Adapting economic development to climate change

Context

Climate change has a huge impact on the economic growth and development of countries. There is therefore a need for methods for assessing the economic impact of climate risks and developing potential adaptation scenarios.

Up to now, there has been a lack of experience both worldwide and in the programme’s partner countries (Kazakhstan, Georgia, and Viet Nam) with regard to integrating climate risks into macroeconomic forecasts. Climate data and results from sector models need to be fed into macroeconomic models to map the impacts of climate change on social and economic aspects such as income and employment and to identify appropriate adaptation actions.

Objective

The partner countries use macroeconomic models to incorporate climate risks into their long-term economic and adaptation planning. This allows climate-resilient economic development.

Approach

The project enables national modelling authorities to create long-term economic models together with economic experts from Germany.

It provides extensive training for model developers and model users, who then enable the authorities in the partner countries to include the impacts of climate change and appropriate adaptation actions in their economic planning. The project receives support with the modelling and holding the training courses in Georgia and Kazakhstan from the Institute of Economic Structures Research (GWS) and in Viet Nam from the Halle Institute for Economic Research (IWH).

The project advises ministries on applying findings from the modelling in political decision-making processes and in planning. Furthermore, private, public, and international financing options for adaptation actions are identified and proposed.

It also promotes international exchange by sharing project experience and developing communication materials. The aim here is that macroeconomic models for adaptation planning should be used beyond the partner countries. For this purpose, the project is already cooperating with another GIZ project called DIAPOL-CE in Nigeria and Mongolia to support modelling capacity building.

Last update: November 2023