Effects of climate change and projections of socio-economic development can be used to model how climate could impact different sectors of society and the economy.  This can be used to assess different adaptation options (see figure below). 
 
There is a broad body of work which has started to assess climate change impacts, at the national and regional level across different sectors.  For instance, through the TE2100 project, the Environment Agency has looked at potential flooding impacts in the Thames Estuary until 2100.  The project determined the risk of a storm surge breaking the Thames Barrier.  This included flooding of 500,000 homes, 8 power stations and 4 heritage sites, which could become significant after 2070. 

Storm surge at the Thames Barrier

A Literature Review of the current research on climate change impacts has been carried out to inform the Climate Change Risk Assessment.  This showed that basic quantitative research has been undertaken for health, flooding, water resources, energy, agriculture and biodiversity.  Less work has been done on impacts to the business and transport sectors.  Very few studies have looked at valuing the impacts of climate change.  Hence there is a need to develop understanding of the UK climate impacts, across all the key sectors and all regions. 

Modelling and valuing the impacts of climate change is challenging.  Importantly, there are difficulties in obtaining baseline data, and in developing accurate assumptions to project impact changes.  For example, analysis of the climate impacts on the energy sector is complicated by assumptions about socio-economic development, future energy prices and autonomous adaptation, such as the rate of uptake of air-conditioning. 

Scoping the impacts of climate change can be used to estimate the gross benefit of any adaptation measure, compared to a no adaptation scenario (business-as-usual) and relative to development where no climate change had occurred (see figure below).  This enables development of effective adaptation strategy.    

Assessing the impacts of climate change and adaptation

Source: Adapted from Boyd and Hunt 2006, Report for the Stern Review