UNEP Adaptation Gap Report 2024: Come hell and high water

This article is an abridged version of the original text, which can be downloaded from the right-hand column. It highlights some of the publication’s key messages below, but please access the downloadable resource for more comprehensive detail, full references, or to quote text. 

Introduction

The Adaptation Gap Report (AGR) 2024 provides its annual assessment on progress in adaptation planning, implementation and finance. It shows that, while inching forward on adaptation planning, collectively developing countries are falling behind on implementation because of the enormous gap between adaptation finance needs and flows.

This is especially relevant in the context of the New Collective Quantified Goal (NCQG) for climate finance, which is to be established during COP 29 in Baku. However, given the scale of the challenge, the NCQG can only be a part of the solution, and bridging the adaptation finance gap will also require innovative approaches and enabling factors to mobilize additional financial resources. In addition to finance, there is a need to strengthen capacity-building and technology transfer, and to enhance the effectiveness of adaptation actions. The report also provides deeper insights into the status and trends of capacity-building and technology transfer, and how improving them can contribute to enhancing effective adaptation planning and implementation. Lastly, given the AGR’s role in providing regular progress updates on metrics relevant to the global goal on adaptation, this year’s report also reflects on what can already be said about progress towards several of the targets laid out in the United Arab Emirates Framework for Global Climate Resilience (UAE FGCR) that was agreed at COP 28 in Dubai.

Progress in adaptation planning, implementation and finance

The quality of adaptation planning is improving, but reaching global coverage of national adaptation planning instruments will be difficult.

171 countries (87 per cent) now have at least one national adaptation planning instrument (policy, strategy or plan) in place. Of these, 51 per cent have a second and 20 per cent have a third instrument (figure ES.1, below). However, although 16 of the 26 countries without a national planning instrument are in the process of developing one, there remain 10 countries that currently show no indication of developing such an instrument. Seven of these countries rank highly on the Fragile States Index, suggesting that they face internal fragility, conflict or geopolitical tensions.

An analysis of the national adaptation plans (NAPs) submitted to the UNFCCC secretariat reveals that the potential effectiveness of adaptation planning is mixed. Most countries identify a mix of priorities that address both specific, sectoral climate risks and enablers of adaptation action, while addressing issues of inclusivity and participation. However, there are shortcomings in the robustness of the evidence base and gaps regarding specific timeframes for and costs of adaptation priorities affecting their implementability.

Finally, an analysis of alignment between NAPs and NDCs finds that 68% of countries’ NAPs and NDCs are only partially aligned, with a further 16% showing no alignment.

Progress in adaptation implementation is slow and marred with problems. Countries need to ramp up their ambitions to prepare for increasing climate risks.

Information on the implementation of adaptation actions shows large annual fluctuations but they ultimately result in a slight upward trend over time. Yet considering the pace of climate change, a boost in support of adaptation implementation is urgently needed.

Analysis of NAP implementation progress reports shows mixed results, and reveals a range of institutional, regulatory, financial and capacity-related barriers limiting progress. Countries often overcome initial difficulties and report significant progress regarding the extent of actions that are under implementation. However, data on the results and effectiveness of NAP implementation remains very limited. Of those countries that have assessed the adequacy of their adaptation response, all found it to be insufficient relative to the extent of climate risks.

The adaptation finance gap remains extremely large, and bridging this gap is a priority for the NCQG for climate finance.

International public adaptation finance flows to developing countries increased from US$22 billion in 2021 to US$28 billion in 2022: the largest absolute and relative year-on-year increase since the Paris Agreement. This reflects progress towards the adaptation component of the Glasgow Climate Pact, which urged developed country Parties to at least double their collective provision of climate finance for adaptation to developing country Parties from 2019 levels by 2025, though further significant increases are required to achieve this goal.

However, even if this doubling is achieved, it would only reduce the adaptation finance gap by about 5%. The adaptation finance gap is relevant in the context of the NCQG for climate finance, which is to be established before 2025. A comparison of adaptation finance needs (estimated at US$215–387 billion/year in the AGR 2023) against 2022 international public finance flows shows that a very large adaptation finance gap still exists. However, the assessment of the gap is constrained by insufficient data on finance flows from domestic public and private sector sources, both of which are important sources of adaptation finance.

Bridging the adaptation finance gap

Meeting the climate challenge will require a scaling up of adaptation finance, but also a more strategic approach to investment.

The authors have developed a typology of adaptation and financing challenges. The figure below shows that it is generally easier to finance no-regret, reactive and incremental adaptation (top left), and adaptation in market sectors (bottom left). Conversely, it is more challenging to finance anticipatory and transformational adaptation (top right), and adaptation in non-market sectors, especially for the most vulnerable (bottom right).

To meet the scale of the climate change challenge, adaptation financing needs to shift from the historic focus on reactive, incremental and project-based financing (top left) towards more anticipatory, strategic and transformational adaptation (top centre and right). This requires more action in areas that are harder to finance and more complex to develop.

Only around one third of the adaptation finance gap is in areas typically financed by the private sector, but there is still a large opportunity for private sector investments.

Over two thirds of estimated costs/finance needs are in areas that are typically financed by the public sector through international or domestic sources, because they have public good characteristics or are in social or non-market sectors. This means that without more public finance (international and domestic) – or innovative approaches to financing – it will be difficult to deliver the majority of countries’ adaptation priorities (as set out in NDCs and NAPs).

At the same time, one third of modelled costs/ finance needs are in areas that have potential for private financing, such as, for example, in market sectors including commercial agriculture, water and infrastructure. However, even in these cases, there is often a need for the public sector to use public finance to de-risk and unlock private investment.

Enabling factors are key for unlocking adaptation finance, especially for the private sector.

1. A number of new approaches and financial instruments are emerging which seek to address some of the challenges to adaptation, by better defining adaptation outcomes or creating incentives for adaptation investment.
2. For the public sector there are also a number of enabling factors that include the creation of funds and financing facilities; climate fiscal planning and climate budget tagging; mainstreaming in national development planning and medium-term expenditure frameworks; and adaptation investment planning.
3. For the private sector, enabling factors include climate risk disclosure frameworks, transition planning and adaptation taxonomies. They also include new approaches and financial instruments that seek to de-risk private sector finance using public (blended) finance.

The question of who ultimately pays for adaptation is not being adequately addressed in the current discussion on adaptation financing.

Adaptation finance flows have very different profiles at subnational levels for the most vulnerable groups in society. These differences are relevant for the international negotiations around the NCQG and the finance flows from Annex I to developing countries. Except for the grant model where the international funder bears all the costs, all other models ultimately lead to the LDC bearing much of the costs of adaptation. Therefore, while additional funding helps close the adaptation finance gap, it is not in line with the principle of common but differentiated responsibilities and respective capabilities – an underlying principle of the UNFCCC – nor with the polluter pays principle.

Enhancing capacity-building and technology transfer to improve the effectiveness of adaptation actions

Capacity-building and technology transfer are central to enhancing adaptation action in developing countries, but there is uncertainty regarding their effectiveness.

In addition to finance, capacity-building and technology transfer are critical to enhance effective adaptation action. However, despite references to capacity and technology needs being nearly ubiquitous in UNFCCC documents, such as NAPs and technology needs assessments, ongoing efforts are often uncoordinated, expensive and short-term, and there is insufficient data to assess their effectiveness. Better integration, targeted support and greater South-South, North-South and triangular cooperation could go a long way to closing knowledge gaps, and could be articulated in countries’ revised NDCs and NAPs.

Developing countries express needs for more capacity and technology across all aspects of adaptation planning and implementation, with a focus on water, food and agriculture.

Food and agriculture are mentioned in nine out of ten NAPs, followed by capacity needs for sectors related to the environment, water and health. Capacity needs are articulated for sector-specific technologies, but also to enable better planning, implementation, monitoring and evaluation, as well as for a range of underlying enabling factors. Similarly, by far the greatest technology needs are articulated for agriculture and water, whereas technologies for coastal zone protection, the third largest priority area, are relevant for a significantly smaller number of countries.

The authors’ analysis suggests that there is an increasing focus of climate-related development finance to support adaptation through the introduction of new technologies. This is particularly evident for the agriculture sector, which is receiving on average 31% of adaptation-related development finance per year.

Bridging the gap between capacity and technology needs and levels of action on the ground requires overcoming multifaceted challenges.

There are a number of factors that diminish the effectiveness of the support currently provided. Among the most prevalent are economic and financial constraints related to high upfront investment costs, difficulties in obtaining loans, and uncertainties surrounding the return on investments. These constraints are especially apparent for technologies that require significant capital investment, such as solar-powered irrigation systems where comparatively high installation and maintenance costs often hinder widespread adoption. In addition, legal and regulatory frameworks can pose major challenges, requiring more robust, streamlined and supportive X domestic policies to foster the development and transfer of technologies and skills identified as important by developing countries. Moreover, in sectors such as agriculture and water where local conditions are critical, low technical capacity combined with a lack in infrastructure, information and awareness often result in poor adoption rates.

Better capacity-building and technology transfer could accelerate adaptation planning and implementation.

1. Interventions to support capacity-building should start by identifying and mobilizing endogenous capacities that already exist; provide a balance of emphasis on “hard” and “soft” capacities; and place gender equality and social inclusion considerations at their centre.
2. A far more robust evidence base to inform capacity-building interventions and technology transfer priorities is needed.
3. Capacity-building and technology transfer plans should support adaptation across sectors, scales and development priorities, and build capacity for transformational change.
4. The effectiveness of technology transfer relies on it being part of a broader development strategy, and strongly integrated with an associated assessment of capacity-building needs.

Insights into aspects of the United Arab Emirates Framework for Global Climate Resilience (FGCR)

Countries are making progress towards the targets of the UAE FGCR, but increased efforts will be needed to reach them in time.

The UAE FGCR, agreed during COP 28 in Dubai, provides a framework to track progress towards the global goal on adaptation. Considering that the AGR annually reports on progress in adaptation planning and implementation, this year’s report takes the opportunity to reflect on what can already be said about the new framework’s thematic and dimensional targets.

1. Almost all NAPs contain references to at least one of the framework’s thematic targets, and about a third reference elements of the dimensional targets. With the exception of poverty eradication and protecting cultural heritage, thematic targets are well covered, whereas the dimensional targets are currently not receiving as much attention or are framed differently.
2. The NAP analysis further showed that information about future impacts, vulnerabilities and risks is uneven, frequently covering only a subset of sectors, if at all, and it is often presented in the context of data and knowledge gaps. Lacking XII capacity and technology to assess the complex nature of climate impacts reduces the ability for robust decision-making.
3. While nearly nine out of ten countries have at least one national adaptation planning instrument in place by now, the AGR shows that great efforts will be needed to reach global coverage by 2030, considering the current slow rate of progress towards closing this gap. Moreover, although there is evidence that many countries are in the process of implementing their adaptation priorities, it is too early to assess the rate at which this is occurring, not least because many countries lack monitoring, evaluation and learning frameworks. Lastly, considering that the quality of planning instruments and the levels of implementation are uneven in terms of data robustness, sector coverage, implementability and inclusiveness, it is still unclear whether countries are reducing the social and economic impacts of key climate hazards.

In conclusion, while it is difficult to assess progress towards any of the thematic targets in the absence of specific indicators and metrics, the adoption of clear timeframes for the achievement of the dimensional targets shows that efforts in impacts, vulnerability and risk assessments, planning, implementation, and monitoring, evaluation and learning need to be ramped up if these targets are to be met.

Suggested citation

United Nations Environment Programme (2024). Adaptation Gap Report 2024: Come hell and high water — As fires and floods hit the poor hardest, it is time for the world to step up adaptation actions. Nairobi. https://doi.org/10.59117 /20.500.11822/46497.