The social cost of climate change adaption if we wait

Repeatedly waiting to adapt to climate change until we get a reminder from flooding after cloudbursts and storm surges means we risk having to pay twice: once to cover the damage losses, and then again to build dikes and prepare cities for the inevitable cloudbursts to come and do other forms of climate adaption.

It takes a wake-up call, similar to the severe flooding we saw in Valencia last autumn, to get us started on climate adaptation actions.

Similar comments have been made several times in the climate adaptation debate. And so far, unfortunately, it has been all too true.

In Denmark as well, it typically takes major flooding that destroys entire residential and holiday neighbourhoods to accelerate climate adaptation. Just ask anyone who lives in Jyllinge Nordmark, in Præstø, in Vejle, in Faaborg and many other places.

It’s true that a number of Danish cities have implemented separate sewer systems, rain gardens, dry wells and other climate adaptation projects over the past 15 years, but when the probability and frequency of storm surges and cloudbursts are compared to the costs, the conclusion is clear: We need to start adapting to climate change in many more places and at a much larger scale. The sooner we get started, the better the bottom line for us as a society.

Managing Partner Charlotte B. Jepsen from the CIP Foundation points out that this phenomenon can also be seen in other types of risk management.

”Incidents with serious consequences but low probability are classic examples of where we’re likely to ignore and suppress the risks. With regard to climate-related events, another aspect is that we will have far more critical events, with both cloudbursts and flooding from the sea. Besides avoiding the high human costs, it’s fundamentally good business to get society climate resilient as quickly as possible,” she says.

In the billions

Professor Kirsten Halsnæs from the Technical University of Denmark (DTU) compares the future violent weather with an iceberg. Right now, we are only seeing a small part of the future problem: the tip of the iceberg. The storm surges we classify as 100-year events today will strike far more frequently in the future, at less than five-year intervals.

”We know that there will be far more storm surges, and if we delay climate adaption action, we’ll have to pay for increasing flood damage and the inevitable need to build more dikes and improve existing dikes,” she says.

Kirsten Halsnæs and a group of other researchers are behind calculations from DTU showing the extent of the damage – and the cost – we can expect if we wait with climate adaption.

Taking cloudbursts and storm surges together, the cost of waiting ten years for climate adaption would be DKK 72 billion, waiting 25 years would cost society DKK 158 billion, while postponing climate adaption for 50 years, to 2074, would cost DKK 262 billion.

”This is mainly the costs of repairing the physical damage. But we already know that there are also immense human costs,” she says.

People spend time rescuing belongings from flooded houses. It is often harder to sell houses in areas that have been flooded. In the aftermath of floods, there will also be sick leave and serious psychological repercussions.

”We examined the situation after Storm Bodil in 2013. Two out of three people from the flooded areas suffered psychological effects to a greater or lesser extent,” Kirsten Halsnæs says.

High human costs

The researchers from DTU also looked at the number of people and houses likely to be affected in relation to when climate change adaptation is initiated.

Today, around 4,000 people in Denmark are affected by storm surges every year, while 17,000 are affected by cloudbursts. These numbers will increase massively due to climate change.

If we fail to adapt to climate change, in 100 years, in 2124, an annual 25,000 people in Denmark will be affected by storm surges, while 36,000 will be affected by cloudbursts.

With regard to buildings, 39,000 more buildings will be flooded if climate adaptation is postponed by ten years. And if we delay 50 years, 333,000 buildings will be flooded.

”No matter whether you look at buildings or people, many will be impacted again and again if we don’t adapt to climate change. The figures emphasize the enormous human costs of waiting to implement climate protection,” says Kirsten Halsnæs.

She explains that the figures are based on a very conservative scenario, with global temperature rises of around three degrees by 2174. It’s similar to what we’re heading for today.

”If temperature rises are higher, the level of damage will also be higher. There’s a degree of uncertainty, but the benefits of climate adaptation are more likely to be greater than smaller,” Kirsten Halsnæs says.

Although this is an uncomfortable truth, it should make decision-making easier: we know with certainty that investment in climate adaptation actions will be profitable. It is already well-known that we will experience extreme rainfall and storm surges much more frequently in the future.

The report on the economic consequences of flooding drawn up by DTU for the CIP Foundation and the Danish Insurance Association in autumn 2024 looked at the frequency of severe weather events.

Meteorologists and climate scientists talk about 20-year events, 50-year events, etc. The number refers to how frequently we can statistically expect storms, cloudbursts, and similar.

Climate change is creating more severe weather. The type of cloudburst that today is referred to as a 100-year event, will be a 50-year event in 2050 and a 20-year event in a hundred years, in 2124.

For storm surges, the numbers are moving even faster. Both in terms of more severe weather and rising sea levels. As Kirsten Halsnæs says, storm surges that are 100-year events today will be five-year events in just a hundred years, according to the report from DTU.

Use the experience we have already paid so dearly for

The consequences of weather changes are clear. Following a new risk assessment from the Danish Coastal Authority, 51 municipalities, or just over half of all the municipalities in Denmark, are now required to draw up flood management plans. In other words, around one in six homeowners could be affected.

”This underscores the extent of the task. Challenges must be balanced against the fact that we know what’s needed to mitigate the destruction of buildings and infrastructure. We don’t need new and unknown technology. We need dikes and sluices, we need to adapt sewer systems and use natural areas to collect rainwater and not make us vulnerable by building new in risk areas.” Charlotte B. Jepsen says.

”One of the biggest challenges is organization, because individual landowners are responsible for coastal protection. But there are good reasons why landowners can’t secure their properties against storm surge on their own. It’s a joint task. We also need to find financing solutions,” she adds.

Charlotte B. Jepsen points out that the numbers speak for themselves.

”Fortunately, the floods here in Denmark haven’t had the fatal human cost that we saw in Valencia. But we’ve paid a high financial price in many parts of the country. These experiences have now been put into perspective by calculations based on the DTU report. So both from experience and in theory, it’s clear that we need to start climate protection projects as soon as possible” she says.