New report updates the finance gap on climate adaptation
The updated costs of adaptation for developing countries are estimated to be in a range of USD215 billion (CAD296 billion) to USD387 billion (CAD533 billion) per year this decade. These estimated needs are 10 to 18 times greater than the amount of international public finance currently available.
Research supported by the Climate Adaptation and Resilience (CLARE) initiative contributed to the report’s fourth chapter where these numbers are presented. The researchers drew on two lines of evidence to revise the estimates: costing models for adaptation and an analysis of the climate action plans communicated in nationally determined contributions (NDCs) under the Paris Agreement on climate change.
The researchers also share in Chapter 4 new findings on how NDCs plan to address gender equality and social inclusion. Only one in five national climate plans contain costed activities that seek to address the gender and social inequalities related to adaptation, allocating just over 2% of overall costs to these priorities.
The adaptation finance gap remains critical. Without sufficient investment, countries will face even more costly losses and damages due to the impacts of a changing climate. The report identifies different approaches to bridging the finance gap, including by mobilizing private investment and bringing companies and impact investors together to raise funds and identify adaptation solutions.
A case study linked to the flagship UNEP report features the work of IDRC research partners in unlocking private financing by identifying investor-ready projects led by small and medium enterprises in sub-Saharan Africa. The pilot generated CAD2.7 million in financing.