UNEP says adaptation finance gap widens as climate risks rise

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UNEP adaptation finance gap

Highlights

UNEP reports developing countries will need around $305 billion annually by 2035 for climate adaptation, potentially double when including private needs.
International public adaptation finance for 2024 is $28.2 billion to $31.7 billion, rising just $1 billion year-over-year, far below estimated needs after inflation.
Multilateral development banks and South-South flows climbed to $9.6 billion in 2024, but persistent underfunding and institutional barriers hinder timely adaptation implementation.

Funding needs outpace pledged support

As reported by UN News, the UN Environment Programme said in its 2026 Adaptation Gap Report, published on Wednesday, that international funding for climate adaptation remains far below what developing countries need to build resilience and cut risk.

The report says developing countries will require roughly $305 billion a year by 2035. UNEP adds that this estimate does not include the private sector's own adaptation needs, meaning the total requirement could be roughly twice as high.

International public adaptation finance flows reach $28.2 billion to $31.7 billion in 2024, just about $1 billion more than the previous year. UNEP says growth is flattening, and even if global support triples, annual funding of $85 billion to $120 billion would cover only 20% to 29% of estimated needs after inflation.

Inger Andersen, UNEP's executive director, says the world is not ready to adapt to current climatic conditions, let alone the impact of warming above 1.5°C. She says countries at COP31 in Antalya, Türkiye, and beyond must intensify efforts to meet the COP30 Global Mutirão goal of tripling adaptation finance by 2035 and go further to protect lives and economies.

Implementation barriers add to climate risks

The report says underfunding is only part of the problem, with institutional barriers continuing to slow delivery of adaptation measures. UNEP says stronger institutions and faster implementation are needed to protect vulnerable communities, build resilience and address rising climate-related losses and damage.

The financing debate comes ahead of COP31, which opens next week in Türkiye, and follows last year's agreement in Brazil to call for tripled annual adaptation support under the Global Mutirão framework. UNEP also says countries could still meet the earlier Glasgow Climate Pact target of doubling finance from 2019 levels to $40 billion by 2025.

Multilateral development banks likely increase their financing significantly last year, while South-South flows also rise, from $3.8 billion in 2019 to $9.6 billion in 2024. Even with that growth, UNEP says current funding remains far short of what is needed as climate risks and economic exposure continue to increase.

In our earlier article on Malaysia strengthening its fiscal buffers against global shocks, we outlined how recurring crises—ranging from geopolitical tensions to pandemics and climate shocks—are forcing governments to plan for higher, more persistent risk. The piece highlighted that rising operating spending and elevated borrowing costs can squeeze fiscal space, making reforms such as broadening the tax base and refining subsidies key to maintaining flexibility when crises hit.

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