International climate adaptation finance falls far short of developing countries’ needs, with funding growth stagnating as global warming threatens to exceed the 1.5°C threshold, a new United Nations Environment Programme (UNEP) report warns.
The 2026 Adaptation Gap Report, titled Ready? Not, estimates that developing countries will require about $305 billion annually by 2035 to adapt to worsening climate impacts.
However, international public adaptation finance from developed to developing countries increased by only $1 billion between 2023 and 2024, reaching between $28.2 billion and $31.7 billion.
The report warned that even if the COP30 aspiration to triple international public adaptation finance by 2035 is achieved, the funding would cover only 20 to 29 per cent of developing countries’ projected needs.
UNEP Executive Director Inger Andersen said the world was inadequately prepared for current climate conditions, let alone the consequences of global warming exceeding 1.5°C.
“The world is not ready to adapt to current climatic conditions, never mind what overshoot of 1.5°C will bring,” she said.
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Andersen urged countries to intensify efforts ahead of COP31 in Türkiye and beyond to meet the commitment to triple adaptation finance, warning that substantially greater funding would be required to protect lives, economies and communities.
The report noted that adaptation finance flows to least developed countries and small island developing states increased in real terms between 2019 and 2024 but declined from their 2022 peak.
It estimated that achieving the tripling ambition could raise annual international adaptation finance to between $85 billion and $120 billion by 2035, depending on the baseline used.
Even so, the report said the funding would meet only 20 to 29 per cent of projected adaptation needs after adjusting for inflation.
For least developed countries and small island developing states, however, tripling finance could cover between 49 and 83 per cent of their requirements.
UNEP also identified some positive developments, including increasing financial cooperation among developing countries.
Funding through multilateral development banks and direct South-South cooperation rose from $3.8 billion in 2019 to $9.6 billion in 2024.
Private-sector adaptation finance is also growing, although the report said much of it addresses businesses’ own adaptation needs or is ultimately financed by developing countries themselves.
It estimated that private flows could reduce the funding gap for adaptation activities serving broader public interests by only 15 to 20 per cent.
Beyond financing, the report highlighted institutional barriers limiting the implementation of adaptation measures, despite progress by some governments in strengthening climate governance.
These efforts include introducing climate change framework laws, improving coordination across government institutions, establishing platforms for policy learning and creating mechanisms to mobilise and manage climate finance.
The report also warned that climate-related losses and damages are mounting, while available funding and support remain inadequate.
It cited the first funding round of the Fund for Responding to Loss and Damage, which received requests worth $2.8 billion against an initial funding envelope of just $342 million.
UNEP said the disparity demonstrated substantial unmet demand for assistance, although the overall global financing gap for losses and damages remains unknown.
It called for stronger assessment capacity, predictable financial and technical support, simpler funding procedures and meaningful participation by affected communities in decisions on addressing climate-related losses and damages.
