Economic motivation for raising coastal flood defenses in Europe

The study addresses how Europe should adapt its coasts to rising extreme sea levels (ESLs) driven by climate change. With over 200 million Europeans living within 50 km of the coast, coastal zones host dense populations, valuable infrastructure, and ecosystems but are highly vulnerable to sea-level rise and potential changes in storms. Global mean sea level has already risen 13–20 cm since pre-industrial times and is accelerating, increasing coastal hazard and recession. Without additional protection and risk-reduction measures, Europe could face unprecedented coastal flood losses by 2100. The research evaluates whether and where raising hard defenses (dykes) is economically justified under different climate and socio-economic futures, assuming European coastal communities largely choose to hold the line. It quantifies present and future ESLs, inundation, exposure, and damages, and applies a cost–benefit analysis (CBA) to determine economically efficient dyke heightening strategies across ~10,000 coastal segments under a sustainability (RCP4.5–SSP1) and a fossil-fueled development (RCP8.5–SSP5) scenario.

Adaptation options to coastal flooding are commonly categorized as protect, accommodate, retreat, or do nothing. Retreat can reduce risk but faces social and practical barriers, especially where critical infrastructure exists. Accommodate measures such as early warning, emergency response, and flood-proofing can reduce damages. Protection can be natural (dunes), artificial (dykes), beach nourishment, or nature-based solutions; while hard protection offers predictable safety levels and is prevalent in developed European coasts, it can negatively affect landscapes, increase erosion, reduce amenity values, and create catastrophic failure risks. Recent literature emphasizes combining strategies, including nature-based solutions, for sustainability. Previous large-scale assessments indicate growing coastal flood risk with sea-level rise and substantial benefits from strategic protection, but detailed, probabilistic, spatially dependent ESL projections and subnational cost–benefit optimization remained limited; this study advances these aspects.

The authors use the LISCOAST framework to integrate hazard, exposure, vulnerability, and adaptation economics across European coasts. Key steps: (1) Hazard: Project ESLs to 2100 along ~10,000 coastal segments (≤25 km) under RCP4.5 and RCP8.5 using an ensemble of six climate models. ESL components (mean sea-level rise including ice-sheet and ice-cap contributions, meteorological contributions driving storm surge and waves, and tides) are added linearly. Non-stationary extreme value analysis yields ESLs as a function of year and return period (2–20,000 years). (2) Inundation: ESLs force 2-D hydraulic simulations (Lisflood-FP) at 100 m resolution to produce flood extent and depth, accounting for current protection standards from FLOPROS and national datasets; SRTM DEM provides terrain elevation. (3) Exposure and vulnerability: Flood maps are overlaid with land use (refined CORINE, 44 classes) and population datasets (baseline population 2011; future gridded SSP-based projections for population and urbanization). Country-level GDP projections (IIASA and OECD) are distributed spatially via population changes; depth–damage functions (DDFs) by land-use class are scaled to NUTS3 GDP per capita. Urbanization changes drive most damage shifts. (4) Impacts: For each segment, direct damage and people flooded are computed annually to 2100 across return periods using DDFs and flood depths; areas below future high tide are assumed fully damaged. (5) Probabilistic dependency: Spatial dependence of ESLs is modeled with copulas, and 10,000 Monte Carlo realizations of annual ESL sequences (2020–2100) are generated per segment to produce probabilistic time series of damages/people flooded. (6) Adaptation options: For each segment, dyke crest elevation is varied from current level to 1 m above the local 99th percentile ESL of the century, discretized into 40 increments. Upgrades are assumed to occur progressively from 2020–2050 and then held constant. (7) Costs: Investment costs (linear in heightening) and annual maintenance (1% of capital) are derived from two global dyke cost datasets, converted to 2015 €; unit costs are sampled from fitted distributions. Costs are proportional to segment coastline length. (8) Benefits: For each increment and realization, benefits equal avoided damage relative to no additional protection (zero damage if ESL ≤ crest; breach and full modeled damage if ESL exceeds crest). (9) Economic evaluation: Net present value (NPV) sums discounted costs (negative) and benefits (positive) over 2020–2100. Social discount rates follow the Ramsey rule with p=1, η=2, and g from macroeconomic projections, yielding rs=5% for EU Cohesion countries and 3% for other Member States. For each segment and increment, 10,000 NPVs are computed; the increment maximizing mean NPV defines the optimal design. Benefit–cost ratios (BCRs) accompany results. Aggregation to NUTS2, country, and EU levels sums segment NPVs, costs, and benefits. Uncertainty is represented via very likely (5th–95th percentile) ranges.

• ESL rise: European average 100-year ESL increases very likely by 34–76 cm (RCP4.5/SSP1) and 58–172 cm (RCP8.5/SSP5) by 2100, with largest increases in the North Sea and smaller increases in the northern Baltic (land uplift) and Iberian Atlantic (milder storms).
• No-adaptation impacts (2100): EU expected annual damage (EAD) rises from €1.4 bn baseline to €209.8 bn (29.7–844.5) under Sustainability and €1268.4 bn (160.9–4731.1) under Fossil fuel development. Expected annual people flooded (EAPF) rise from 100k to 1.6126 million under Sustainability and 3.8982 million under Fossil fuel development. Country-level figures are provided in Tables 1–2.
• Economic efficiency of adaptation: Along 76% (likely 76%–89%) of coastline under Sustainability and 68% (67%–81%) under Fossil fuel development, BCR<1 (no economic motivation to heighten). Benefits outweigh costs mainly where population density exceeds ~500 people/km². At NUTS2 level, adaptation is efficient (BCR>1) in ~82% (Sustainability) and ~86% (Fossil fuel development) of regions.
• Country-level BCRs and protected coastline: Highest shares of coastline with BCR>1: Belgium 85%–95%, France 58%–66%, Italy 53%–59%. Mean country BCRs (Sustainability; Fossil): Netherlands 21.1;34.3, Belgium 16.6;25.8, France 10.5;24.8, Italy 9.7;16.4, Cyprus 11.1;15.6, Ireland 8.8;18.7, Greece 9.0;10.5. Lowest: Malta 1.6;1.7, Bulgaria 2.0;2.1, Lithuania 2.1;2.1, Latvia 2.1;2.1, Croatia 1.9;2.3. EU mean BCR: 8.3 (6.1–17.5) under Sustainability; 14.9 (12.3–29.6) under Fossil fuel development.
• Special case: The Netherlands have very high current standards (~10,000-year), yet high exposure yields high mean BCR due to rare, high-impact events in some realizations; low-end BCRs can be near zero when ESLs do not exceed existing standards.
• Adaptation costs and design: Expected annual undiscounted EU investment for further dyke improvements averages €1.75 bn/yr (very likely €1.75–€7.39) under Sustainability and €2.82 bn/yr (2.82–11.89) under Fossil fuel development. Highest annual costs: UK (€522.7–719.2 million), France (€269.7–385.0 million), Norway (€125.7–296.2 million), Italy (€180.3–260.9 million), Germany (€125.5–229.6 million). Additional mean defence height at locations where upgrades are optimal: 0.92 m (Sustainability) and 1.04 m (Fossil fuel development); country means range from Malta 0.31–0.39 m to Belgium 2.85–3.43 m; others above EU mean include Slovenia 2.12–2.32 m, Poland 1.57–1.66 m, UK 1.47–1.50 m, Germany 1.42–1.44 m, Netherlands 1.30–1.53 m, Latvia 0.83–1.35 m, Estonia 0.97–1.42 m.
• Residual risk after optimal adaptation (2100): EU EAD reduces to €8.88 bn (Sustainability) and €23.98 bn (Fossil fuel development), representing ~96% (€200.1 bn) and ~98% (€1.24 tn) reductions vs do-nothing. EAPF reduces to 653.4k and 1,343.1k, lowering the do-nothing EAPF by ~59% (−959.2k) and ~66% (−2,555.1k), respectively. Regional hotspots remain (e.g., parts of UK, Ireland, Denmark, Romania, Croatia, Cyprus, Sicily, Andalucía, Bretagne, SE Baltic, Provence).
• Discounting sensitivity (EU-wide, comparing no discounting vs discounting): Without discounting, optimal dyke heights are on average 0.04 m (Sustainability) and 0.11 m (Fossil) higher, annual costs increase by €1.41–€2.21 bn, % coastline with BCR>1 increases by ~7.5%–7.8%, mean country BCR increases by ~7.0–18.0, and residual 2100 EAD/EAPF decrease further by €5.11–€16.43 bn and 40.6k–118.9k people, respectively.

The analysis shows that without additional protection, coastal flood risk in Europe escalates sharply by 2100, but economically efficient dyke heightening can avoid the vast majority of damages, especially in densely populated, high-value coastal regions. Benefits of protection are highly spatially heterogeneous, reflecting differences in ESL change, geomorphology, existing standards, coastline complexity (affecting costs), land uplift (reducing relative SLR in the Baltic), and socio-economic exposure. While much of the coastline has BCR<1, aggregating to regional and national scales yields high economic efficiency because urban centers dominate benefits. The Netherlands exemplify how high exposure and rare extreme events produce high expected benefits despite already high standards. Adaptation leaves residual risk, with notable regional hotspots requiring attention. The probabilistic framework, incorporating spatial dependence in ESLs and uncertainty ranges, supports risk-informed decision-making and allows stakeholders to choose more conservative designs (higher standards, higher costs, lower residual risk) depending on acceptable risk thresholds. Discounting strongly affects optimal designs by de-emphasizing future benefits; lower discounting increases investment and protection, reducing residual risk. The results align with prior studies and IPCC assessments that protection can reduce 2100 EAD by orders of magnitude, and they provide subnational prioritization insights for Europe.

Economically efficient increases in coastal dyke heights across targeted segments of Europe’s coastline can avoid at least 83% of flood damages this century, with mean EU BCRs between 8.3 and 14.9 depending on scenario. Optimal upgrades are concentrated along urbanized, high-value stretches, covering roughly 24%–32% of coastline, and entail average additional crest elevations near 1 m. Even after adaptation, some residual damages and affected populations remain, highlighting the need for complementary measures. The study’s probabilistic, spatially dependent framework provides a robust basis for prioritizing investments and underscores the importance of discount-rate choices. Future work should: integrate broader costs and co-benefits (e.g., ecological impacts, coastal squeeze, amenity changes), evaluate compound river–coastal flooding interactions at estuaries, resolve local-scale topography and defenses with higher-fidelity data, and assess portfolios mixing hard protection with nature-based solutions, accommodate, and managed retreat strategies tailored to local contexts.

• Benefits limited to avoided direct flood damages up to 2100; dyke lifetimes and benefits beyond 2100 not included.
• Environmental and socio-economic externalities of protection (e.g., ecosystem loss via coastal squeeze, amenity changes) are not accounted for.
• ESL components are combined linearly; potential non-linear interactions among sea-level rise, tides, surge, and waves are neglected due to scale constraints.
• Large-scale DEM (SRTM) and generalized protection standards introduce topographic and defense representation uncertainties; local features are unresolved.
• Exposure/vulnerability rely on land-use and population projections and GDP scaling, with uncertainties in urbanization patterns and asset valuation.
• Compound flooding with rivers at deltas/estuaries is not explicitly modeled within the coastal hazard module.
• Results depend on discount-rate assumptions (Ramsey parameters, growth), unit cost datasets, and assumed construction/maintenance cost relationships.
• Optimization horizon ends at 2100, potentially underestimating long-term benefits and required heights under continued sea-level rise.