Economics of Climate Adaptation (ECA) - Assessment Tool by KfW Development Bank

7 months, 3 weeks ago


Currently, negative effects from climate change present a major risk for millions of people, environments and industries. This pressure has the potential to undermine development projects at different scales, from local initiatives to the multilateral agendas. In order to increase the economic resilience for the future, decision-makers around the world have the responsibility to understand and foresee the vulnerability of their projects to these external risks.

Aligned with this need, KfW Development Bank has developed the Economics of Climate Adaptation (ECA) Methodology, a climate risk assessment approach that aims to analyze and propose several adaptation measures addressing the specific features of each initiative in a systematic way. It is of interest to institutions and organizations engaged in climate variability and climate change as well as sustainable development activities therefore targeted especially at donors, project partners and implementation teams.

The ECA tool is divided into 4 main stages. The first stage is to choose and get familiar with a specific analysis engine methodology that supports in developing the risk models. In this case, the open source platform Climada is recommended due to its capacity to make a probabilistic assessment based on four core variables: people & assets, hazards, damage functions and adaptation measures. The second stage is scoping and data acquisition considering geographic location, time period, particular hazards, and socio-economic conditions, among other relevant variables. The third stage is the risk assessment, which is developed by using the analysis engine selected to simulate different scenarios, estimate the variability of the hazards, valuate the assets and build a damage function. The last stage is to address the risk interpreting the results under the umbrella of climate change adaptation measures. It is recommended to grade the different outputs under cost-effective and feasible investments to identify the best measures for each particular hazard and/or location for an early climate resilient intervention.

In addition, the ECA also offers dynamic relations between technological tools and capacity building processes adaptable to the different scales, stakeholders and durations of the projects, developing a follow-up strategy for each project stage.


For more information about the ECA Assessment methodology, please visit the following links:


ECA Guidebook for Practitioners:

Climada analysis platform:





Adaptation Catastrophe risk management Climate Change Disaster Risk Finance Mitigation