With the impacts of climate change worsening, spending money on adaptation – including for the world’s most vulnerable – is a critical necessity. Even amid economic and political headwinds, there are steps that countries and institutions who recognise the urgency can take to close the significant adaptation finance gap. Making commitments and accelerating reform to unlock finance, address the cost of capital, and embed resilience in financial decision making, policies, and practices can pave the way to a collaborative global process for adaptation finance.

Adaptation finance is necessary to protect lives, livelihoods and societies. Adaptation and security are interconnected: investing in resilience reduces climate-related conflict and security risks. The economic case is also clear, with the world’s largest companies estimated to face $1.2 trillion in costs annually by the 2050s if no adaptation measures are taken. However, every dollar invested in adaptation and resilience generates more than $10 in benefits over ten years. Finance is particularly critical in those countries where climate impacts are felt most acutely, but which have the least capacity to invest in their resilience.

In this briefing, which complements a previous briefing that sets out a roadmap to advance resilience in 2025, we map the state of play in key types of finance for adaptation. We identify areas of potential progress in closing the adaptation finance gap in this crucial COP30 year. The Brazilian Presidency’s commitment to advancing the resilience agenda provides a potential forum to develop political and practical processes to deliver. Building momentum through the G20, multilateral development banks (MDBs) and the IMF is crucial in the meantime.

Finding political pathways through 2025 and beyond

Galvanising political and institutional action starts with stating the ambition. This year the Glasgow goal to double public adaptation is set to expire, and countries need to come together with a clear sense of direction on what comes next and how to push for increased ambition at COP30, in the Baku to Belém Roadmap process, and across the broader international financial system. As a number of major development banks revise their climate strategies, there is an opportunity to enhance targets to improve both the scale and the impact of adaptation finance.

The following areas offer the most potential for scale and success:

Getting public finance flowing. Action from countries who recognise the urgency to sustain a credible level of concessional public finance, and what role a new global goal – alongside strong progress on how finance is best deployed including through the Global Goal on Adaptation and Means of Implementation indicators agreed at COP30 – can play to meet adaptation needs.

Improving the quality of finance. Embedding qualitative principles including additionality and complementarity, protecting grants and highly concessional instruments, and making all finance sources more accessible to developing countries.

Leveraging MDBs and their ability to provide concessional or better than market rate financing. The G20 and board-level processes will be critical to achieving this.

Structural reform to tackle imbalances in the international financial architecture. Meaningful progress on addressing the debt crisis, and regulatory reform and de-risking to create opportunities to leverage more private finance for adaptation.

Laying the trackwork for new sources of financing. Leveraging private finance through de-risking, regulatory reform, and better data, while continuing development work to scope out how new global taxes could operate, and committing to use part of their proceeds for adaptation.

Read the full briefing here.

A more detailed roadmap of moments, processes and actors that have an important role to play in driving progress is set out in our previous briefing, Pathways Towards Resilience.