Source: TH
Context:
The United Nations Environment Programme (UNEP) has released its flagship report Adaptation Gap Report 2025, warning that the global finance gap for climate adaptation in developing countries has widened sharply. The report highlights an urgent need for scaling up grant-based and concessional finance to prevent climate vulnerability from turning into a development crisis.
About the Report
- Released by: UNEP–Copenhagen Climate Centre
- Type: Annual global assessment tracking progress on climate adaptation planning, implementation, and financing
- Purpose: To evaluate whether the world—especially developing countries—is adapting fast enough to climate impacts and to quantify the adaptation finance gap.
- Relevance: Serves as an input document for UNFCCC negotiations and the upcoming COP30 in Belém, Brazil.
Key Findings
1. Massive Adaptation Finance Gap
- Developing countries need US$310–365 billion annually by 2035.
- Current adaptation finance stands at only US$26 billion (2023) — 12–14 times lower than the requirement.
- Commitments declined from US$28 billion in 2022, indicating that the Glasgow Climate Pact (COP26) goal of doubling adaptation finance by 2025 will likely be missed.
2. Debt-Heavy Financing
- About 58% of adaptation finance is provided through loans, including non-concessional credit, raising debt concerns for vulnerable nations.
3. Uneven and Outdated Planning
- 172 countries have at least one National Adaptation Plan (NAP), but 36 are outdated.
- Implementation progress is slow, with 1,600 adaptation actions recorded globally, mainly in agriculture, water, and biodiversity, yet few with measurable outcomes.
4. Weak Private Sector Participation
- The private sector contributes just US$5 billion annually, despite having potential to mobilise US$50 billion with appropriate de-risking policies.
5. Baku–Belém Roadmap (2024)
- Envisions US$1.3 trillion per year by 2035 in total climate finance.
- Calls for greater grant-based flows and non-debt instruments to prevent adaptation debt traps.
6. Global Call to Action at COP30
- The report urges a “global collective effort (mutirão global)” under Brazil’s presidency at COP30 to align adaptation goals, transparency mechanisms, and finance commitments.
India’s Position and Relevance
| Aspect | Description |
|---|---|
| 1. Alignment with UNEP Goals | India’s National Action Plan on Climate Change (NAPCC) and State Action Plans on Climate Change (SAPCCs) align with the United Nations Environment Programme (UNEP) framework for mainstreamed adaptation in agriculture, water, and infrastructure sectors. |
| 2. Vulnerability Context | India faces increasing climate risks such as heatwaves, floods, cyclones, and glacial melt, emphasizing the urgent need for climate-resilient investments and adaptive infrastructure. |
| 3. Leadership Initiatives | India demonstrates global leadership through initiatives like the International Solar Alliance (ISA), Coalition for Disaster Resilient Infrastructure (CDRI), and Mission LiFE (Lifestyle for Environment), strengthening its role in global climate adaptation diplomacy. |
| 4. Financing Challenges | Scaling up adaptation efforts in India requires enhanced access to global concessional finance, technology transfer, and capacity-building support for both national and local implementation. |
Limitations
- Severe Finance Shortfall: Available funding covers only one-twelfth of the global requirement.
- Debt-heavy Structure: Over half of adaptation funding is loan-based, risking “adaptation debt traps.”
- Low Private Sector Role: Due to high risk and lack of blended-finance frameworks.
- Weak Monitoring Systems: Absence of strong MEL (Monitoring, Evaluation, and Learning) frameworks in most nations.
- Risk of Maladaptation: Poorly designed adaptation projects could inadvertently increase vulnerability.
Way Forward
- Shift to Grant-based Finance: Prioritise concessional and grant flows over loans.
- Mobilise Private Capital: Use public–private partnerships, guarantees, and de-risking mechanisms to attract investors.
- Strengthen Resilience Metrics: Integrate climate risk indicators in banking, insurance, and investment systems.
- Regularly Update NAPs: Ensure alignment with new scientific and local climate data.
- Enhance South–South Cooperation: Promote technology sharing and capacity building via ISA, CDRI, and other platforms.
