Climate Finance Fundamentals 3: Climate Finance Thematic Briefing - Adaption Finance

The costs of adaptation to climate change in developing countries are substantial. Developed countries have committed to scale up support for adaptation in developing countries, particularly in Least Developed Countries (LDCs) and Small Island Developing States (SIDS) with promises made to double adaptation finance between 2014 and 2020 under a roadmap presented for COP22 and followed by a pledge at COP26 to at least double their collective provision of adaptation finance from 2019 levels by 2025. The largest sources of approved funding for adaptation projects are currently the Green Climate Fund (GCF), the Least Developed Countries Fund (LDCF) administered by the Global Environmental Facility (GEF), the Adaptation Fund (AF) and the Pilot Program for Climate Resilience (PPCR) of the World Bank’s Climate Investment Funds (CIFs). However, developed countries’ contributions to these funds remain low compared to funds supporting mitigation; at a global level, adaptation remains underfunded. The GCF – set to devote 50% of its resources to adaptation, with half of that going to the SIDS, LDCs and African states (see CFF 11) – is the largest provider of adaptation finance with USD 3.43 billion for 104 projects. In 2023, the GCF approved the most new adaptation funding with USD 1.02 billion for 19 new projects. The amount of cumulative finance approved for adaptation from key climate funds tracked by Climate Funds Update (CFU) grew to USD 8.2 billion in 2023. Directing adaptation funding to countries most vulnerable to the impacts of climate change as well as to the most vulnerable people and population groups within recipient countries in a genderresponsive and equitable manner remains an imperative, with grant financing continuing to play a major role.