Ongoing cuts by rich nations to foreign aid are threatening their pledge to double finance by the end of this year to help developing countries adapt to climate change, a new report has warned.

Adaptation finance provided by developed countries is expected to decrease as a result of reductions in overseas development spending and may only reach $26 billion in 2025, according to projections by NGOs Oxfam and the CARE Climate Justice Centre.

That would be far short of the estimated $40 billion needed to honour the promise developed countries made four years ago at COP26 in Glasgow to double their adaptation finance from 2019 levels.

Even if achieved, the goal represents a small fraction of the estimated $215 billion-$387 billion a year that developing nations need to become more resilient in a warming world.

International adaptation funding needs to grow sixfold to $12 billion a year for small island developing states (SIDS), which face an existential threat from rising seas, according to a separate report by the Global Center on Adaptation (GCA) out this week.

Foreign aid slashed

Resilience-boosting interventions in poorer countries have historically relied to a large extent on foreign aid, which is now shrinking as wealthy donors redirect cash to other areas, such as defence. Most notably, the Trump administration has dismantled the US Agency for International Development (USAID) – but other wealthy donors, including Germany and France, have also slashed aid spending in 2025.

Overall, overseas development aid (ODA) is expected to decline by between 9% and 17% in 2025, on top of a 9% drop in 2024, according to the Organisation for Economic Co-operation and Development (OECD).

John Norbo, a senior climate advisor at CARE Denmark, said aid cuts in wealthy countries leave “the poorest to pay the price, sometimes with their lives”.

“Rich countries are failing on climate finance and they have nothing like a plan to live up to their commitments to increase support,” he added. “COP30 must deliver justice, not another round of empty promises.”

Brazil’s COP30 presidency has promised that adaptation will be a “central theme” of the summit.

Governments are expected to agree on a list of around 100 indicators to track resilience to climate change as part of the Global Goal on Adaptation, while also being encouraged – along with the private sector – to help fund measures in National Adaptation Plans – whether rural water management, resilient health systems, or city heat assessments.

“We are expecting – and stand ready – to support all countries that are willing to use COP30 as a platform to show their leadership on adaptation finance, on adaptation planning, on adaptation delivery,” Alice de Moraes Amorim Vogas, programme director for the COP30 presidency, told a recent event at Climate Week in New York.

But it is still unclear whether governments will agree at COP30 on any new dedicated financial target to replace the expiring one. The world’s poorest nations – represented in the climate negotiations by the Least Developed Countries (LDCs) group – are calling for a fresh commitment to triple adaptation finance by 2030 on 2022 levels.

Loans for adaptation add to debt burdens

The research by Oxfam and CARE also found that a significant share of climate finance – including for adaptation – is still provided as loans that, the campaigning groups say, burden developing countries with debt for a crisis that they did not cause.

For the 2021-2022 period, loans made up on average 41% of adaptation finance provided directly by wealthy governments and around three-quarters of adaptation funding disbursed by multilateral institutions such as development banks, the report found.

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The NGOs estimated that developing countries will have to pay back between 30% and 50% more of the money they were lent in 2022 for adaptation programmes as a result of interest repayments.

For Oxfam’s climate policy lead Nafkote Dabi, this represents a form of “crisis profiteering”. “Rich countries are treating the climate crisis as a business opportunity, not a moral obligation,” she said.

‘Running out of time’

France, Japan, Italy and Spain provided most of their climate finance over the 2021-2022 period as loans or other non-grant instruments such as equity. On the other hand, grants made up all, or nearly all, of climate finance contributions made by Denmark, the Netherlands, Switzerland and Australia, the report found.

For small island states, which also receive nearly half of their adaptation money as loans, a relatively modest uptick in funding support can go a long way in shielding them from escalating climate impacts, the GCA report found. The estimated $12 billion in annual climate finance needed is a large sum for SIDS, but represents only 1.2% of all global climate finance flows, it added.

“We face rising seas, threats to food and water security, and we are running out of time,” Hilda Heine, president of the Marshall Islands, said in a statement. “Adaptation remains our most urgent priority. It is our first line of defence.”

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Foreign aid cuts put adaptation finance pledge at risk, NGOs warn