An ever-increasing amount of money – currently estimated at about US$387 billion – is needed annually from now until 2030 to finance domestic adaptation to climate change, the UN environmental body said.
Finance flows to enhance adaptation efforts are faltering at a time when they should be accelerating to cope with the rapidly intensifying impacts of climate change, a new report has concluded, arguing that the current gap in funding is the highest ever.
Published Friday by the UN Environment Programme (UNEP), the leading global voice on the environment, the highly-anticipated Adaptation Gap Report 2023 suggests that the current adaptation finance gap – the difference between estimated adaptation financing needs and costs (US$215 billion to US$387 billion) and finance flows (US$21.3 billion) – is around US$194-366 billion per year until 2030, with finance needs for adaptation efforts in developing countries likely 10-18 times more than current international public finance flows.
The growing financial needs, now at least 50% bigger than previously thought, are the result of the rapidly deteriorating global climate. 2023 is on track to be the hottest year in history after an unprecedented summer saw temperature records shattered and uncountable extreme weather events that brought devastation across all continents.
According to the report, current climate action is “woefully inadequate” to meet the goal of limiting global warming to 1.5C above pre-industrial levels and the adaptation targets set out in the Paris Agreement eight years ago.
Several studies have already pointed out that, while the planet has already warmed about 1.1C, current mitigation strategies are putting us on a path to exceed the 2C mark by 2030 and even reach 2.4-2.6C of warming by the end of the century. Moreover, the Intergovernmental Panel on Climate Change (IPCC) has already warned that climate risks would persist even if we were to meet the Paris Agreement goals, making the need for far-reaching, bold adaptation strategies imperative.
According to the report, about 15% of the 194 Parties to the UN Framework Convention on Climate Change (UNFCCC) lack a national adaptation plan. Of the countries which have such mechanisms in place, just under half of them have revised or updated them and only about 25% of them have legal instruments in place that require national governments to take steps in terms of climate adaptation.
“Action to protect people and nature is more pressing than ever… Yet as needs rise, action is stalling” said UN Secretary-General António Guterres in his remarks for the report’s launch. “The world must take action to close the adaptation gap and deliver climate justice.”
The report identifies seven ways to increase finance, including core approached such as domestic and private expenditure as well as international finance, and suggests a complete “reform” of the global financial architecture, which include global players such as the World Bank, the International Monetary Fund (IMF), and the World Trade Organization (WMO) as well as multilateral development banks. Among the other strategies required to bridge the adaptation finance gap are remittances by migrants to their home countries and increased financing for small and medium-sized enterprises (SMEs).
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UNEP also calls for the implementation of article 2.1(c) of the Paris Agreement, which requires governments to make financial flows consistent with a low-emission pathway and climate-resilient development.
The Adaptation Gap Report 2023 also focuses on the historic deal reached at last year’s UN climate summit in Sharm El-Sheikh, COP27, to establish a loss and damage fund to help climate-vulnerable countries deal with the harm caused by global warming. It argues that, while attention is growing around loss and damage compensation, real action is lagging behind, leaving uncertainty regarding how to address the financial needs of developing countries.
“Even if the international community were to stop emitting all greenhouse gases today, climate disruption would take decades to dissipate,” said Inger Andersen, Executive Director of UNEP. “So, I urge policymakers to take heed of the Adaptation Gap Report, step up finance and make COP28 the moment that the world committed fully to insulating low-income countries and disadvantaged groups from damaging climate impacts.”
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