From cost to investment: the case for climate adaptation

Q: What is the challenge with the way we currently assess the value of climate adaptation?

A: Traditional economic models often fail to capture the full picture, especially when indirect and long-term benefits are difficult to quantify. They focus on direct costs and benefits, which often makes grey, technical solutions look more attractive in the short term. However, nature-based solutions deliver a wide range of indirect benefits, from biodiversity and carbon storage to mental health and neighbourhood identity, which are often not included. That creates a bias in decision-making. We’re missing out on long-term value because our models are short-sighted. We also lack a common language for value creation. If we can’t talk about it, we can’t act on it. We need to consider not just the added value of acting, but also the lost value of doing nothing. Floods aren’t just an environmental problem. They destroy our homes, infrastructure, and heritage. It’s time to shift from viewing climate adaptation as a cost to seeing it as an investment, just as we do with new buildings or infrastructure projects.

Q: So how do we fix it?

A: We need to further supplement existing models with socioeconomic investment case models. These quantify the broader value and focus on what is gained, not just

what is saved. They can show how a nature-based solution pays off over time, even if the short-term investment is higher. These models also help us weigh risks over longer horizons. When we consider the potential cost of inaction, such as damage to infrastructure, we see just how valuable preventive solutions are. At the same time, we are still in the early stages of developing these tools. Work is underway to quantify better co-benefits, such as improved mental health or reduced insurance claims, but the methods are still evolving and have not yet been widely implemented.

The potential, however, is significant, especially when it comes to showing which stakeholders stand to gain, building trust, and creating stronger alignment across sectors. By combining traditional models with these new approaches, we move towards a more holistic, evidence-based foundation for decision-making. One that makes the benefits of action clearer and gives planners, politicians, and investors greater confidence.

Q: What about the stakeholders who benefit from such approaches?

A: That’s a key point. Often, the benefits fall to parties other than the investors. For example, a municipality might pay for a green infrastructure project, but the state saves on health costs. Or a water utility reduces flood risk, while private property values go up. To address this, we need models that make the distribution of benefits more transparent, allowing us to create smarter cost-sharing agreements among stakeholders. However, better models alone are not enough. Legislation and regulation play a decisive role in determining how costs and benefits can be shared. Smarter cost-sharing, therefore, depends on both improved modelling and supportive framework conditions. When those align, the conversation becomes far more collaborative.

Q: Are people ready for this change?

A: More than ever. Everyone navigates risk, whether in public institutions, insurance, or private investment. They’re looking for long-term, stable returns and resilience

offers that. If we can prove the case with evidence, we can unlock more investment. And even though the methods are still in development, we now have better tools than ever to generate that evidence. However, to fully realise this potential and enable it at scale, stronger political priorities and supportive framework conditions are needed. There is also generally increasing pressure to take climate resilience seriously, which means that decision-makers are more open to alternatives. I think we’re reaching a maturity point where we don’t just want to mitigate risk but also invest in liveability and better futures.

Q: Is this only relevant for Copenhagen?

A: Not at all. Every city facing climate pressure should rethink how it values resilience. If Copenhagen succeeds in doing this well, it could become a reference point for Europe. The challenges here such as aging infrastructure, climate impacts, and dense development are common across almost all urban areas. So, this isn’t just about local protection. It’s about leadership in financing and delivering the next wave of resilient, green cities.

To learn more about how the Nordic capital cities can inspire global transformation, download our report, The Nordic Way.