This series of short, introductory briefings are designed for readers new to the debate on global climate change financing. In light of the fast pace of developments in climate finance, the briefs provide a better understanding of the quantity and quality of financial flows going to developing countries.
The costs of adaptation to climate change in developing countries are substantial. Developed countries have committed to scale up support for adaptation in developing countries, particularly in least developed countries (LDCs) and small island developing states (SIDS). They promised to double adaptation finance between 2014 and 2020 under a roadmap presented for COP 22. The largest sources of approved funding for adaptation projects are currently the Pilot Program for Climate Resilience (PPCR) of the World Bank’s Climate Investment Funds and the Least Developed Countries Fund (LDCF) administered by the Global Environmental Facility. Developed countries’ contribution to these funds remain low compared to those funds supporting mitigation; at a global level, adaptation remains underfunded.
The Green Climate Fund (GCF) is increasingly becoming a major source of adaptation finance; set to devote 50% of its USD 10 billion initial resource mobilisation to adaptation, with half of that going to the SIDS, LDCs and African states (see CFF 11). The GCF approved the largest volume of adaptation finance this year, with USD 400 million for nine projects targeting adaptation. The amount of cumulative finance approved for adaptation from key climate funds tracked by Climate Funds Update has grown to USD 3.9 billion in 2017. Directing adaptation funding to countries most vulnerable to the impacts of climate change as well as to the most vulnerable people and population groups within recipient countries remains an imperative, with grant financing continuing to play a major role.