The world’s poorest countries will need up to $340 billion a year to adapt their economies to a rapidly changing climate by the end of this decade, yet rich countries are failing to keep pace, according to a new report from the United Nations Environment Programme.
Estimated adaptation costs are as much as ten times higher than what developing countries are currently receiving in terms of finance, and the widening gap needs to be plugged if they are to avoid the worst impacts of climate change, according to the UN report. Adaptation flows reached $29 billion in 2020, an increase of 4% from the year before.
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UN Secretary-General Antonio Guterres said that an Adaptation Pipeline Accelerator will be unveiled at the COP27 climate summit in Egypt, starting next week, in a bid to draw in funding for adaptation projects, such as sea walls or early warning systems to help communities prepare for climate-related weather events. These projects are typically less attractive to investors because they can’t easily generate revenue like a solar or wind farm can.
A senior UN official said the pipeline accelerator could resemble the framework of Just Energy Transition Partnerships, which involve a consortium of donors supplying cash to countries like South Africa in an effort to transition them away from coal. Such a mechanism will involve coordinating private and public finance around specific adaptation projects, according to the official, who could not be identified because details of the pipeline have not yet been made public. Countries like Rwanda have an investment gap of around $500 million, that the plan could aid.
“The investment pipeline is blocked; we must unblock it now,” Guterres said in a statement on the UNEP’s Adaptation Gap Report. “It is high time for unprecedented coordination among recipient governments, development partners and other financiers,” he added, saying that he has asked the UN’s Development Programme, the NDC Partnership and the Green Climate Fund to lead the pipeline accelerator.
Rich countries have so far fallen short of a commitment to provide $100 billion in climate finance annually and are struggling to make sure that at least half of that goes specifically toward developing countries’ adaptation needs. The Glasgow Climate Pact last year stipulated that adaptation finance should be doubled.
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UNEP’s adaptation assessment follows two damning reports last week, which showed the world was far from reaching its Paris Agreement goal to limit global warming to well below 2 degrees Celsius, ideally 1.5C. One report by UNEP said that “unprecedented” action would be needed this decade to achieve that goal.
Guterres also doubled down on his call to ensure that countries deliver on his goal for universal early warning systems within five years, and supported poorer countries calling for a dedicated “loss and damage” finance facility to cover the destruction caused by centuries of unabated fossil-fuel emissions.
“COP27 must provide a clear and time-bound roadmap on closing the finance gap for addressing loss and damage,” he said. “This will be a central litmus test for success.”
