Flows of money to help poor countries cope with the climate crisis have been flat or falling since 2022, despite growing impacts from extreme weather and warnings from scientists that global heating may be accelerating. In other words, the house is on fire, the fire department's budget is being cut, and everyone's pretending the smoke is just atmosphere.
A new UN report has revealed that financial support for adaptation - which includes measures such as stronger infrastructure, early warning systems, flood protection and drought-resilient irrigation - is woefully short of what is needed and far behind even the inadequate promises that rich countries signed up to in 2021 in recognition of their far greater responsibility for the crisis. Yes, the bar was already on the floor, and we've somehow limboed under it.
The world's 155 developing nations will need $305bn (£226bn) annually by 2035 to adapt to heatwaves, fires, floods, storms, droughts and rising sea levels made more intense or frequent by decades of burning fossil fuels, mostly in wealthy global north nations, according to the UN Environment Programme. Yet finance flows from rich to poor countries were at most $32bn in 2024, the latest year for which data is available. That was only a billion up on the previous year, and down from the peak of 2022, partly because many governments in Europe are devoting more of their budgets to defence spending. Because nothing says 'protecting our way of life' like letting the actual climate destabilise it.
This is well behind the pace required to meet the goal of hitting $40bn by 2025, though some of the shortfall is expected to have been made up last year by multinational development banks, the report said. At the Cop30 global climate talks in Belém, Brazil, last year, wealthy nations agreed to triple adaptation finance for developing countries by 2035. This increase to between $85bn and $120bn would reduce the gap, but still meet only 20-29% of needs, the report said. So, a tripling that still leaves a tripling-sized hole.
The world's least developed countries (LDCs) and small island states are disproportionately affected by the climate crisis and least able to pay for upgrades to infrastructure, such as more sea barriers and firefighting equipment. The UN estimates these countries need $40bn to $50bn each year in adaptation finance, which is about 3-4% of their gross domestic product - double the relative burden for upper-middle-income developing countries. Despite this, LDCs received 16% less in adaptation financial support in 2024 than two years earlier. That's not a shortfall; that's a backslide with a ribbon on it.
Between 2020 and 2025, low- and middle-income countries accounted for 99% of all the 765 million people affected by floods and landslides. Some of the worst impacts on human health and natural life support systems are unaccounted for because developing nations are less likely to have monitoring systems in place to assess heat-related deaths or damage to ecosystems. So the damage is both underfunded and undercounted - a double whammy of neglect.
A recently established loss and damage fund is already overwhelmed. In its first round, 119 developing countries submitted requests totalling $2.8bn, far outstripping the initial funding of $342m. That's like opening a food bank with a single sandwich and being surprised when a queue forms.
Inger Andersen, the UNEP executive director, said a global temperature overshoot of 1.5C above preindustrial levels was now locked in, making climate impacts more intense, frequent, and unpredictable. "For the countries that contributed the least yet suffer the most, this is an unavoidable reality," she said. "Adaptation finance is a vital investment in global resilience. Delivering on these commitments protects frontline communities, prevents forced displacement, safeguards global food security, and ensures no one is left behind. Now is the time to honour commitments in full. Delays not only increase long-term costs, they also strain our near-term capacity to cope as our systems reach their limits." Translation: pay now, or pay more later while things fall apart.
Climate justice groups say adaptation finance is the most urgent issue at the upcoming COP31 UN climate summit, which will be hosted in Antalya, Turkey, from 9 to 20 November. As well as a faster, bigger flow of funds, the priority, they say, is for grants or concessionary loans rather than high-interest loans, which are difficult to pay back on sea walls, heat shelters and other projects that do not generate direct revenue. Because asking a flood-prone island to service debt on a seawall is a special kind of economic dark comedy.
The UN report underscores this, noting that debt and equity costs can more than double the budgets of adaptation projects. While wars are diverting resources and attention away from climate action, Andersen said it was important to view the interlinked nature of the world's crises: "While some might view climate action as a separate issue, ignoring it only increases national and regional vulnerability, especially as many climate impacts unfold beyond national borders. Failing to invest in mitigation and adaptation only exposes nations to greater risk. Climate change directly threatens people, economies, and the ecosystems that sustain us - and why adaptation is a direct investment in national security and resilience. The two are fundamentally inseparable." In short: you can't have security without a livable planet, no matter how many defence budgets you throw at the problem.