Climate adaptation is starved of funds as risks multiply fast

On October 29, UN Environment Programme released Adaptation Gap Report-2025 with a caption ‘Running on Empty’. As the caption itself denotes, the World is gearing up for climate resilience, without the money to get there.

This situation is at a time the world over climate change is actually happening and temperature level is also increasing substantially and climate incidents like heat waves, warming, wildfires, floods, desertification and the subsequent loss and the costs and funds required for coming out or rehabilitation, recovery from such massive losses are becoming a bid burden on vulnerable countries.

While one side we see repetition of such massive climate change incidents, other side, the other side the seriousness with which the action to cut greenhouse gas emissions are lagging behind and that will further enhance the incidents of climate change, and these impacts are getting intensified and harming more people particularly the vulnerable and poor.

With such adverse impacts are happening, without having enough means to take mitigation measures, the consequence of economic damage will be higher, leading such countries to pathetic condition.

According to Inger Anderson, Executive Director, United Nations Environment Programme, “Developed nations knows this. They also know they should be financially supporting developing countries, which are least responsible for the climate crisis.”

Inspite of such developing countries and vulnerable countries and less and low developed countries raising their demand for developed countries to contribute more of aid and not of debt, the agreed level of such contribution has been much below expectations as the same is enshrined in the Paris Agreement and subsequently, the Glasgow Climate Pact which called the developed countries to finance adaptation in developing countries to the tune of $40 billion per year by 2025.

In the last COP 29, against the expectation and demand by developing countries to the extent of $1.3 trillion dollar per year by 2035, the new collective quantified goal for climate finance (NCQG) called for at least $300 billion to finance both adaption and mitigation per year by 2035.

This amount arrived at the last COP-29 led to much disappointment amongst such developing and vulnerable countries. The current UNEP’s Adaptation Gap Report-2025 voices the concern and reiterate that this finance is not coming. According to the report, the estimated adaptation finance needs of developing countries range from $310 billion to $365 billion per year by 2035. As per the report, international public adaptation finance flows from Developed nations to developing countries fell from $28 billion in 2022 to $26 billion in 2023. However the latest numbers are not available.

It is therefore clear that unless adequate finance is made available, even though most of countries are having adaptation plans, they are unable to implement them in the absence of adequate finance. According to the report, the adaptation finance needs of developing countries by 2035 atleast 12 times as much as current international public adaptation finance flows.

Other findings that if the current trends continue, the earlier goal of Glasgow Climate Pact of doubling 2019 adaptation finance flows by 2025 to approximately $4O billion will be missed. As stated earlier, the NCQG goal of climate finance is much insufficient to meet Developing countries adaptation finance needs in 2035.

The report states that there is progress in adaptation planning which is critical to minimise and address current and future climate risks effectively, but it is limited and patchy. A total of 172 our of 192 countries worldwide have a national adaptation plan, strategy or policy in place.

Out of the 25 that don’t, only four have not started developing one. However, 36 countries possess plans that are outdated or have not been updated for a decade.

These issues are to be addressed immediately and adequate adaptation and mitigation measures which are to be taken seriously with full support from developed countries as that only can reduce the climate change risks and atleast minimize the loss and damages these vulnerable countries suffer.

Here the most positive news as per report is that the adaption finance gaps is lower for LDCs and SIDs, though the levels still far below the needs of these most vulnerable countries.

The report talks that the NCQG is insufficient to meet adaptation finance needs. In COP 29, the agreed finance at least $300 billion per year by 2035 which is insufficient due to two reasons.

First the NCQG is not adjusted to inflation and if it is adjusted with future inflation of at least 3 per cent, the requirement of adaptation finance needs of $310-$365 billion per year, these would increase these needs to $440-520 billion annually by the year 2035.

Second, the NCQG covers both mitigation and adaptation as no sub-target for adaptation has been agreed during UNFCCC negotiations.

The AGR Report-2025 has examined under maximum and minimum possible scenarios of level of adaptation finance in 2035 and has arrived at a conclusion that the current available finance is not sufficient and the adaption finance gaps cannot be closed with international finance alone.

There has been demand that private sector finance can help to fill the gap, though the overall contribution is likely to be modest.

The current private sector flows are low with tracked levels at $5 billion per year, even reaching this level will require targetted policy action against this AGR Report 2025 estimated that the private sector could deliver approximately 15-20 per cent of the total national adaptation funding needs $50 billion/year of the $310-365 billion per year by 2035 as currently around three quarters are typically funded by the public sector.

Innovative instruments can increase private sector financial investment, but they will not likely to bridge the funding gap.

The question is COP-30, which is being held during November 10-21 in Belem Brazil will help in bridging this gap and Report 2025 states that the Baku to Belem roadmap to 1.3T must guide bridging the adaption finance gaps fairly and without enhancing the vulnerabilities of developing nations.

Primarily all these vulnerable countries must have adequate finance allocation within their budget, enhancing capabilities and access to resources, addressing unequal power dynamics and ensuring adaptation locally led.

Second, there must be increasing the volume of adaptation finance with the help of new providers and instruments. Third, by engaging more finance actors in integrating climate resilience into financial decision making.

In conclusion the Report states that to achieve the objectives of the global goal on adaptation, both public and private sector actors need to step up financial support in line with the Baku to Belem Roadmap. In the current global uncertainties and pressure on finance due to low economic growth as well due to competing priorities, the making adequate finance allocation for mitigation and adaptation must not suffer as the current and futuristic climate risks are very visible and the smart and essential choice is to invest adequately in adaptation now- to minimise the loss of life, to soften and at least reduce damage to physical infrastructure as it is urgent and imperative to protect economies from the stronger and substantial climate impacts that are already happening and likely to happen more.

No nation can overlook these climate risks and there must be serious and urgent necessity to implement adaptation plans. We trust that the upcoming COP-30 will dwell on these critical issues and find solutions to them.