Climate adaptation finance crisis
The gap between the adaptation finance needs of developing countries and international funding for climate change risks is pushing the world toward an economic and humanitarian crisis.
The ‘Adaptation Gap Report 2025’ from the United Nations Environment Programme (UNEP) reveals that developing countries require $310 billion to $365 billion annually for adaptation finance, but only receive $26 billion from international public funds. This means that these countries need adaptation finance 12 to 14 times more than the current inflow.
This huge financial gap is putting the lives, livelihoods and entire economies of climate-vulnerable countries at serious risk. The Glasgow Climate Agreement aimed to double international public adaptation finance by 2025, but it likely won’t be met if current trends persist.
Instead, international flows have fallen slightly in the past year, deepening the crisis. Developing countries are increasingly taking on debt to cover domestic deficits or canceling vital projects like coastal dams and water-resilient agriculture.
The report says that if this deficit continues, the gap could widen further by 2030. To address this situation, the international community needs to take urgent action in three areas:
- To curb the deficit, we must quickly reduce carbon emissions to combat climate change and rising adaptation costs.
- Increase financing by seeking support from new sources, like multinational banks and the private sector, rather than just traditional donor countries.
- Attracting private investment in adaptation projects can be achieved through policy support and blended finance, potentially securing an additional $50 billion in annual funding.
The report warns against increasing the share of debt instruments in climate finance for developing countries, as this would increase their financial vulnerability. Instead, the emphasis should be on grant-based and highly concessional financing.
This global financing gap shows we need a structural shift to prioritize both climate change mitigation and adaptation equally.
