Assessment of investment in the adaptation of the economy to consequences of permafrost degradation in Russia

Abstract

This article is dedicated to the methodology of assessing the expected damage from permafrost degradation to fixed assets and its impact on the Russian economy. A forecast for the development of Russia’s economy until 2050 is presented with account for the consequences of permafrost degradation, including changes in the main macroeconomic indicators. Scenarios for adapting the economy to the consequences of degradation have been developed considering the variable cost of adaptation measures. It is shown that investments in adaptation measures in the amount of about 5% of the cost of the expected accumulated damage are effective in terms of risk reduction and maintaining macroeconomic dynamics in the long term (2023–2050).