Efficient adaptation to climate change

Firms and individuals will likely engage in substantial private adaptation with respect to climate change in such sectors as farming, energy, timber, and recreation because it is in their interest to do so. The shared benefit nature of joint adaptation, however, will cause individuals to underprovide joint adaptation in such areas as water control, sea walls, and ecological management. Governments need to start thinking about joint adaptation, being careful to design efficient responses which treat climate change problems as they arise.