Scaling up finance and investment for climate change adaptation

Global finance for adaptation remains well below what is needed to address the impacts of climate change. This paper presents recent evidence on the finance and investment gap and provides an overview of key policies to align investment flows with climate adaptation goals. Developing detailed funding strategies for National Adaptation Plans, mainstreaming adaptation considerations into public budgeting, and improving policy coherence are integral to creating an enabling environment for investment. Enhancing transparency in financial disclosures, aligning private and public incentives, and expanding risk transfer mechanisms are essential to promote sustainable financial markets. Scaling up adaptation finance in developing countries, which are especially vulnerable to climate change, requires better strategic use of international public finance. Key actions to help scale up adaptation finance include: assessing the consistency of international providers’ spending plans with climate finance goals; supporting countries’ efforts to strengthen their enabling environments; improving development practices and systems; leveraging public and blended finance to mobilise private investment; and exploring innovative financing sources.