As COP30 is soon to occur in Belém, Brazil, the UNEP has released the 2025 Adaptation Gap Report: Running on Empty. The report finds that while adaptation planning and implementation are improving, adaptation finance needs in developing countries by 2035 are over US$310 billion per year – 12 times as much as current international public adaptation finance flows.
Every nation is facing climate impacts, be they heatwaves, wildfires, floods or desertification. Very sadly, as we speak, Jamaica is dealing with the impacts of the strongest hurricane ever to hit the country as Hurricane Melissa continues its path towards Cuba – with catastrophic flash flooding being reported.
As a result of these climate impacts, the poor and vulnerable are dying, suffering poor health and seeing their livelihoods damaged. Expensive infrastructure, from bridges to power grids, is under threat. The costs are large and growing, because strong action to reduce greenhouse gas emissions and limit global temperature rise is lacking.
Developed nations should be investing in their own adaptation and climate resilience and, crucially, they should be financially supporting those developing countries least responsible for the climate crisis to do the same.
Inger Andersen | Executive Director – United Nations Environment Programme
A worrying gap
The figure of US$310 billion needed to finance adaptation in developing countries per year by 2035 is based on modelled costs. When basing estimates on extrapolated needs expressed in Nationally Determined Contributions and National Adaptation Plans, this figure rises to US$365 billion. These numbers are based on 2023 values and not adjusted for inflation.
International public adaptation finance flows to developing countries were US$26 billion in 2023: down from US$28 billion the previous year. This leaves an adaptation finance gap of US$284-339 billion per year – 12 to 14 times as much as current flows. The previous AGR estimate was US$194-366 billion for the year 2030.
If current trends in financing do not turn around quickly, the Glasgow Climate Pact goal of doubling international public adaptation finance from 2019 levels to approximately US$40 billion by 2025 will not be achieved.
Planning and implementation on the rise
Some 172 countries have at least one national adaptation policy, strategy or plan in place; only four countries have not started developing a plan. However, 36 of the 172 countries possess instruments that are outdated or have not been updated in at least a decade. This should be addressed to minimize the possibility of maladaptation.
Public and private finance to step up
The New Collective Quantified Goal for climate finance, agreed at COP29, calls for developed nations to provide at least US$300 billion for climate action in developing countries per year by 2035. This is insufficient to close the finance gap, for two reasons.
First, if the past decade’s inflation rate is extended to 2035, the estimated adaptation finance needed by developing countries goes from US$310-365 billion per year in 2023 prices to US$440-520 billion per year. Second, the US$300 billion target is for both mitigation and adaptation, meaning that adaption would receive a lower share.
The Baku to Belém Roadmap to raise US$1.3 trillion by 2035 could make a huge difference – but care must be taken not to increase the vulnerabilities of developing nations. Grants, and concessional and non-debt-creating instruments, are essential to avoid increasing indebtedness, which would make it harder for vulnerable countries to invest in adaptation.
For the roadmap to work, the international community must contain the adaptation finance gap through mitigation and avoiding maladaptation, increase funding with the help of new providers and instruments, and engage more finance actors in integrating climate resilience into financial decision-making.
While the private sector must do more, the report estimates the realistic potential for private sector investment in national public adaptation priorities at US$50 billion per year. This compares to current private flows of around US$5 billion per year. Reaching US$50 billion would require targeted policy action and blended finance solutions, with concessionary public finance used to de-risk and scale-up private investment.