As per the latest edition of Adaptation Gap Report, 2023 released by UN Environment Programme, developing countries, together, need at least USD 215 billion every year this decade to carry out meaningful adaptation work. In 2021, just about USD 21 billion went to developing countries for adaptation projects, which was down about 15% from the previous years.This year’s report focuses on adaptation finance, or the availability of money to carry out the adaptation projects.
Key Highlights of the Adaptation Gap Report, 2023
Adaptation Finance Gap
- The adaptation finance gap – the difference between estimated adaptation financing needs and costs and finance flows – has grown over the past.
- The adaptation gap is likely 10-18 times as great as current international adaptation finance flows — at least 50% higher than previous range estimates.
- The current adaptation finance gap is now estimated at USD 194-366 billion per year.
Gender Equality in Financing
- Of the international public finance for adaptation that is also tagged with gender equality as a principal objective, only 2% is assessed as gender-responsive, with a further 24% considered gender-specific or integrative.
Ways to Increase Financing
Private Financing
- Domestic expenditure and private finance are potentially important sources of adaptation finance where domestic budgets are likely to be a large source of funding for adaptation in many developing countries, ranging from 0.2 % to over 5 % of government budgets.
- There is also fragmented evidence of increasing private-sector adaptation interventions all over the world and in most sectors such as water, food and agriculture; transport and infrastructure; tourism.
Internal Investments
- ‘Internal Investments’ by large companies, financial institutions’ provision of finance for activities that contribute to adaptation, and companies ’provision of adaptation goods and services are much needed.
- Also the options of Corporate Social Responsibility can be explored in India for achieving climate financing and adaptation goals.
Reform of Global Financial Architecture
- Report calls for a reform of global financial architecture, to ensure greater and easier access to finance for climate-related purposes from multilateral agencies the World Bank or the International Monetary Fund (IMF) after it has become evident that current levels of international financial flows for fighting climate change are highly inadequate.