In 2023, the wake-up call on climate change became an ear-splitting din that echoed around the world. Temperature records toppled, globally and regionally, while floods, heatwaves and wildfires caused misery and economic damage as vulnerable communities suffered these blows without any shield to deflect them.
The international community should be responding to this call with hundreds of billions of dollars, to help developing nations adapt to climate change, in addition to slashing greenhouse gas emissions. Instead, wealthy nations are still hitting the snooze button, a decision that will come back to haunt them as the losses and damages they must take responsibility for rise.
This sluggish response means that the difference between the climate adaptation finance needs of developing countries and international public finance flows is growing when it should be shrinking. According to the 2023 Adaptation Gap Report published by the UN Environment Programme (UNEP), where I serve as executive director, needs are now 10-18 times as great as current flows — more than 50 percent higher than previous estimates.
In dollar terms, the modeled costs of adaptation measures in developing countries are estimated at $215 billion per year this decade. Meanwhile, the finance needed to implement domestic adaptation priorities, based on plans submitted under the Paris agreement, is estimated at $387 billion per year.
As these costs rise, public multilateral and bilateral adaptation finance flows to developing countries are falling — by 15 percent, to around $21 billion, in 2021. As a result, the adaptation finance gap is now estimated to be between $194 billion and $366 billion per year.
To put it in blunt terms, the international community is looking likely to break the promise it made at the 2021 climate summit in Glasgow to double adaptation finance support to around $40 billion per year by 2025. Even if this promise were to be met, it would reduce the gap by only 5 to 10 percent.
The consequences of this lack of sufficient financing and resultant lack of implementation of adaptation projects are stark. They are being lived right now by hundreds of millions of people — from crops failing and livestock dying in baking heat to towns and villages being washed away.
There is a clear moral and climate justice imperative to protect the people least responsible for the climate crisis. There is also a clear economic case for investing in adaptation now to minimize future costs. The report cites studies showing that every billion dollars invested in adaptation against coastal flooding leads to a $14 billion reduction in economic damages, while $16 billion per year invested in agricultural adaptation would prevent about 78 million people from suffering chronic hunger.
Crucially, as developed nations are being asked to face up to their responsibility for climate losses and damages, investment in adaptation, alongside mitigation, would minimize future costs. The 55 most climate-vulnerable economies alone have already experienced losses and damages of more than $500 billion in the last two decades. These costs will rise steeply in the absence of forceful mitigation and adaptation. Somebody is going to have to foot this bill.
The smartest course of action is to find new ways to deliver finance for adaptation, and UNEP’s new assessment looks at ways to do so, starting with increased domestic expenditure, stronger international finance and private-sector engagement. Additional avenues include remittances, increasing and tailoring finance to small and medium enterprises and a reform of the global financial architecture.
The loss and damage fund, which will need to move toward innovative financing mechanisms, and discussions to establish a New Collective Quantified Goal on Climate Finance are important steps in the right direction. However, COP28 — the next round of climate talks taking place in Dubai, UAE, in December — must deliver new momentum to inform the Global Goal on Adaptation and provide a robust framework for adaptation finance needs.
Even if the international community were to stop emitting all greenhouse gases today, it would take decades for the climate to stabilize. Climate disruption is here to stay for the long haul. At COP28, policymakers, multilateral banks, investors and the private sector must start to deliver the necessary finance to insulate low-income vulnerable countries and disadvantaged groups from climate impacts. The alternative is more death, more loss and damage and far bigger invoices payable in the years to come.
Inger Andersen is under-secretary-general of the United Nations and executive director of the UN Environment Programme (UNEP).