Economic opportunities from investing in climate resilience in the UK

Findings from Part A of PROSPER 2026

The UK is already experiencing significant economic impacts from climate change, and these will increase further in future decades. Without comprehensive and well-funded adaptation strategies, risks will grow, including from agriculture losses, flooding, impacts of heat on health and reduced labour productivity.

This policy brief describes economic risks and adaptation opportunities for the UK in relation to agriculture, flood and coastal management, health and labour productivity. The brief summarises findings from Part A of the PROSPER (Physical-risk & Resilience Outcomes for Spending, Planning & Economic Returns) research project. This part of the project is designed to inform fiscal decision-makers on potential targets for adaptation funding.

The damages are reported as the expected annual damages for two climate scenarios, ‘Medium Warming’ and ‘High Warming’. For the 2030s and 2050s, the authors also describe damages associated with extreme value or ‘tail’ events.

Main findings

• Projected annual economic damage under a High Warming climate scenario (relative to a baseline of pre-industrial climate conditions) could increase to 4% of the UK’s gross domestic product (GDP) by 2050 and 6% by 2075, expressed in GDP-equivalent welfare terms.
• This projection includes the potential for climate-change-driven global economic disruption, which represents the largest proportion of projected economic damage; however, domestic risks to the UK economy linked to climate change are also prominent.
• By the 2050s, extreme events linked to climate change could result in large-scale disruptions across the UK economy. Estimates suggest there is a 1-in-200-year risk of one or more of the following in a single year: agricultural losses exceeding £10 billion, flood damages exceeding £60 billion, labour productivity losses exceeding £70 billion and heat-related excess mortality exceeding 21,000 deaths.
• Projected domestic risks could be reduced by nearly 30% with strategic investments in climate-adaptation measures such as flood defences and more climate-resilient infrastructure at the levels outlined in the UK’s third National Adaptation Programme (NAP3) and related government strategies.
• While adaptation measures bring major benefits, strengthened global efforts to mitigate climate change remain critical. Projections suggest that avoiding a High Warming climate scenario will halve domestic economic risks in the UK, highlighting the importance of pursuing strong international action on climate change.

DOI: 10.21953/researchonline.lse.ac.uk.00140343