International Review of Environmental and Resource Economics, 2011, 5: 245–284 Adapting to Climate Change: Costs, Benefits, and Modelling Approaches Shardul Agrawala 4 , Francesco Bosello 1,3,5,∗ , Carlo Carraro 1,2,3 , Enrica de Cian 1 and Elisa Lanzi 4 1 Fondazione Eni Enrico Mattei, Venice, Italy; 2 University of Venice; 3 CMCC; 4 OECD; 5 University of Milan; ∗ francesco.bosello@feem.it. ABSTRACT This paper provides a summary and a critical survey of the method- ologies and results of the literature on the economics of adaptation. We divide the literature into two broad areas of research. First, we examine the studies that analyse adaptation from a bottom-up per- spective. Second, we introduce the studies that examine adaptation using a top-down approach. The first group of studies investigates cost and benefits of adaptation at the sectoral, regional and global level. The second group includes theoretical literature on the relation- ship between mitigation and adaptation as well as emerging insights from some global Integrated Assessment Models (IAMs), which have recently been extended to include adaptation as an alternative and complementary policy option to mitigation. This latter development has raised issues that represent new chal- lenges for the research community. In particular, understanding how to integrate the vast amount of information provided by the bottom- up literature on climate change impacts and adaptation into global ISSN 1932-1465; DOI 10.1561/101.00000043 c  2011 S. Agrawala et al.