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Financing Adaptation in Developing Countries

Research reports

Written by Charra Tesfaye Terfassa, Binyam Yakob Gebreyes, Eskedar Awgichew Ergete, Selam Kidane Abebe, Nahom Daniel Kebede

Image credit:Scott Wallace/World Bank

The report addresses the challenges of delivering adaptation financing for developing countries, both from the supply and demand side. While the existing narrative around improving adaptation finance in developing countries focuses on supply side issues, this paper argues that addressing demand side challenges is equally necessary.

On the supply side, the challenges include the availability, accessibility, and adequacy of climate finance. On the demand side, the challenges include limits related to economic fundamentals and capacity, competing immediate socio economic priorities, limited integration of adaptation financing, limited absorption of internationally mobilized funds, indebtedness and fiscal space constraints of the public sector and private sector involvement in climate adaptation. The report also looks into how global processes within and outside the UNFCCC can help address the challenges identified.

This report was authored by partners of ODI, under the Finance Working Group.