How should economics assess adaptation when responding to climate change, which may require fundamental changes to economies and societies rather than incremental adjustments? This ACCREU technical report examines this emerging research field and identifies eight priorities for developing the economics of transformational adaptation. Its central proposition is that project-level appraisal alone is unlikely to provide the evidence needed for decisions about systemic change.

Developing the research agenda through co-creation

The report, Research priorities and review paper on emergent co-design (of the economics of transformational adaptation), documents a reflexive co-creation process involving researchers and policymakers from different disciplines.
At its centre was a multidisciplinary workshop held in April 2026 with around 40 participants. Rather than treating transformational adaptation as a narrowly defined economic appraisal problem, the process brought together different perspectives to examine what economics can contribute to decisions involving structural and potentially far-reaching change. The report combines documentation of this methodology with a review of relevant areas of economic research and uses both to develop a shared research agenda.

Eight priorities for the economics of transformation

The resulting agenda identifies eight areas for further research. These range from fundamental questions about the role of economics in societal transformation to specific methodological and financial challenges. Priorities include strengthening evidence on what forms of transformational adaptation work; understanding societal preferences concerning time and equity; extending microeconomic approaches such as cost-benefit and distributional analysis; and developing macroeconomic tools capable of representing structural change. The agenda also calls for greater use of political economy, institutional and behavioural economics, further research into financing and the role of the private sector, and a broader debate about economic approaches capable of addressing more radical responses to climate change.

Moving economic analysis upstream

One of the report's central conclusions concerns where economic analysis should begin. If transformational adaptation involves fundamental changes to social, economic or ecological systems, evaluating individual projects may come too late in the decision process.The report therefore argues for moving economic analysis “upstream”: examining the economic case for action, alternative transformation pathways and their systemic consequences before attention narrows to individual investments. Existing economic disciplines already offer many relevant concepts and methods, but these need to be brought together and extended beyond the analysis of marginal change. This broader perspective also matters for financing. Mobilising public and private resources for transformational adaptation requires an understanding not only of whether an individual investment generates benefits but also of the economic conditions under which larger-scale transformation can become feasible.

The ACCREU deliverable D1.5, Research priorities and review paper on emergent co-design (of the economics of transformational adaptation), documents the co-creation process, workshop methodology and underlying review and develops these into an eight-part research agenda for the economics of transformational adaptation.