Europe’s adaptation agenda grows some teeth

After lacklustre progress, the EU is plotting an all-encompassing climate resilience package, but some businesses are warning against regulatory overload

It’s déjà vu all over again.

This summer, the European Commission launched a new European climate resilience and risk management initiative, with the aim of creating an “integrated framework” for hardening EU countries against the worsening floods, fires, heatwaves, and other perils battering the continent.

EU-watchers would be forgiven for thinking this already existed. After all, just four years ago the Commission adopted an EU-wide adaptation strategy, which was meant to set out its long-term vision for the bloc’s transition “to a climate-resilient society.” Off the back of this, it also launched the EU Mission on Adaptation to Climate Change and a Climate Resilience Dialogue, both intended to facilitate much-needed climate-proofing actions.

So why does the Commission want another bite at the apple?

For starters, because four years on from the original strategy’s launch the EU does not appear to have made much progress on the adaptation front. “There’s a huge adaptation implementation gap — which we know about at the global level — but also at the European level,” explains Lena Grobusch, a policy specialist with Climate KIC, a non-profit working to combat climate risks and drive innovative resilience solutions. “[This new initiative] is supposed to go beyond just being a policy package, and have a legislative component as well.”

In other words, the 2021 iteration lacked real teeth. Now, policymakers are determined to anchor the bloc’s resilience strategy in new laws and regulations — and link it to binding targets as well. Heavyweight backing is being provided by Wopke Hoekstra, the European Commissioner for Climate, Net Zero and Clean Growth, who emphasized in a September speech that the initiative would yield “the first-ever legislation on resilience to climate change at the EU level.”

What do we want?

Not before time, either. Last year, the European Environment Agency (EEA) published a comprehensive assessment that identifies 36 climate-related to Europe’s energy and food security, ecosystems, infrastructure, water resources, and more. This year so far, vast parts of the continent have been wracked by heatwaves and scorched by wildfires.

Some member states are already committed to investing much more political and financial capital into resilience. In the wake of massive fires that tore through the regions of Orense and León, Spain’s Prime Minister Pedro Sánchez called for a “national climate pact” to handle these sorts of crises in a “unified and coordinated” way.

With this new initiative, the Commission may be laying the groundwork for a bloc-wide agreement of its own. For now, however, the details of the final plan remain vague.

Still, a public call for evidence this summer illustrated the depth of support for a more muscular resilience initiative. Over 230 individuals, research institutions, businesses, and non-profits, weighed in — overwhelmingly in support of a stronger approach. Household names like BMW Group and Zurich Insurance aired their views, as did niche consultancies and major trade associations.

However, it’s clear not everyone is after the same outcome. The Commission appears to want to organize the initiative around six key objectives: strengthening climate resilience governance; improving the use of finance; enhancing climate-proofing across relevant sectors; promoting commercial opportunities; encouraging the use of geospatial and AI tools; and embedding ‘resilience by design’ into all EU investments.

While most respondents to the call for evidence are keen on the overall package in principle, some are wary about new rules and regulations. This is especially true of businesses that already blame sustainability legislation for holding back the EU economy. BMW, for instance, warned that the “complexity of EU regulations has increased, with each legislative update introducing new definitions, methodologies, and requirements”, and called on the Commission to “reduce redundancies and administrative burdens” as part of the initiative. Biotech giant Bayer, meanwhile, pushed for a “harmonised and coherent” regulatory framework for agriculture that “gives room to the many different approaches available in farming to reach desired outcomes.”

Trade associations have also given the initiative a cautious welcome. Insurance Europe, which represents an industry very much on the frontlines of climate risk, said in its response that while the industry “fully supports the direction” set out by the Commission, policymakers should ensure the new program complements existing, member state-level efforts and warned that “EU-wide tools” may not be a “silver-bullet solution.”

Nicolas Jeanmart, Head of Personal and General Insurance and a member of the leadership group at the trade association, clarifies that there can be benefits from an EU-wide initiative. “We see that risks are increasing across EU Member States, and without appropriate measures in the resilience area, there will be problems with the price of insurance, potentially, and uninsurability of some risks in some areas,” he says.

But he adds that Brussels does not have a monopoly on climate-proofing action: “We are advocating for member states to do more in terms of where to build and how to build, notably, for example, to avoid construction in high-risk zones or flood plains. We are, on the other hand, not asking for standards at the EU level — for instance, building standards — because the right approach depends on local circumstances and risk exposures.”

Others believe momentum is building for a more coordinated, EU-centric approach, running counter to the trade body’s hopes. This is the view of Hans-Martin Füssel, an expert in climate change vulnerability and adaptation at the EEA, who helped craft the recent EU-wide climate risk assessment. “From all sides, there is recognition that a stronger collaboration across different governance levels is needed, and that there is also a role for the EU,” he says. “That is the proposal of the Commission, which would impose responsibilities on the member states to do more — and more specific things — than before.”

Resilience as enabler

While the overall shape of the new initiative is blurry at this stage, the Commission has already made clear it does not want it to drag on the EU economy. Indeed, it is consciously framing it as part of an overarching effort to bolster Europe’s prosperity — an objective given pride of place in Commission President von der Leyen’s economic strategy. “The competitiveness agenda is currently ruling the day in Brussels,” explains Grobusch.

Climate KIC sees this as a positive development. In its own submission to the call for evidence, the non-profit said building resilience is key to maintaining European competitiveness. And no wonder — left unchecked, floods, storms, and heatwaves could cause businesses to hemorrhage cash and degrade their ability to duke it out with foreign rivals.

But instead of being simply defensive, Climate KIC says the Commission should work to unlock innovation in adaptation tech, finance, and education — and proactively grow a climate-ready economy. “Embedding a culture of dynamic innovation is essential for future-proofing Europe,” the submission reads.

The group is also a keen supporter of the initiative’s ‘resilience by design’ pillar. This is less a blueprint for action and more of a shift in mindset. In short, it would compel European authorities — and perhaps member states, depending on future legislation — to ensure resilience is incorporated in the design and implementation of public investments.

This doesn’t just mean the physical attributes of infrastructure projects have to be able to withstand epic floods and apocalyptic storms. It also covers how policymakers draft budgeting documents, where they send public money, and how they go about procurement. Notably, the Commission is hinting that it plans to embed ‘resilience by design’ principles into its next Multiannual Financial Framework — its seven-year plan for structuring the EU budget.

Non-profits that responded to the call for evidence approve of this drive. “Ensuring that EU funds actively invest in resilience and adaptation should be a priority of the next Multiannual Financial Framework,” wrote think-tank E3G in in its submission.

This ties in with a broader theme raised by nearly all respondents: the question of money. “Adaptation finance is still much too low and too little right now,” says Grobusch. “So a lot of effort needs to be made on both the funding and the financing front. As it stands right now, there still is a lot of confusion about roles and responsibilities of who should fund what — and especially for the regions.”

This is sure to be a core focus of the initiative going forward. But while many parties want to see both public and private capital put to work, those with the biggest wallets are likely to want a decent payback for putting their money on the line — and it’s unclear whether adaptation projects can provide it. When asked how insurers could contribute, Insurance Europe’s Jeanmart said: “We need to keep in mind today: it’s not our money. It’s the money of policyholders. We need to manage it prudently, and we need that money to generate a return.”

This may not be an insurmountable problem, however. Indeed, it’s one the initiative itself could resolve. In its own submission, Invest Europe — a trade association representing Europe’s private equity, venture capital and infrastructure sectors — said that right now, investors “often lack reliable quantitative and qualitative data” on how resilience improves assets and positively affects valuations. The implication is that improving impact measurements, establishing clear definitions, and refining investment taxonomies could go a long way to overcoming this barrier. These are all things the initiative could address.

The measurement problem 

Quantifying the success of resilience at every level is another challenge EU policymakers have to take head-on.

But as the UN is finding, masterminding a system for measuring progress on this front is not an easy task. The Commission has put €3mn (US$3.5mn) behind a new research effort committed to producing an “outcome-oriented” adaptation indicator framework, with an eye on using this to inform potential climate resilience targets as part of the initiative. But some are skeptical. “For the EU to really adopt legally binding indicators, it really takes a bit more than having a research project coming out with some ideas. It needs to be more robust,” says Thomas Koetz, Senior Advisor for Climate Neutral and Resilient Regions at Climate KIC.

The juice should be worth the squeeze, though. After all, without indicators, without targets, the new initiative could become as toothless as its predecessor. “It’s not as easily measurable [resilience] as, let’s say, greenhouse gas emissions,” says Füssel. “[But] we need to go from a risk assessment to look for adaptation options, limits, and supporting policies — the solutions space.”

It will be a while before the new initiative delivers results. But it’s clear the Commission is committed, with President von der Leyen herself putting plenty of her own political capital on the line. Not only did she make climate adaptation a priority in her de facto political manifesto, she namechecked it in her recent State of the Union report.

Koetz, for one, believes the Commission is serious about making real progress. “This is really a step up in terms of the ambitions of the European Commission and European Union,” he says.

With the call for evidence over, the next stage in the process is a full public consultation, slated for later this year. The Commission plans to formally adopt the resulting framework by the end of 2026. But this does not mean the end of the journey. Drafting EU-wide laws to operationalize the initiative could drag on for years. Think of the European Green Deal, the bloc’s clean energy and decarbonization package. Launched in 2019, it took until mid-2021 to enter into force — and major planks of it are still being fussed over by lawmakers.

However, the cascade of extreme weather and climate-related catastrophes that engulfed the continent this year, from record-breaking wildfires in Spain to crippling droughts in Italy, makes pushing off resilience a non-starter: both politically and economically. One analysis claims the bloc lost €43bn (US$50.7bn) in regional output this summer alone, and could lose up to €126bn (US$148.5bn) by 2029.

In this context, policymakers have every reason to get climate resilience right this time.