UNEP: Climate Finance Shortfall Puts Billions in Peril
From Baku to Belém, A $1.3 Trillion Climate Test Looms
Nairobi: Rising seas swallowing coastlines, deadly heatwaves crippling cities, and storms wiping out harvests are no longer future threats but present realities for millions across the developing world. Yet, as the planet warms and these impacts intensify, a widening chasm in climate adaptation finance is leaving vulnerable nations dangerously exposed — threatening lives, livelihoods, and entire economies, warns the United Nations Environment Programme’s Adaptation Gap Report 2025: Running on Empty.
Released ahead of the thirtieth Conference of the Parties (COP30) in Belém, Brazil, the report warns that adaptation finance needs of developing countries will soar to over US$310 billion per year by 2035, or as high as US$365 billion when based on countries’ stated needs in their Nationally Determined Contributions and National Adaptation Plans. These estimates, expressed in 2023 prices, are twelve to fourteen times current international public adaptation flows — which fell to US$26 billion in 2023, down from US$28 billion the previous year. On current trends, the Glasgow Climate Pact goal of doubling adaptation finance to roughly US$40 billion by 2025 will be missed.
United Nations Secretary-General António Guterres called the findings “a red alert.” “Climate impacts are accelerating,” he said. “Yet adaptation finance is not keeping pace, leaving the world’s most vulnerable exposed to rising seas, deadly storms, and searing heat. Adaptation is not a cost — it is a lifeline. Closing the adaptation gap is how we protect lives, deliver climate justice, and build a safer, more sustainable world.” He urged COP30 to deliver a global plan ensuring developing nations have the means to safeguard people, food, and water security and to build resilience across all sectors.
UN Environment Programme (UNEP) Executive Director Inger Andersen echoed the warning, noting that “every person on this planet is living with the impacts of climate change — wildfires, heatwaves, desertification, floods, rising costs and more.” She said that as mitigation continues to lag, these impacts will worsen, damaging infrastructure, economies and health systems. “We need a global push to increase adaptation finance from both public and private sources, without adding to the debt burdens of vulnerable nations. If we do not invest in adaptation now, we will face escalating costs every year.”
According to the report, the adaptation finance gap now stands between US$284 billion and US$339 billion annually, compared to US$194–366 billion estimated for 2030 in the previous edition. Support through key international mechanisms — including the Adaptation Fund, Global Environment Facility, and Green Climate Fund — reached nearly US$920 million in 2024, an 86 per cent increase over the previous five-year average, though UNEP cautions this may be a temporary spike amid tightening budgets.
Progress in planning continues, with 172 countries now possessing at least one national adaptation policy or strategy. Only four have yet to start developing a plan, but thirty-six countries have outdated instruments more than a decade old, heightening the risk of maladaptation. Countries reported over 1,600 implemented actions — mainly in biodiversity, agriculture, water, and infrastructure — in their Biennial Transparency Reports under the Paris Agreement, though few measure actual outcomes or effectiveness.
The Adaptation Gap Report 2025 stresses that new global finance commitments must be significantly scaled up. The New Collective Quantified Goal adopted at COP29 requires developed countries to mobilise at least US$300 billion annually for climate action in developing countries by 2035 — but this sum covers both mitigation and adaptation. Factoring in inflation, adaptation needs could rise to US$440–520 billion per year in 2035, meaning even that goal would fall short.
The Baku-to-Belém Roadmap, designed to raise US$1.3 trillion by 2035, could narrow the gap if grants and concessional, non-debt-creating instruments are prioritised to prevent further indebtedness. To make the roadmap effective, the report urges the global community to limit the gap through stronger mitigation, avoid maladaptation, expand funding sources and instruments, and embed climate resilience into all financial decision-making.
While public funds remain essential, UNEP identifies a realistic potential for private investment in national adaptation priorities of US$50 billion a year, up from the current US$5 billion. Achieving that tenfold increase will require targeted policy incentives and blended-finance mechanisms using public funds to de-risk private participation.
Andersen pointed to new innovations such as Brazil’s upcoming Tropical Forest Forever Facility, to be launched at COP30, which will channel public, private, and philanthropic funds to over seventy developing nations for tropical-forest protection and restoration — potentially one of the largest multilateral funds ever established.
The report’s release coincides with the aftermath of Hurricane Melissa, which has just devastated Jamaica and is now bearing down on Cuba — a stark reminder of what is at stake. “As we speak, Jamaica is dealing with catastrophic flash flooding from the strongest hurricane ever to hit the country,” Andersen said. “The poor and vulnerable are dying, suffering ill health, and seeing their livelihoods destroyed. The costs are rising because the world has failed to reduce greenhouse gas emissions.”
Both UNEP leaders stressed that investing in adaptation is the most rational economic choice. “Even amid tight budgets and competing priorities,” Andersen concluded, “the smart choice is to invest in adaptation now — to minimise loss of life, reduce damage to infrastructure and protect economies. It is pay now, or pay far more later.”
– global bihari bureau
