Catalysing climate resilience: an analysis of the UK’s strengths in the innovation of adaptation technologies and services

This report presents the findings of a study examining the extent to which climate change adaptation technologies and services – beyond their strategic importance for resilience – also represent promising areas for economic growth in the UK. It identifies where the UK can be most competitive in adaptation technologies and services, using patent analysis, market assessment and case studies to inform policy decisions that could catalyse economic growth and support domestic and global climate resilience.

Core findings

• The UK is well-placed to become a world leader in climate change adaptation technologies and services. Realising that potential will require deliberate and sustained policy intervention.
• There will be an increase in the demand for adaptation goods and services, including flood defences, climate-resilient building materials and crops, innovative insurance products and treatments for vector-borne diseases, both at home and globally.
• While the UK has an established market in adaptation goods and services, it is underdeveloped relative to the scale of climate risk. There is far less economic activity in climate change adaptation activities than there is in mitigation activities.
• Analysis of patent data reveals that the UK has clear strengths in climate change adaptation technologies overall, ranking second in the world for revealed technological advantage in this area, a measure of specialisation.
• The UK is more specialised in adaptation technologies than in mitigation technologies, particularly in engineering-intensive adaptation technologies (fifth globally); life sciences (second globally) and ‘indirect’ adaptation technologies (third globally).
• The UK also has competitive strengths in areas of professional and business services, including engineering consultancy, environmental advisory and climate risk management, that will experience increasing demand as the climate changes.
• The UK’s insurance and financial service activities, which are highly transferable to climate change adaptation applications, are also strengths. Policy support will be needed to translate these strengths into adaptation-specific products.
• Overall, the analysis shows that the UK’s adaptation economy is in a similar position to the net zero economy a decade ago: waiting for sustained policy support, subsidy frameworks, regulatory mandates and public investment that together can create the right market conditions for growth.

Partners

This report is a partnership between the Grantham Institute at Imperial College London, and CETEx, the Grantham Research Institute on Climate Change and the Environment, the Centre for Economic Performance (CEP), the Programme on Innovation and Diffusion (POID) and the Productive & Inclusive Net Zero (PRINZ) programme, all at LSE. It is the latest in a body of work looking at the UK’s strengths in relation to capturing sustainable growth opportunities.

DOI: 10.21953/researchonline.lse.ac.uk.00138261