As world heads for overshoot of 1.5°C, adaptation is too slow

• Growth in international public adaptation finance flows are flattening, rising by just US$1 billion between 2023 and 2024
• Even if aspiration to triple international public adaptation finance flows to developing countries by 2035 is met, only 20-29 per cent of needs will be covered
• Beyond finance, governments are strengthening the institutional environment needed to accelerate adaptation implementation
• Losses and damages are growing in developing countries, but responses and finance remain insufficient

With global warming set to exceed 1.5°C, adaptation finance falls far short of needs, implementation is constrained by institutional barriers, and losses and damages are mounting, according to new report from the United Nations Environment Programme (UNEP).

UNEP’s 2026 Adaptation Gap Report: Ready? Not finds that expanded, effective and well-financed adaptation will be crucial to reduce risks, strengthen resilience and support more inclusive development. However, international public adaptation finance flows from developed to developing countries are far below estimated needs of US$305 billion annually by 2035. Even if the COP30 aspiration to triple international public finance flows to developing countries by 2035 is achieved, this would only cover 20-29 per cent of what they need to deal with intensifying climate impacts.

“The world is not ready to adapt to current climactic conditions, never mind what overshoot of 1.5°C will bring,” said Inger Andersen, Executive Director of UNEP. “At climate COP31 in Türkiye and beyond, nations must focus on intensifying efforts to achieve the COP30 Global Mutirão aspiration of tripling adaptation finance by 2035 – while understanding that they will need to go even higher to save lives, avoid losses and damages and protect economies.” 

The state of finance 

International public adaptation finance flows from developed to developing countries reached US$28.2-31.7 billion in 2024, a US$1 billion increase over the previous year. Flows to least developed countries (LDCs) and small island developing states (SIDS) rose in real terms between 2019 and 2024 but have declined from a 2022 peak, when they should be increasing.

Based on an assessment of nationally determined contributions (NDCs), national adaptation plans (NAPs) and model-based estimates, the report provides a central estimate of around US$305 billion in adaptation needs for developing countries annually by 2035. This largely excludes the private sector’s own needs, which could almost double this figure.

At COP30, The Global Mutirão decision called for efforts to at least triple adaptation finance by 2035. Depending on whether the tripling is based on current flows or on the Glasgow Climate Pact, international adaptation finance would increase to US$85-120 billion per year by 2035. When adjusted for inflation, the tripling would meet just 20-29 per cent of adaptation finance needs in 2035. More positively, tripling flows to LDCs and SIDS could meet 49-83 per cent of their needs.

Positive trends

The report does find some positive trends.

While growth remains far below the pace required to meet the Glasgow Climate Pact to double finance from 2019 levels to US$40 billion by 2025, the goal could still be met. Multilateral Development Banks (MDBs) are likely to have increased their financing significantly in 2025 – but attaining the goal will depend on whether adaptation flows from bilateral development partners are affected by declining official development assistance.

Financial flows between developing countries are also increasing. Contributions through MDBs and direct South-South cooperation rose from US$3.8 billion in 2019 to US$9.6 billion in 2024. Meanwhile, private flows are growing – although they primarily address the private sector’s own adaptation needs or are likely to be paid for by developing countries themselves, and they may only reduce the funding gap of more public-oriented adaptation actions by 15-20 per cent.

But finance is insufficient on its own. Progress also depends on a range of institutional factors that help translate adaptation action priorities into implemented measures. Governments are already taking steps to strengthen these factors, including by adopting climate change framework laws, creating platforms for policy learning, improving coordination across sectors and levels of government, and establishing dedicated mechanisms to mobilize and manage climate finance. 

Losses and damages mounting

The lack of strong mitigation and adaptation means that climate-related losses and damages, which can also happen despite adaptation action, are substantial. The report found that finance for losses and damages is falling short of identified needs, while complex procedures and limited capacity make support difficult to access.

For example, the first round of the Fund for responding to Loss and Damage generated requests worth US$2.8 billion, outstripping the initial funding envelope of US$342 million. This demonstrates a large unmet demand, but we do not yet know the global Loss and Damage finance gap.

The report finds that there is a clear need for stronger assessment capacity, adequate and predictable financial and technical support, simpler access procedures and meaningful participation by affected communities in shaping responses to losses and damages.