Climate adaptation finance gap widens by 50%, says UN report

The finance gap to fund climate adaptation in low-income countries is at least 50% bigger than previously thought, a new report from the United Nations Environment Programme, or UNEP, has found. According to the report, the gap — the difference between the adaptation needs of low-income countries and the finance currently available — has grown by hundreds of billions of dollars compared to previous assessments. While the adaptation finance gap was estimated to be in a range of $140 billion to $300 billion per year in 2016, it now stands between $215 billion and $387 billion per year, the report states. Speaking at a virtual press conference to launch the report, Inger Andersen, UNEP’s executive director, told journalists that the international community must find ways to plug the gap urgently to avoid paying a higher price in the future. “In a sense, the world is sleeping on adaptation even when the wake-up call that nature has been sending us is becoming ever more shrill,” she said. “This year we saw temperature records again being broken — again. We saw more floods, more heatwaves, more droughts, more wildfires pour misery upon very vulnerable communities. The international community should be throwing billions of dollars at helping developing nations to adapt to these impacts, but it isn’t,” she added. The annual report, which was written by 54 co-authors and went through two rounds of external expert review, states that estimated adaptation costs for low-income countries have grown significantly compared to previous assessments. According to its authors, this increase is due to lower-income countries becoming more comprehensive in their plans to address adaptation — the process of a country adapting to a new climate and preventing its heightened risks — and recent scientific studies estimating higher impacts from climate change. “And of course, higher impacts mean we have to do more adaptation,” said Paul Watkiss, one of the report authors. At the same time, public adaptation finance flows to lower-income countries from international climate funds — including the Adaptation Fund, Green Climate Fund, and the Global Environment Facility’s Least Developed Countries Fund and Special Climate Change Fund — have decreased by 15% between 2020 and 2021, from $25.2 billion to $21.3 billion. World leaders from high-income countries pledged to deliver around $40 billion per year in adaptation finance support by 2025 at the climate conference COP 26 in Glasgow in 2021. But the current dip represents a worrying precedent, and Andersen said reaching the target seemed unlikely. At the same time, the report says that progress in adaptation in lower-income countries was plateauing, with the number of new adaptation projects funded through the climate funds failing to increase in 2022. Anderson noted that filling the adaptation finance gap made “business sense” for higher-income countries. This sentiment was echoed in the report, which outlined that the two ways to reduce climate risks in the future are mitigation — which amounts to reducing greenhouse gas emissions — and adaptation. Failure to reduce risks in either way would result in heftier damages, emergency responses, and rebuilding efforts, which should be addressed by the forthcoming loss and damage fund — agreed upon by world leaders at COP 27 in Sharm el-Sheikh, Egypt, in 2022, and which is still under debate. According to the report, the world’s 55 most climate-vulnerable economies alone had already experienced losses and damages of more than $500 billion in the last two decades, adding that the figure would rise steeply as climate impacts worsen. “Failure to invest now will come back to haunt wealthy nations as they will be asked to face up to their responsibility for growing losses and damages,” said Andersen. The report suggested new approaches to fund the gap, such as remittances, reform of the global financial architecture — as proposed by the Bridgetown Initiative — and implementation of article 2.1C of the Paris Agreement, which requires making finance flows consistent with a pathway toward low-carbon and climate-resilient development. It comes just weeks before the COP 28 climate talks, which kick off in Dubai on Nov. 30, and at the press conference speakers called for the event to deliver “new momentum” on adaptation. “As we approach COP 28, let us remember that we are at an inflection point,” said Loretta Hieber Girardet, the chief of risk knowledge, monitoring, and capacity development at the United Nations Office for Disaster Risk Reduction. “We still have the opportunity to redirect our current destructive course. And we must double our efforts and seize this opportunity together.”