ClimateAdaptation.life had the pleasure to speak with Daisy Jameson, Senior Policy Fellow at the LSE Centre for Economic Transition Expertise. She is the corresponding author of the paper Catalysing climate resilience: an analysis of the UK’s strengths in the innovation of adaptation technologies and services, published last month. “There is clear scope for collaboration across countries, particularly those facing similar hazards, despite hard-engineering solutions that are site-specific,” said Jameson, adding that countries are exposed to climate change not just directly, but also through supply chains and imports. Hence, climate adaptation policies represent a space for international cooperation. She explain that the strongest export potential for climate adaptation services and products lies in tradeable areas like forecasting and modelling software, resilient materials, and insurance and financial products. “Standards can play a role in clarifying the potential scale of demand that markets can grow to meet,” she adds, also underlining something that the UK is facing write now: the British government is starting to consider overheating more urgently.

By 2030, the global investment required to adapt to the impacts of climate change is expected to reach up to US$1.3 trillion annually [data from the UN Adaptation Gap Report], with the UK projected to need to invest over £10 billion each year [data from the UK’s Climate Change Committee]. What are the geographic areas most affected when speaking about these numbers? And what are the main climate hazards?

The two figures we quote here operate at different scales. Globally, the most affected areas are low- and middle-income countries, which are the most vulnerable to climate impacts and have the least capacity to act. In the UK, the main hazards are flooding, overheating, and storms. Flood risk is concentrated in coastal, low-lying, and floodplain areas, while overheating is felt most acutely in cities, particularly in the south of the country, where the urban heat-island effect results in higher temperatures. 

Do you think that countries with similar geographies, which therefore share similar risks, should or could collaborate, also commercially? In other words, don’t you think that product development is necessary, but that testing requires certain conditions, including meteorological conditions? In other words, are export markets mostly the ones with similar conditions? 

The scope for collaboration depends on the type of intervention. Hard-engineering solutions (e.g. sea walls) are landscape-specific, so testing will require certain conditions. However, some of the technologies will still be transferable across locations. Many other solutions, e.g., water-efficiency technologies, weather forecasting and climate modelling software, resilient building materials, and insurance and financial products, are largely transferable. There is therefore clear scope for collaboration across countries, particularly those facing similar hazards. 

You start your report saying that the UK is experiencing increasing impacts from climate change, including more frequent and severe floods, heatwaves, and storms. At the same time, the national climate adaptation strategy seems to be focusing mostly on floods and storms. Am I wrong? Do you think heatwaves have been overlooked by the British decision makers? But the population seems quite vocal about it…

Flooding has been a priority in the UK, partly because it’s a persistent, worsening risk with clear lines of responsibility (the Department for Environment, Food and Rural Affairs and the Environment Agency deliver and monitor the response). The government is starting to consider overheating more urgently, but the UK’s Climate Change Committee still assess their actions as limited. 

You go on explaining that the UK has an established market in adaptation goods and services, but that there is less economic activity in this field than in mitigation. At the same time, though, there is an increase in global funds for adaptation. Am I wrong? What’s missing here? Do you see in general a mismatch between demand and supply for adaptation goods and services?

The core issue here is that adaptation is hard to monetise. Its benefits are diffuse, often non-market, and depend on how much the climate actually changes, so there's rarely a clear private return. That's why adaptation has historically been publicly funded, with only around 11% of adaptation finance coming from private capital. It’s therefore less of a simple demand-supply mismatch than missing market signals, with demand existing and growing, but it isn't yet being translated into investable, priced opportunities. Closing that gap is largely a policy and regulatory task rather than something market forces will resolve on their own.

Do you think there is room for collaboration between the UK and the EU when it comes to climate adaptation? Did any collaboration opportunities fall through because of Brexit?

Many of the risks the UK faces from a changing climate are similar to those faced by Northern European countries in particular. The UK is also exposed to climate change in other countries through its supply chains and imports. Cross-border collaboration is therefore critical for managing these risks. 

You refer to climate change adaptation technologies (CCATs) and related rankings. Do you think there might be any bias in that, for instance, because of different approaches to patent and categorisation/classification?

There are some important caveats with the use of patent data. Patents are filed where intellectual-property protection is strong, so low- and middle-income countries are often underrepresented. Patents also mainly capture goods rather than services, where a lot of adaptation activity actually sits, which is why we supplemented the patent analysis with service-sector case studies. We also filtered to multi-application patent families as a proxy for quality, which understates start-ups and small firms. On classification specifically, we rely on the Y02A 'adaptation' tag; an independent check found that around 89% of a sampled set were clearly adaptation-related, which gave us reasonable confidence. 

According to your report, the United Kingdom is ranked second in the world for revealed technological advantage in CCATs, fifth for engineering (adaptation at coastal zones, in water systems, and in infrastructure), second for life sciences, and third for indirect adaptation technologies, like weather forecasting, climate simulation, assessing water resources, and monitoring invasive species. Do you expect these rankings to change in the next decade or so? What are the factors influencing them?

We don’t make forecasts in the report, so I’d be cautious about predicting specific movements. The factors that will matter are the levels of investment in innovation, whether policy support helps to grow both the supply and demand for these technologies, and how fast other countries move relative to the UK. 

What are the potentially biggest export markets for these services and products?

We didn’t analyse export markets in this work, but it’s something we are considering building more evidence on. The strongest export potential lies in tradeable areas like forecasting and modelling software, resilient materials, and insurance and financial products. 

What other countries should do to develop technologies themselves in this realm?

Our recommendations broadly translate to other jurisdictions. Using industrial strategy levers to support sectors that are innovating in adaptation technologies is one route, e.g. R&D funding, support for commercialisation and scale-up, and creating clusters that connect small innovators with larger industrial partners. The key principle is identifying where domestic strengths align with rising adaptation demand and backing those areas deliberately. 

You explain that the climate adaptation innovation ecosystem is dominated by small and medium-sized enterprises (SMEs). What are the barriers to commercialisation? What’s the role of standards in this field? And what’s the role of collaboration opportunities with other companies?

Main barriers for SMEs are access to finance and export markets, along with the challenge of scaling up production. Standards can play a role in clarifying the potential scale of demand that markets can grow to meet. On collaboration, networks or clusters linking small innovators with large partners and end-users (especially in construction, infrastructure, and utilities) could bridge the gap between invention and deployment.

In your recommendations for policymakers, you say that identifying areas where demand is increasing due to the need to adapt to a changing climate offers a new lens for considering growth opportunities in sub-sectors. But do you think that needs to translate immediately into demand? In other words, is the knowledge about climate adaptation already enough to show/prove to the population that they have needs they were not previously aware of?

Our consistent message in the paper is that adaptation demand tends to need enable signals, e.g. regulation, standards, disclosure requirements, procurement rules etc., to signal the need for adaptation action. Sustained growth will depend on policy action creating adequate signals, rather than on market forces alone. 

You explain that insurance and financial service activities, which are highly transferable to climate change adaptation applications, are also British strengths. However, policy support will be needed to translate these strengths into adaptation-specific products and instruments. What form of policy support is needed in this field? 

As noted in the services part of our report, we suggest clearer demand-side signals through regulation and disclosure so physical climate risk is properly priced. We also suggest that public finance mechanisms that de-risk private investment, such as a government-backed first-loss facility or guarantee scheme, and procurement reform, e.g. mandating climate-adaptation assessments in major infrastructure contracts can translate the UK's existing financial-services strengths into adaptation-specific products at scale.

You report that, since 2022, Flood Re has introduced ‘Build Back Better’ payments of up to £10,000 above like-for-like reinstatement to support resilient repairs, a step towards adaptation-oriented insurance design. In France, for example, the life insurer AXA will pay 50% of the extra cost of ‘green’ improvements, covering both climate adaptation and transition, after a major extreme event. How global can these policies and approaches become?

These examples are promising but are not yet mainstream. Uptake and supply of resilience-linked insurance is limited by many factors. These approaches will require policy intervention to encourage their supply at scale, including through supportive regulation and standardised resilience certifications. We write more about this in the context of climate risk to the agriculture sector in the EU here: https://cetex.org/publications/rooted-in-resilience-crop-insurance-as-a-fiscal-tool-for-climate-adaptation-and-nature-restoration-in-the-eu-agri-food-system/ 

You also explain that the public sector is expected to account for a large proportion of this required investment (Organisation for Economic Co-operation and Development [OECD], 2025), but that the private sector will also need to invest directly to enhance the resilience of assets, operations, and supply chains. Would you be able to quantify the percentage of investments from the public and the private?

It's hard to put a precise figure on it, and the split is highly risk-dependent. The public sector is expected to account for a large share, partly because adaptation benefits are diffuse and hard to monetise. Historically, only around 11% of adaptation finance has come from private capital. The private sector will still need to invest directly to protect its own assets, operations, and supply chains. 

What's the role of blended finance, and how would it work?

Blended finance combines public and private capital to make adaptation projects investable, and can therefore be a helpful tool for adaptation. By using public money to absorb early risk, e.g., through guarantees, it improves project viability and brings commercial investors in on terms they might avoid. That matters for adaptation because returns are often uncertain. Again, this isn’t my area of expertise.

At the same time, climate change poses mostly risks, but also some opportunities for countries in cold areas. Are there solid data about this? And what would be the technological ranking there? What would be the role of finance in this case? 

This is outside the scope of our report. There's some evidence of small, temporary benefits in certain areas, e.g. to crop yields in some regions, but the overwhelming evidence is that climate change will be a net cost to the UK and the world. 

To conclude, you report that the UK is specialised in financial services (De Lyon et al., 2022) and is consistently ranked first in the world in green and sustainable finance (Caldecott, 2022). Do you think that political mistakes within the British government could change this?

The UK's leading position in green and sustainable finance is a strength, but it isn't guaranteed. One of our central findings is that this market depends heavily on consistent regulatory and policy signals to sustain demand.