Public investments in Climate Change Adaptation (CCA) are progressing, and the private sector is being increasingly mobilised. Yet, the prioritisation of these investments remains a key challenge due to the scarcity of resources and the often long-term, uncertain nature of CCA benefits. As a result, academics are now turning to multi-criteria assessment to support decision-making by capturing multiple benefits of CCA investments.

Despite growing recognition of multiple CCA benefits, the economic return of CCA investments remains one of the least understood, representing a persistent gap in current research. This gap is critical given that studies have found that the economic and social co-benefits often deliver the greatest overall benefits, even more so than avoided losses.

This study provides the first quantitative macroeconomic assessment of CCA using a Multi-Region Input Output (MRIO) model to map the output and value-added effects of CCA investments that flow through the European economy. The analysis covers 19 sectors across 27 European countries for five distinct climate hazards and three reference years, employing a Global Value Chain (GVC) framework combined with a Global Sensitivity Analysis (GSA).

From a theoretical perspective, this study contributes by revealing pivotal CCA sectors, European sectoral and national value-added allocation, distinct GVC characteristics and economic return metrics that can enhance CCA prioritisation. From a societal perspective, the findings provide policy-relevant insights to guide more effective adaptation strategies. First, by identifying pivotal sectors that can be targeted for industrial policies. Second, by identifying economic spillovers across countries, this study aims to reopen discussions on EU-level coordination. Third, by identifying high-macroeconomic-return on CCA investments, this study aims to support the prioritisation of CCA investments.