Climate change is already imposing significant economic costs on advanced economies, with extreme weather events disrupting supply chains, damaging infrastructure, and straining public finances. Adaptation spending is increasing but remains insufficient to ensure long-term resilience. There is a trade-off between allowing climate damages to occur, which reduces economic growth and shrinks the fiscal base, or investing public funds in adaptation measures that reduce future damages but increase immediate fiscal costs. This paper explores this trade-off and compares it with mitigation strategies, which, while incurring short-term transition costs, can help reduce long-term economic and financial risks. The results underscore the need for a balanced approach, integrating both adaptation and mitigation efforts, to ensure economic stability and sustainable public debt over the long run.