This study analyzes how climate change affects the economy, society, and environment in South Korea. Then, the study explores the ways to strengthen capabilities that can alleviate climate change impacts. To find them, the study employs a system dynamics simulation method and builds a model with several sectors including the urban, rural, population, and social-environmental sectors. The study compares the size of climate change damages in rural and urban areas. The results with representative concentration path (RCP) 8.5 show that the size of climate change damage will continue to increase by 2050. The projected damages from the reduced industrial outputs in urban areas will be larger than that in rural areas. The results also show that the service sector will face stronger impacts from climate change than the manufacturing and agricultural sectors. However, the total size of damage in the rural areas will be bigger than that of the urban areas. It is because the size of reduced industrial outputs per capita in the rural areas is twice bigger than that of the urban areas. The climate change damage in the social and environmental sectors (including a loss of biodiversity and an increase in health costs) account for the largest part of the total damage. The study finally provides suggestions and policies that can improve the capabilities to reduce the climate change damages. One of the major suggestions of this study is that the increase in the climate change budget corresponding to the GDP growth can minimize the size of climate change impacts.