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This paper is the first to highlight macro-critical climate adaptation challenges for the ME&CA region. Leveraging a newly assembled comprehensive data base on climate and macro-financial indicators, the paper derives novel climate risk profiles and empirical evidence to underpin its central message: adapting to climate change—by boosting resilience to innate climate stresses—is a critical priority for ME&CA economies.

Key findings from the study indicate that ME&CA countries are already feeling the brunt of climate change. Analysis of data spanning the past century reveals that the region’s three main climate stresses have further intensified since the 1990s: (1) temperatures have risen by 1.5° C, twice the global increase of 0.7° C; (2) precipitation, already sparse, has become more erratic than in any other region; and (3) climate disasters, such as droughts and floods, have occurred more often than in the past.