Finance gap for adaptation efforts at least 50% bigger than thought, says the report released on Thursday
Adaptation finance needs are 50% higher than previously estimated–this was one of the main findings of the Adaptation Gap report 2023, released on Thursday. The report found that these needs were 10-18 times as great as the global public adaptation finance flows. Another worrying finding was that globally, the progress on adaptation was slowing down, instead of accelerating, which is the need of the hour.
The United Nations Environment Programme (UNEP) report, titled Adaptation Gap Report 2023: Underfinanced. Underprepared – Inadequate investment and planning on climate adaptation leaves world exposed, was released ahead of the annual UN climate meet, COP28, to be held in Dubai at the end of November.
The updated cost of climate adaptation
According to the report, the cost of adapting to climate change is not much higher than previous estimates. It estimated the cost to now be between $215 billion to $387 billion per year this decade, which is projected to rise significantly by 2050.
The report found that public multilateral and bilateral adaptation finance flows to poorer, developing nations decreased by 15% to around $21 billion in 2021. This slowing down is concerning because of pledges made at COP26 in Glasgow to double adaptation finance support to $40 billion per year by 2025. The report estimated the current adaptation finance gap to be around $194-366 billion per year.
“The widening gap in adaptation finance is a stark indicator of years of neglect, leaving countless vulnerable people exposed to escalating climate calamities. Instead of providing finance to developing countries, affluent nations have exacerbated the climate crisis with their persistent investments in fossil fuels,” said Harjeet Singh, head of global political strategy at Climate Action Network International.
Stagnation of adaptation actions
The report found that while there is some progress—five out of six countries have at least one national adaptation planning instrument—it is not moving fast enough. Adaptation actions supported by international climate funds have all but stagnated, the report stated—possibly because of COVID-19 and the Ukraine war.
“Even if the international community were to stop emitting all greenhouse gases today, climate disruption would take decades to dissipate. So I urge policymakers to take heed of the Adaptation Gap Report, step up finance and make COP28 the moment that the world committed fully to insulating low-income countries and disadvantaged groups from damaging climate impacts,” said Inger Andersen, Executive Director of UNEP.
Loss and damage on the rise
With adaptation and mitigation actions slowing down, the cost of loss and damages caused by climate change is rising exponentially. A recent study found 55 of the most climate-vulnerable economies alone have already experienced losses and damages of more than $500 billion in the past two decades. The adaptation gap report pins its hopes on the new loss and damage fund, but warns that the fund will need to invent more innovative financing mechanisms in order to meet the scale of investment needed.
The way forward
The report cited studies that indicate every billion invested in adaptation against coastal flooding leads to a $14 billion reduction in economic damages. Meanwhile, $16 billion per year invested in agriculture would prevent approximately 78 million people from starving or chronic hunger because of climate impacts.
Doubling 2019 international finance flows to developing countries by 2025 or a New Collective Quantified Goal for 2030 are not enough to close the adaptation gap, the report stated. It identified seven ways to increase financing and close this gap, including through domestic expenditure, and international and private sector finance. Remittances, increasing funding to Small and Medium Enterprises, and shifting finance flows towards low-carbon and climate-resilient development pathways [Article 2.1(c) of the Paris Agreement] and reforming global financial architecture as proposed by the Bridgetown Initiative.