Strengthening the investment case for climate adaptation: A triple dividend approach

This research paper introduces the Adaptation Triple Dividend of Resilience (AdapTDR) database, evaluating 320 adaptation investments across 12 countries to demonstrate that climate adaptation yields high economic, social, and environmental returns beyond simple loss avoidance.

• Adaptation investments demonstrate exceptionally high returns on investment, with an average economic internal rate of return (EIRR) of 26.7 percent and a median EIRR of 20.3 percent. The study estimates that US$1 invested in adaptation can yield over $10.50 in benefits over a 10-year period, with total evaluated investments of $133 billion potentially generating $1.4 trillion in benefits.
• The 'triple dividend' framework reveals that adaptation benefits consist of avoided losses (first dividend), induced economic development (second dividend), and social and environmental benefits (third dividend). On average, the second and third dividends are double the value of avoided losses, meaning the viability of many investments does not depend on a climate disaster actually occurring.
• There is a strong synergy between adaptation and mitigation, with nearly half of the evaluated investments expected to generate greenhouse gas (GHG) emissions reduction benefits. This alignment opens opportunities for carbon finance, particularly in the forestry, energy, and sustainable agriculture subsectors.
• The highest returns are found in subsectors that save human lives, such as health and disaster risk management, where returns are driven by reduced mortality and morbidity. Sustainable agriculture and forestry also show high returns due to poverty reduction and mitigation co-benefits.
• Current project appraisal processes significantly underestimate adaptation benefits because they rarely quantify all three dividends. Only 8.4 percent of the 320 projects in the AdapTDR database valued all three dividends, and 74 percent of projects that cited avoided-loss benefits failed to provide a monetary value for them.
• High-return adaptation investments typically combine 'upstream' components, such as risk assessments and institutional capacity building, with 'downstream' components, which are the higher-cost on-the-ground resilience-building activities.
• The availability of private finance for adaptation is hindered by a lack of disaggregated data on induced economic benefits. Emphasizing the second dividend (economic growth and value creation) could attract private capital through instruments like blended finance and resilience bonds.

APA

Brandon, C., Kratzer, B., Aggarwal, A., & Heubaum, H. (2025). Strengthening the investment case for climate adaptation: A triple dividend approach. World Resources Institute. https://files.wri.org/d8/s3fs-public/2025-06/strengthening-investment-case-climate-adaptation.pdf?VersionId=een52ahEiIO4IaOA6e8ps4fQCN4xTtph&_gl=1*nbbbp*_gcl_au*MTIwNjQxNjg1MS4xNzYxMzU4MTkx

Chicago

Brandon, Carter, Bradley Kratzer, Aarushi Aggarwal, and Harald Heubaum. Strengthening the investment case for climate adaptation: A triple dividend approach. World Resources Institute, 2025. https://files.wri.org/d8/s3fs-public/2025-06/strengthening-investment-case-climate-adaptation.pdf?VersionId=een52ahEiIO4IaOA6e8ps4fQCN4xTtph&_gl=1*nbbbp*_gcl_au*MTIwNjQxNjg1MS4xNzYxMzU4MTkx.

Wikipedia

{{cite report |last1=Brandon |first1=Carter |last2=Kratzer |first2=Bradley |last3=Aggarwal |first3=Aarushi |last4=Heubaum |first4=Harald |title=Strengthening the investment case for climate adaptation: A triple dividend approach |publisher=World Resources Institute |date=June 2025 |url=https://files.wri.org/d8/s3fs-public/2025-06/strengthening-investment-case-climate-adaptation.pdf?VersionId=een52ahEiIO4IaOA6e8ps4fQCN4xTtph&_gl=1*nbbbp*_gcl_au*MTIwNjQxNjg1MS4xNzYxMzU4MTkx |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{brandon2025strengthening, author = {Brandon, Carter and Kratzer, Bradley and Aggarwal, Aarushi and Heubaum, Harald}, title = {{Strengthening the investment case for climate adaptation: A triple dividend approach}}, institution = {World Resources Institute}, year = {2025}, month = jun, url = {https://files.wri.org/d8/s3fs-public/2025-06/strengthening-investment-case-climate-adaptation.pdf?VersionId=een52ahEiIO4IaOA6e8ps4fQCN4xTtph&_gl=1*nbbbp*_gcl_au*MTIwNjQxNjg1MS4xNzYxMzU4MTkx}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }