Determinants, outcomes, and feedbacks associated with microeconomic adaptation to climate change

Actors across all economic sectors of society will need to adapt to cope with the accelerating impacts of climate change. However, little information is currently available about how microeconomic actors are adapting to climate change and how best to support these adaptations. We reviewed the empirical literature to provide an overview of (1) the climate change adaptations that have been undertaken in practice by microeconomic actors (i.e. households and firms) and their determinants; and (2) the outcomes of these adaptations and the manner in which public policies have supported them. About a quarter of actors across the studies included in our review took no adaptation measures to climate change. Of those that did, the most commonly identified determinant of adaptation was assets, which were predominantly discussed as facilitating diversification within livelihoods. Few (14 out of 80) of the studies we reviewed which described empirical climate change adaptations evaluated the outcomes of these adaptations. Of those that did, evidence suggests that conflicts exist between the microeconomic outcomes of adaptations, social and environmental externalities, and long-term resilience. Different public policy interventions intended to support adaptation were discussed (57 in total); the provision of informational support was the most prevalent (33%). Our analysis suggests that microeconomic adaptation occurs as a cycle in which social and ecological feedbacks positively or negatively influence the adaptation process. Thus, efforts to facilitate adaptation are more likely to be effective if they recognize the role of feedbacks and the potential diversity of outcomes triggered by public policy incentives.

Automated summary

Actors across all economic sectors in society need to adapt to the impacts of climate change. However, there is a lack of information on how microeconomic actors are adapting. Assets were identified as a key determinant of adaptation, while public policies play a crucial role in supporting adaptation processes.