RFAs: Economics of Climate Change and Cost of Inaction

The European Commission’s Economics of Climate Change Programme funds interdisciplinary research to deepen understanding of the socio-economic impacts of climate change and the true costs of climate inaction. With up to €16 million in total funding under Horizon Europe (2026–2027), the programme supports evidence-based policymaking to strengthen climate ambition, resilience, and economic competitiveness in Europe and globally.

The Economics of Climate Change Programme is a Horizon Europe Research and Innovation Action designed to generate robust, policy-relevant evidence on how climate change and climate action affect economies, societies, and long-term resilience. The programme prioritises interdisciplinary, collaborative, and impact-oriented research that directly informs European and international climate strategies.

Programme Objectives

The programme aims to:

• Quantify the costs of climate inaction, including how impacts are distributed across regions and populations

• Assess socio-economic impacts of climate change across sectors and territories

• Evaluate co-benefits of climate action such as health, biodiversity, and ecosystem resilience

• Improve understanding of adaptation needs and long-term adaptation costs

• Enable more ambitious, evidence-based climate policies and investments

Why This Programme Matters

Climate change presents systemic risks to economies, security, and social cohesion. Existing assessment approaches are often fragmented, uncertain, and overly dependent on historical data that no longer reflects unprecedented climate dynamics. This programme strengthens economic evidence for climate decision-making, supports a fair transition to climate neutrality, enhances EU competitiveness and strategic autonomy, and ensures scientific findings directly inform policy frameworks.

Key Research Themes and Concepts

Socio-Economic Impacts of Climate Change

Research focuses on effects on economic performance, inequality, vulnerable populations, sectoral productivity, and regional development.

Costs of Inaction and Benefits of Action

Projects analyse long-term economic losses from delayed action, foregone co-benefits such as improved public health, and trade-offs across policy objectives.

Interdisciplinary Climate Economics

Funded research must integrate physical climate science, economics, and social sciences and humanities to deliver realistic, context-specific assessments.

Funding Structure and Timeline

• Total funding envelope: €16,000,000

• Maximum funding per project: €4,000,000

• Funding type: Research and Innovation Actions

• Framework: Horizon Europe Strategic Plan 2026–2027
  All funded projects are strongly encouraged to collaborate and participate in clustering activities with relevant initiatives within and beyond Horizon Europe.

Priority Research Areas

Applicants must choose one area.

Area A: Global

Projects are global in scale, provide regionally resolved insights, enable comparison across world regions, and foster international cooperation, particularly with low- and middle-income countries.

Area B: European Union

Projects focus on the EU, with emphasis on industrial performance, security of supply, economic security, and strategic autonomy.

Who Is Eligible to Apply?

Eligible applicants typically include universities, public research organisations, think tanks, and multidisciplinary consortia from EU Member States and associated countries. Proposals must demonstrate strong interdisciplinary collaboration, stakeholder engagement, and clear policy relevance.

How to Apply

1. Form a multidisciplinary consortium

2. Select Area A (Global) or Area B (EU)

3. Design a project addressing socio-economic climate impacts

4. Include co-design with stakeholders such as policymakers, public administrations, and industry

5. Align expected outcomes with Horizon Europe objectives

6. Submit the proposal through the official Horizon Europe funding portal

Expected Policy Impact

Project outputs are expected to support the Paris Agreement, European Climate Risk Assessments, the European Climate Adaptation Plan, the Preparedness Union Strategy, the Clean Industrial Deal, and global scientific assessments such as IPCC and IPBES, ensuring timely transfer of evidence into policy and practice.

Common Pitfalls to Avoid

• Narrow disciplinary focus without integration

• Weak or missing stakeholder co-design

• Insufficient regional or sectoral resolution

• Limited policy relevance or uptake pathways

• Poor handling of uncertainty and methodological limitations

Frequently Asked Questions

What is the main goal of the programme?
To improve understanding of the socio-economic impacts of climate change and drive more ambitious climate action.
How much funding is available per project?
Up to €4 million per project.
What is the total budget?
€16 million under Horizon Europe 2026–2027.
Is interdisciplinary research mandatory?
Yes, collaboration across climate science, economics, and social sciences is required.
Can projects focus outside the EU?
Yes, under Area A: Global, with regionally resolved insights and international cooperation.
Are projects required to collaborate with each other?
Collaboration and clustering activities are strongly encouraged.
How will research outputs be used?
To inform EU and global climate policies, assessments, and strategic frameworks.

Conclusion

The Economics of Climate Change Programme is a cornerstone of the EU’s strategy to align science, economics, and policy. By funding interdisciplinary, policy-relevant research, it strengthens climate ambition, economic resilience, and informed decision-making for a sustainable and competitive future.