptation efficiency is associated in particular with government spending, an even income distribution and good governance. The conclusion for policy is that international efforts to close the adaptation deficit have to include both inclusive growth policies (which boost income) and dedicated adaptation support (which enhances spill-overs), the latter targeted at the countries with the highest adaptation inefficiencies.
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