In 2023, climate change yet again grew more disruptive and deadly. Temperature records toppled, globally and regionally. Storms, floods, heatwaves and wildfires caused devastation. These intensifying impacts implies two things: the world must urgently cut greenhouse gas emissions and it must increase adaptation efforts to protect vulnerable populations.
This report finds that progress on adaptation is slowing across all three areas annually assessed – finance, planning and implementation – when it should be rapidly accelerating. Based on a detailed update, the adaptation finance gap now stands at $194–366 billion per year, with adaptation finance needs in developing countries likely to be 10–18 times as great as finance flows – over 50% higher than the previous range estimate.
The report identifies seven ways to increase financing, including through domestic expenditure and international and private sector finance. Additional avenues include remittances, increasing and tailoring finance to small and medium-sized enterprises and a reform of the global financial architecture. The new Loss and Damage fund will also need to move towards more innovative financing mechanisms to reach the necessary scale of investment.