Delivering on adaptation finance goals: six recommendations for closing the gap

Climate adaptation finance remains far below what is needed. This working paper sets out six recommendations to improve the quality of climate finance and help close the gap between current flows and estimated needs. 

It assesses progress against key global goals, including the Global Goal on Adaptation and the New Collective Quantified Goal on Climate Finance, and highlights key constraints such as limited private finance, weak enabling environments and ongoing tracking challenges. The paper calls for more effective mobilisation of public and private finance, including through blended finance and a stronger focus on adaptation outcomes.

Despite increasing ambition, there is still an “unacceptably large financial gap” between current flows and actual needs. While total climate finance reached around $1.9 trillion in 2023, only 5% was directed to adaptation and resilience. Developing countries face a significant shortfall, with an estimated $157 billion annual gap and projected needs of $310–365 billion per year by 2035 – at least 12 times current international public finance flows.

The working paper presents six key messages:

• Strategic use of public finance is essential to scale adaptation.
• Stronger enabling environments are needed to unlock adaptation finance.
• Private finance has a role, but its potential is constrained and uneven.
• Blended finance approaches are needed to leverage private investment.
• Tracking methodologies must be improved to understand and scale finance flows.
• Greater recognition of adaptation-related business opportunities can drive investment.
• A stronger focus on adaptation outcomes and benefits is required.