By Sharon Atieno
As the world gears up for the 29th Climate Change Conference of Parties (COP) in Baku, Azerbaijan, the United Nations Environment Programme (UNEP) is calling on countries to scale up urgent action against climate change starting with a commitment to boost adaptation financing.
According to the organization, global average temperature rise is approaching 1.5°C above pre-industrial levels, and the latest estimates from UNEP’s Emissions Gap Report put the world on course for a catastrophic rise of 2.6-3.1°C this century without immediate and major cuts to greenhouse gas emissions.
UNEP’s Adaptation Gap Report 2024: Come hell and high water, finds that nations must dramatically increase climate adaptation efforts to address rising climate impacts.
“Climate catastrophe is hammering health, widening inequalities, harming sustainable development, and rocking the foundations of peace,” UN Secretary-General António Guterres said in a video message. “The vulnerable are hardest hit. And taxpayers are footing the bill. While the purveyors of all this destruction – particularly the fossil fuel industry – reap massive profits and subsidies.”
“We need developed countries to double adaptation finance to at least $40 billion a year by 2025 – an important step to closing the finance gap. We need to unlock a new climate finance goal at COP29,” he added.
The report notes that though international public adaptation finance flows to developing countries increased from US$22 billion in 2021 to US$28 billion in 2022, this is still not enough.
The adaptation finance gap is estimated at US$187-359 billion per year. The report underscores that even if countries were to honour the Glasgow Climate Pact goal, of at least doubling adaptation finance to developing countries from about US$19 billion in 2019 by 2025, it would only reduce the gap by approximately five per cent.
“Climate change is already devastating communities across the world, particularly the most poor and vulnerable. Raging storms are flattening homes, wildfires are wiping out forests, and land degradation and drought are degrading landscapes,” said Inger Andersen, Executive Director of UNEP.
“People, their livelihoods and the nature upon which they depend are in real danger from the consequences of climate change. Without action, this is a preview of what our future holds and why there simply is no excuse for the world not to get serious about adaptation, now.”
According to the report, enabling factors, new approaches and financial instruments are key for unlocking adaptation finance for both the public and private sectors.
For the public sector, these enablers include the creation of funds and financing facilities, climate fiscal planning and climate budget tagging, mainstreaming in national development planning and medium-term expenditure frameworks, and adaptation investment planning.
The UNEP report notes that new approaches and financial instruments are also emerging that could increase adaptation financing. These include risk finance, insurance-linked instruments, performance-based grants, resilience credits and bonds, debt for adaptation swaps, and payments for ecosystem services.
The report finds that investment can be encouraged in the private sector through climate risk disclosure frameworks, transition planning, and adaptation taxonomies and by strengthening approaches and instruments that de-risk private-sector finance using public finance (blended finance). Adaptation accelerators and platforms can support these.
Additionally, the increase needed in finance flows for adaptation could be supported by reforms being proposed for international finance institutions and multilateral development banks.
According to the report, meeting the climate challenge will require greater volumes of adaptation finance and a more strategic investment approach.
It recommends that there should be a shift from adaptation financing that focuses on short-term, project-based and reactive action to more anticipatory, strategic and transformational adaptation.
“This requires more action in areas that are harder to finance. Treating adaptation like mitigation – i.e. focusing on technical options, or concentrating on the easiest-to-finance areas only – will not deliver the scale or types of adaptation needed,” the report cautions.
Further, it calls for the need to address the question of who pays for adaptation. In many financing models, the ultimate costs of adaptation are borne by developing countries; this may help bridge the finance gap, but it is not in line with the principle of common but differentiated responsibilities and respective capabilities, or with the polluter pays principle, the report notes.
The report observes that capacity-building and technology transfer are central to enhancing adaptation in developing countries, but changes to how they work are needed to accelerate adaptation actions on the ground.
It identifies several factors that diminish the effectiveness of the current technology transfer provided. Among the most prevalent are economic and financial constraints, such as high upfront investment costs, difficulties in obtaining loans, and legal and regulatory frameworks requiring more supportive domestic policies to foster the development and transfer of technologies and skills identified as important by developing countries.
“Interventions to support capacity-building should mobilize existing capacities, provide a balanced emphasis on hard (technologies) and soft (enabling conditions) capacities, and place gender equality and social inclusion considerations at their center,” the report says.
“A more robust evidence base to inform capacity-building interventions and technology transfer priorities is needed, including monitoring and evaluation. This includes evidence about capacity and technology needs, which approaches work for different affected groups, and their actual costs.”
Capacity-building and technology transfer plans should support adaptation across
sectors, scales and development priorities, and drive transformational change.
Current priorities are often too technical and focused on responding to international
commitments or immediate crises, which limits efforts toward deeper change.
Further, the report recommends that adaptation strategies should be developed based on a holistic understanding of the needs rather than from the perspective of pushing a particular technology, making them part of broader development strategies.
