Europe is already living with the consequences of climate change, and the economic signals are unmistakable. Heatwaves, floods, droughts, and both coastal and mountain erosion are placing growing pressure on infrastructure, food systems, and public finances, with weather-related losses mounting sharply in recent years. Against this backdrop, a new study commissioned by the Directorate-General for Climate Action (DG CLIMA) has established that the EU, its Member States (MS), and the private sector should invest about €70 billion per year until mid-century in climate adaptation. This level of spending is best understood not as an aspirational target but as a practical benchmark needed for risk reduction, avoiding escalating losses, and safeguarding the EU's long-term competitiveness.

This policy brief, developed under SLYCAN Trust's EU Work Programme, highlights several structural investment gaps between the EU’s current adaptation spending and what is required to manage future climate risks. At present, adaptation finance relies heavily on public budgets, since its main returns take the form of avoided damage rather than easily monetised profits. Yet adaptation in the EU remains difficult to track and frequently hidden within broad and ambiguous programmes, which obscures the real scale of effort and further complicates strategic allocation. Governance challenges also slow progress and reporting frameworks are often uneven, with responsibilities between public and private actors blurred and lack of mature project pipelines. At the same time, adaptation policy operates in a complex political environment where fiscal constraints and competing priorities highly limit ambition, leading to the uneven distribution of costs and benefits across MS.