The Adaptation Gap Report 2023 issued by the UN Environment Programme (UNEP), says the world is underprepared, under invested and lacking the necessary planning, leaving us all exposed. It warns that instead of speeding up, progress on adapting to climate change is stalling.

The slowdown extends to finance, planning and implementation, says UNEP, with massive implications for loss and damage, particularly for the most vulnerable.

Financial lag

“Today’s report shows the gap in adaptation funding is the highest ever. The world must take action to close the adaptation gap and deliver climate justice,” said the UN Secretary-General António Guterres, commenting on the report’s findings.

The updated adaptation costs for developing countries are estimated at $215 billion to $387 billion annually this decade, reflecting higher estimates than previous studies which are bound to increase significantly by 2050.

And the needs of developing countries are 10-18 times higher than the flow of public financing – over 50 per cent higher than the previous estimated range.

Pledges peter out

Despite pledges made at COP26 in Glasgow to double adaptation finance support to around $40 billion per year by 2025, public multilateral and bilateral adaptation finance flows to developing countries declined by 15 per cent to around $21 billion in 2021.

Concurrently, the adaptation finance gap is now estimated to be $194-366 billion per year.

Costs will only rise

The report cites a recent study that indicates the 55 most climate-vulnerable economies alone have already experienced loss and damage valued at more than $500 billion in the last two decades.

Costs are likely to rise steeply in the coming decades, particularly in the absence of forceful mitigation and adaptation.

The new loss and damage fund will be an important instrument to mobilize resources, but issues remain, as the fund will need to move towards more innovative financing mechanisms to reach the necessary scale of investment.

The UN chief thinks one source could come in tax revenue from the big emitters and polluters.

“Fossil fuel barons and their enablers have helped create this mess; they must support those suffering as a result,” he said in his message, calling on governments to tax the “windfall profits of the fossil fuel industry”, and to devote some of those funds to countries suffering loss and damage.

Mitigate now to minimize future costs

Authors of the report advocate for an ambitious adaptation: it can enhance resilience, which is particularly important for low-income countries and disadvantaged groups, including women.

For example, every $1 billion invested in adaptation against coastal flooding leads to a US $14 billion reduction in economic damages, while $16 billion per year invested in agriculture could help an astonishing 78 million people avoid starvation or chronic hunger due to climate impacts.

Finding innovative ways

The UNEP report identifies ways to increase financing, including through domestic expenditure and international and private sector finance.

Additional avenues include remittances, increasing and tailoring finance to Small and Medium Enterprises, shifting finance flows towards low-carbon and climate resilient development pathways, and a reform of the global financial architecture.

“Multilateral Development Banks should also allocate at least fifty percent of climate finance to adaptation and change their business models to mobilize far more private finance to protect communities from climate extremes,” expanded this point the UN chief.

COP28 must address ‘adaptation emergency’

“We need bold action to respond to escalating loss and damage that results from climate extremes”, said the UN chief.

“All parties must operationalize the Loss and Damage Fund at COP28 this year. And we need new and early pledges to get the fund started on a strong footing”.

“We are in an adaptation emergency. We must act like it. And take steps to close the adaptation gap, now,” the UN Secretary-General said.