Box sets » Fiscal risks and sustainability - September 2024
Adaptation measures can significantly reduce the economic impact of climate change, but come with additional costs that add to the fiscal pressure of climate change. This box discussed the current state of adaptation investment within the UK.
There is growing literature on the economic costs of climate change, where there is near-consensus on the negative impact on economic output but with a wide range of estimated losses. This box explored the the scale of, and reasons for, such differences and examined relevant UK studies in this context.
In 2010 and 2018, Defra and the Environment Agency produced reports exploring the costs of the 2007 summer floods and 2015-16 winter floods to the UK economy. In this box we used these numbers to estimate the direct fiscal costs of these flood events.
Our long-term fiscal projections focus on public spending on health, but private spending accounts for a significant share of health expenditure in the UK and particularly in other advanced economies. This box explored recent trends in private health spending in the UK and how this compares with other advanced economies.