Developing countries require hundreds of billions of dollars in investment every year to help them adapt to the rising threat of climate change.
Without this investment, more extreme floods, fires and hurricanes will place many more lives at risk and millions of people in the global south will be pushed into extreme poverty.
Yet, as it stands, there are major gaps in global adaptation finance.
In the new Adaptation Finance Gap Update, part of the UN Environment Programme (UNEP) Adaptation Gap Report 2023, we examine recent trends in adaptation funding.
Specifically, we focus on the flow of public adaptation funds from the governments of developed countries to developing countries, since the implementation of the Paris Agreement.
In this article, we identify three major gaps in adaptation finance and explain why these gaps have emerged even as nations commit to scaling up these funds.
Financial shortfall
Adaptation costs for developing countries are estimated at between $215bn and $387bn annually this decade, according to the latest Adaptation Finance Gap Update report.
Spending from the public funds of developed nations, while not the only source of adaptation finance, remains a crucial source, especially for low-income countries.
As it stands, people in the least developed countries (LDCs) and small-island states are often more exposed to climate hazards and more likely to be killed by climate-related disasters. This is despite the fact that these nations bear very little responsibility for causing climate change.
Under the Paris Agreement, developed countries agreed to achieve a balance in the amount of climate finance to adaptation and mitigation. However, far more funds have been channelled towards cutting emissions than preparing for climate impacts.
The commitments made by developed countries so far fall drastically short of the costs and needs expressed by developing countries.
Observed flows of public adaptation finance from these nations have been well below $30bn each year.
At the COP26 climate summit in Glasgow, developed countries pledged to double their adaptation finance contribution by 2025. However, as the chart below shows, progress towards this goal has fluctuated since the baseline year of 2019 (figures are not yet available for 2022 and 2023.)
In 2019, adaptation finance was estimated in our analysis at $19.2bn. To meet the commitment of doubling this amount by 2025, developed countries should aim to contribute at least $38.4bn per year toward developing countries.
However, a promising 31% increase in funding observed in 2020 was followed by a subsequent 15% decrease in 2021, complicating the path to achieving the target. It is noteworthy that while adaptation finance declined, finance for mitigation – that is, cutting emissions – continued to grow.
To reach the goal of doubling the finance, a consistent 16% average annual increase is required going forward.
Lack of local finance
Local organisations, people and communities are at the forefront of experiencing climate change impacts. Often, they are the most engaged and innovative in developing sustainable solutions to navigate these challenges.
Therefore, it is critical that these local entities are meaningfully involved in funded adaptation projects. However, there has been a lack of clarity on how much adaptation funding is intentionally directed to benefit local communities.
Our analysis provides comprehensive estimates of adaptation finance that mainly focuses on local communities, which cover both bilateral and multilateral sources.
Previous assessments have only covered dedicated climate funds such as the Green Climate Fund (GCF), the Adaptation Fund and the Global Environmental Facility (GEF). Despite their significance, these sources still only constitute a minor share – roughly 9% – of total public adaptation finance.
Our assessment reveals that less than 17% of total international public adaptation finance was allocated to projects with a specific focus on local communities.
Even though this represents an increase from a previous estimate of about 10%, it underscores a persistent and pressing need to increase financial support to local communities.
Struggling to reach the ground
Effective use of funds is essential to ensure that they serve their intended purpose, rather than inadvertently creating new challenges.
However, our research reveals that a significant portion of funding does not even reach its target.
Between 2017 to 2021, we estimate that only 66% of the allocated funds were successfully disbursed to their recipient countries. The remaining funds have not reached developing countries, for various reasons including project delays and lack of capacity.
In contrast, 98% of general development finance, covering other issues such as education and healthcare, was successfully disbursed within the same period.
This highlights the unique barriers in disbursing funds for adaptation projects. These include inadequate understanding of local markets during project planning, limited climate policy knowledge among decision-makers and bureaucratic delays in fund approval and disbursement.
The adaptation disbursement gap varies regionally. South Asia received merely 51% of allocated funds, whereas sub-Saharan Africa, home to most LDCs, had a higher disbursement ratio of 79%.
This discrepancy is likely due to sub-Saharan Africa receiving a higher amount of grants, which tend to have better disbursement ratios.
It is essential to note that these figures predominantly represent data from bilateral sources, meaning funding provided country-to-country.
Comprehensive data on disbursements from multilateral organisations, including the World Bank and other development banks, remains limited. This is significant as most (61%) international public adaptation finance for the global south comes from these sources.
Moving forward
Our analysis shows that adaptation finance goes beyond being a single aggregate number and requires alignment with local situations.
It also indicates that a collaborative approach involving both finance providers and recipients is required to identify and solve existing gaps.
Bridging these gaps could drive a shift towards climate justice, wherein vulnerable, developing countries are not excessively burdened by climate change. Conversely, neglecting them could exacerbate loss and damage in those countries.
Negotiations at the upcoming COP28 in the United Arab Emirates (UAE) present an opportunity for world leaders to establish measures to address these gaps.
The post Guest post: Three major gaps in climate-adaptation finance for developing countries appeared first on Carbon Brief.
Guest post: Three major gaps in climate-adaptation finance for developing countries
In the thick of the COP29 climate summit in Azerbaijan in 2024, the UN climate talks were rattled by what can only be described as a major PR disaster. The BBC, Reuters and The Guardian all carried headlines, attributed to leading climate policy experts, that the COPs were “no longer fit for purpose”.
The articles outlined a series of reforms called for in an open letter signed by 22 eminent scientists and politicians, including a former UN secretary-general and previous UN climate chief, with a further 150 lending their support. The headlines shook confidence in the COP process, just as governments were wrestling over a new climate finance goal.
The Club of Rome – which handled the media relations for the letter – hurried to say that its “constructive, supportive ideas” had been “misinterpreted”. Negotiators kept calm(ish) and carried on, in the end landing the finance goal after some high-stakes drama on the final day.
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To my surprise, when I went back this week to read the letter again, I could not find the offending line about the COPs not being fit for purpose. The Club of Rome has yet to respond to my query about its disappearance.
Whatever happened to the wording, that sentiment has been widely shared. COPs have ballooned in size while the importance of their outcomes seems to have diminished since the 2015 Paris Agreement (with the exception of the 2023 COP in Dubai where countries agreed to transition away from fossil fuels in energy systems).
The same on the surface
Two years on from those painful headlines in Baku, has anything changed for the better? You might be forgiven for thinking not. Official decisions are still made by consensus rather than the majority voting some have called for to stop blockers.
Tens of thousands of officials, activists and business execs still scurry around the halls to an ever-growing list of side events, roundtables and dialogues, while deals still come down to rows, all-nighters and jargon-filled texts adopted to rounds of applause.
But it would not be true to say that COPs have completely failed to respond to the very real need to translate the words of the Paris Agreement into action in the outside world.
Global warming is projected to be around 1.3C lower this century than it would have been if the world had not committed to tackle the climate crisis under that accord. Developing countries have a valued space at COPs in which their voices have equal weight in decision-making, unlike in many other international fora. And most importantly, perhaps, there has been a subtle shift, tipping the balance away from negotiating towards doing.
Brazil branded last year’s summit in Belém as the “COP of Implementation”, corralling the sprawling Action Agenda into six axes. This was a bid to impose some structure on the mushrooming efforts between governments, UN agencies, cities, businesses and civil society to set targets and spur faster results on their pet issues, from methane emissions to health and adaptation in conflict zones. COP30 alone saw the launch of 120 “plans to accelerate solutions”.
COP30 roadmaps off the cuff
Meanwhile, as the formal negotiations drew to a close, it was clear that consensus decision-making was evolving into something a little more improvised.
With only around half of all countries on board with the idea of a roadmap to transition away from fossil fuels, COP30 President André Corrêa do Lago announced his team would put one together over the coming year, along with another on how to meet a global goal to halt deforestation by 2030. Those roadmaps will be launched next week, presented and discussed at COP31, though it’s still unclear whether or how they’ll be incorporated into the formal negotiating agenda.
Some leading policy-makers don’t think that matters too much. Speaking to journalists before the Antalya summit, COP30 CEO Ana Toni and Dutch climate minister Stientje van Veldhoven said “coalitions of the willing” can move ahead without needing consensus from the COPs. This, they said, was evident this year at the first global conference on TAFF, co-chaired by van Veldhoven and attended by 60 countries.
“Consensus or no-consensus in the general COP doesn’t make a difference for the choices I have to make in my country to get my country to phase out fossil fuels,” said the Dutch minister. The Netherlands recently became one of the first to publish a national TAFF plan.
COP31 banks on flagship voluntary initiatives
This thinking has permeated the management and expected outcomes of this year’s COP too. Earlier this year, Türkiye, supported by international energy agencies, floated the idea of a voluntary goal to boost electrification to 35% of the world’s final energy consumption by 2035 – and this is now being touted as one of the main results to be expected from Antalya.
Türkiye is also championing a pledge on AI and climate, while co-host Australia is pushing to ease access to climate finance for least developed countries and small island states.
COP31 presidency announces AI pledge as UN climate chief says Big Tech ‘on thin ice’
None of these needs consensus. But with a political cover decision already in the works, as trailed by the COP presidents, they – and perhaps the fossil fuel roadmap – may find a home in the official text if language acceptable to most can be found, giving them them additional weight.
UNFCCC reform process in the shadows
Formal reform is underway too, if quietly. UN climate chief Simon Stiell is leading a review informed by ongoing consultations with a group of 15 well-respected climate policy experts, three of whom signed the open letter in 2024.
Among them is leading Swedish climate and sustainability scientist Johan Rockström who has strong ideas about how to make COPs function better, including a switch to majority voting. He told the same press briefing nothing stands in the way of this, because the rules of procedure for making decisions at COPs have never been formally agreed.
Still, to get away from the default setting of consensus would require agreement on a new system that may be impossible to achieve given the rise in bullying tactics by fossil fuel heavyweights.
Comment: The UN climate process was built for negotiation – now it must support implementation
The deliberations with the high-level policy gurus, as reflected in a summary of June’s session in Bonn, largely echo what’s already happening organically, calling for stronger partnerships and accountability both in and between the Action Agenda and negotiations. It doesn’t mention voting.
A general overview of the reform exercise says that “improving and optimizing the [UN climate] process over the medium to long term… will be critical to fostering trust, enhancing collaboration, and catalyzing increased ambition”.
In the short term, don’t hold your breath for anything concrete on reform at COP31 but watch for signs in what ends up dominating the headlines from Türkiye.
The post Editor’s Desk: COP reform is happening quietly, behind the headlines appeared first on Climate Home News.
Editor’s Desk: COP reform is happening quietly, behind the headlines
With the COP31 climate summit in Turkey looming, all eyes are on China to see what the country will push for in the negotiations.
At COP30 last year, China helped to secure a “dialogue” on climate-related “unilateral trade measures”, as well as a two-year “work programme” concerning climate finance.
The nation also championed south-south cooperation throughout the conference and co-led a summit on methane, alongside Brazil and the UK.
In a recent press conference, China’s environment vice-minister Li Gao noted the need to “uphold multilateralism” and send a “clear political signal” that the global community is united around climate action.