Climate change poses a significant threat to ecosystems and livelihoods in Egypt and Thailand, necessitating adaptation strategies, economic diversification, and the development of climate-smart policies to mitigate adverse impacts. The challenges in these regions include quantifying economic losses, projecting climate risks, and understanding the compounded effects on vulnerable sectors such as agriculture, health, education, water, and infrastructure. Developing countries, in particular, face difficulties in estimating both the economic and non-economic impacts of climate hazards, which complicates the formation of comprehensive financial protection strategies. In Thailand and Egypt, the impacts of climate change are intensified by the country’s vulnerability to drought, heatwaves, and floods. Climate-sensitive sectors, including agriculture and urban infrastructure, are particularly susceptible to these extreme weather events, while essential public services are further strained by growing demands and health vulnerabilities exacerbated by climate change.

The “Enhancing Risk Assessments (ERA) for Improved Country Risk Financing Strategies” project aims to address these challenges by equipping Egypt and Thailand with advanced tools to develop more robust climate adaptation and disaster risk financing strategies. This project designed a framework for building a comprehensive national-level system for assessing and managing climate-related risks by integrating economic, non-economic, and macroeconomic models to enhance decision-making for risk financing. At the core of the ERA project is the CLIMADA platform, which has been enhanced to assess a range of climate hazards and their monetary and non-monetary impacts. The ERA project builds on the Economics of Climate Adaptation (ECA) framework, a system that analyzes climate-related damages, calculates the cost-effectiveness of adaptation measures, and projects required investments. Through ERA, this framework has been expanded and integrated with the Dynamic General Equilibrium for Climate Resilient Economic Development (DGE-CRED) model, which simulates the effects of extreme weather on macroeconomic indicators such as GDP and employment. Additionally, the project has introduced a Graphical User Interface (GUI) called RISK WISE, designed to make the data accessible and actionable for policymakers, enabling them to visualize risk scenarios and explore adaptive strategies.

By integrating these models and user-friendly software program, ERA provides a comprehensive national-level assessment framework that incorporates both economic and non-economic dimensions of climate risk. The findings generated by ERA emphasize the necessity of early adaptation, as proactive investments in infrastructure, early warning systems, and nature-based solutions. Key adaptation strategies identified for Egypt include nature-based solutions like afforestation and flood reservoirs, as well as infrastructure improvements, urban greening, and the establishment of early warning systems. Through the adoption of these measures, along with targeted interventions for vulnerable sectors and populations, ERA fosters sustainable development and strengthens climate resilience in Egypt and Thailand. The project ultimately offers a structured pathway for governments to incorporate adaptation measures into policy, ensuring long-term economic stability and protection for vulnerable communities.