State of Climate Action

Assessing Progress toward 2030 and 2050

Partners:

Snapshot of Climate Action

Commitments by countries, cities, and companies are increasing, but they are still far below what is needed to meet the Paris Agreement’s goals to limit warming to well below 2°C, with efforts to limit the rise in temperature to 1.5°C. Adaptation efforts are gaining traction, given the onset of impacts already happening across the globe, but greater resources are needed. And climate finance flows, which are needed to support all of these transformations, have been growing but need to be scaled up significantly.

Alasdair Massie/Unsplash

National-Level Action

Nationally determined contributions: In 2019, 103 countries representing 38.4 percent of global GHG emissions committed to enhancing their NDCs in 2020 (COP25 Presidency 2019) (ClimateWatch 2020a). Fifteen countries had submitted NDCs to the UN Framework Convention on Climate Change (UNFCCC) by November 2020, but these countries only account for 4.6 percent of global GHG emissions, and not all of these submissions reflected strengthened commitments.

Long-term strategies: As of November 2020, 19 Parties representing 26.5 percent of global GHG emissions had submitted their long-term strategies (ClimateWatch 2020c).

Net-zero targets: As of September 2020, 20 countries and the European Union had adopted net-zero targets, and over 100 more were considering doing so (Levin et al. 2020). However, the percentage of global emissions covered by an adopted national net-zero target still hovers at 10 percent.

Climate laws and policies: As of October 2020 there were 2,070 climate laws and policies worldwide (LSE, GRICCE 2020) and 64 carbon-pricing initiatives that had been implemented or were scheduled for implementation, representing 22.3 percent of global GHG emissions (World Bank 2020). At the end of 2019, 166 countries had targets for renewable electricity generation, 49 countries had targets for renewable energy sources for heating and cooling, and 46 countries had targets for renewable transportation fuels (REN21 2020).

The Paris Agreement, adopted in 2015, was instrumental in establishing the goals and processes to limit global warming to 1.5–2°C, enhance adaptation, and channel finance toward low GHG emissions and climate-resilient development. The question today is, How are countries responding to the Agreement? And, what additional action is expected?6

Based on a review of major national commitments, it is clear that some countries are stepping up their efforts to address climate change, from setting bolder emission reduction targets (in both the near and longer term) to enacting new legislation and drafting adaptation plans. But the overall global scale of ambition is still unclear, as many major emitters have yet to put forward new or updated NDCs and long-term low GHG emissions development strategies (long-term strategies). The global COVID-19 pandemic, and the resulting delay in COP26, adds uncertainty.

Nationally determined contributions

Nationally determined contributions (NDCs) submitted under the Paris Agreement set out national goals for addressing climate change, typically with a time frame ending in 2030. All of the first NDCs communicated in 2015 include targets, policies, and/or actions to mitigate climate change (i.e., reduce GHG emissions); 131 NDCs also include policies and/or actions to adapt to climate change and improve resilience (Murphy 2019).

The first NDCs communicated in 2015 are collectively insufficient to meet the Paris Agreement’s temperature goals. If all commitments that do not hinge on international support are implemented, global average temperature is projected to increase by 3.2°C by the end of the century (UNEP 2019).

To help close this “emissions gap,” countries are expected to prepare progressively more ambitious NDCs over time (UNFCCC 2015; Article 4). The first official request to enhance the ambition of NDCs is in 2020 (UNFCCC 2015; Decision 1/CP.21). Some countries are already responding to this call. In 2019, 103 countries committed to enhancing their NDCs in 2020, representing 38.4 percent of global GHG emissions (ClimateWatch 2020a). Fifteen countries had submitted NDCs to the UNFCCC by November 2020 (Figure 5), but these countries only account for 4.6 percent of global GHG emissions, and not all of these submissions reflected strengthened commitments. Major emitters in particular will need to come forward with significantly enhanced mitigation contributions in order to limit global temperature rise to well below 2°C.

Figure 5 | Status of countries’ intent to enhance NDCs, November 2020

Source: ClimateWatch (2020c).

Long-term strategies

Under the Paris Agreement, all countries are invited to communicate midcentury “long-term low GHG emissions development strategies” by 2020. These strategies reveal the scale of transformation needed to bring national climate action in line with global ambition—while at the same time focusing on sustainable development. Long-term strategies also play a key role in informing near-term decisions, helping to avoid investments that are incompatible with a low-carbon and climate-resilient future. Long-term strategies can also be a particularly helpful guide as countries begin to establish national economy recovery plans in response to COVID-19—ideally aligned with long-term low-emissions and climate-resilient development. As of November 2020, 19 Parties had submitted their long-term strategies, representing 26.5 percent of global GHG emissions (ClimateWatch 2020c) (Figure 6). Many other countries, including major emitters, have initiated domestic preparations in order to meet the 2020 deadline (2050 Pathways Platform 2016).

Figure 6 | Status of long-term strategies communicated to the UN Framework Convention on Climate Change, November 2020

Source: ClimateWatch (2020c).

Net-zero targets

There is growing momentum from countries to set net-zero emissions targets, to be achieved by 2050 or sooner. By September 2020, eight countries have enacted net-zero legislation (Sweden, Marshall Islands, Hungary, Portugal, the United Kingdom, France, Denmark, and New Zealand), seven have tabled legislation (Austria, Costa Rica, Finland, Norway, Slovenia, Switzerland, and the European Union), and six have included net-zero goals in policy documents (Andorra, Bhutan, Singapore, Fiji, Iceland, and Japan) (Levin et al. 2020). More than 100 other countries “are working towards achieving net zero CO2emissions by 2050” (COP25 Presidency 2019). Only around 10 percent of global emissions are, however, covered by some form of an adopted net-zero target (Levin et al. 2020).

Laws and policies

According to the Grantham Research Institute on Climate Change and the Environment at the London School of Economics (LSE, GRICCE 2020), as of October 2020 there were 2,070 climate laws and policies worldwide.

Looking just at carbon-pricing initiatives, as of October 2020, 64 emissions trading schemes or carbon taxes had been implemented or were scheduled for implementation, representing 22.3 percent of global GHG emissions (World Bank 2020) (Figure 7). Of these initiatives, 33 were carbon taxes and 31 were emissions trading systems (World Bank 2020).

Figure 7 | Status of carbon-pricing initiatives, July 2020

Source: World Bank (2020).

At the end of 2019, 166 countries had targets for renewable energy in power, 49 countries had targets for renewable energy in heating and cooling, and 46 countries had targets for renewable energy in transport (REN21 2020).

Subnational Action

Subnational climate action: As of November 2020, 10,984 cities and regions had committed to 12,577 climate actions registered on the UNFCCC Global Climate Action portal (UNFCCC 2020).

Net-zero carbon emissions by 2050: As of September 2020, 470 cities and regions had committed to achieving net-zero carbon emissions by 2050 through the Race to Zero global campaign (UNFCCC 2020).

City climate action: Current commitments of member cities of the Global Covenant of Mayors representing 21 percent of the global urban population could reduce GHG emissions by 2.3 GtCO2e by 2030 and 4.2 GtCO2e by 2050. However, city-level efforts currently fall short of the ambition needed to align with a 1.5-degree pathway (GCOM 2019). To date, 115 cities have committed to developing 1.5˚C-aligned climate action plans and 12 member cities of C40 (2020) have already completed their plans.

Progress of states and regions: Of the states and regions disclosing on their climate action, 80 percent are making positive emissions reductions toward 2030 targets. This effort is not in line with the 1.5°C trajectory in 2030, however, and these actors should raise their ambition (Quintana and Gorman 2019).

More than half of the world’s population resides in cities, and by 2050 the share of the urban population is expected to grow to two-thirds (UN 2019). The climate footprint of cities, combined with their anticipated growth, underscores the importance of cities in addressing climate change. Several factors make city climate action significant: high energy consumption and waste production, familiarity with translating global goals into local practice, the ability to trigger action by others, and experience with addressing localized environmental impacts (Bulkeley and Betsill 2003).

The number of cities and subnational regions committing to climate action has grown steadily (Figure 8). There are currently 10,932 cities and regions, primarily from developed countries, with recorded climate actions on the Global Climate Action portal (UNFCCC 2020), more than three times the number only four years ago. These cities are committing to various types of actions, including emissions reductions, renewable energy and energy efficiency targets; over 400 cities are now committing to net-zero emissions by 2050 through the Climate Ambition Alliance (Chile 2020). Many of these commitments are more ambitious than their national counterparts.7

Figure 8 | Growing number of cities and regions with recorded climate actions

 

Sources: Drawn from UNFCCC (2020).

Several examples demonstrate that cities and regions are working to address climate change, even when many countries are not. Recent analysis of more than 1,000 cities that are part of the EU Covenant of Mayors shows that 60 percent are on track to achieve their 2020 emission reduction targets (Hsu et al. 2020). In addition, 80 percent of the states and regions disclosing information on their climate action are making positive reductions. For example, the Scottish government, as part of the Under2 Coalition, is making significant progress toward its ambitious net-zero 2045 target, having reduced current emissions by 47 percent since 1990 (Quintana and Gorman 2019). The United States has seen a steady increase in commitments from states, cities, and counties on clean energy and climate change. Nearly half of U.S. states have committed to reducing GHG emissions consistent with the goals of the Paris Agreement. U.S. Climate Mayors, which added 18 new cities in the past year, now includes 430 cities. These efforts represent 68 percent of GDP, 65 percent of the population, and 51 percent of national GHG emissions (America’s Pledge Initiative on Climate Change 2019). The state of Hawaii has already exceeded its 2020 target to reduce emissions to 1990 levels (Quintana and Gorman 2019). And several cities around the world are advancing climate action plans that put their cities on a path to become emissions neutral by 2050 and more resilient to the impacts of climate change.

However, we’re still in the early stages of understanding more broadly how cities are progressing on their actions and contributing to national ambition. There is growing interest in tracking the progress of cities toward meeting these commitments; however, to date, comprehensive data are limited and thus results are mixed.

In addition, despite this growth in commitment, cities are still slow to translate their intentions into concrete plans and actions. For example, of the 115 cities that have committed, through the C40 (2020) initiative, to develop climate action plans compatible with the Paris Agreement, only 12 have done so.

Corporate Action

Corporate climate action: As of September 2020, 5,106 companies and investors had committed to 10,658 climate actions registered on the UNFCCC Global Climate Action portal (UNFCCC 2020).

Science-based targets: As of September 2020, 989 companies were taking science-based climate action and 467 companies had approved targets in line with what the latest climate science says is necessary to meet the goals of the Paris Agreement—to limit global warming to well below 2°C above preindustrial levels and pursue efforts to limit warming to 1.5°C.

Net-zero targets: As of September 2020, 995 businesses and 38 investors had committed to achieving net-zero carbon emissions by 2050 through the Race to Zero global campaign (UNFCCC 2020). Yet, while corporate commitment to mitigate climate change is growing, the pace and scale of action is wholly inadequate. A small minority of the millions of companies worldwide are taking the lead.

In addition to subnational governments, the private sector plays a central role in the production of GHG emissions and can also contribute to mitigation, particularly through technological innovation (Wright and Nyberg 2015; IPCC 2014b). Businesses are a powerful driver of economic activity and have significant influence on how quickly or slowly the world transitions to a low-carbon future. Working together with governments, businesses have incredible potential to reduce global emissions (We Mean Business 2016).

With mounting evidence that a corporate low-carbon strategy makes good business sense (Falk 2020; NCE 2018), many companies have adopted climate actions and targets and are striving to implement them. The Global Climate Action portal currently recognizes 3,973 companies and 1,133 investors with climate actions (UNFCCC 2020) (Figure 9). As of September 2020, 995 businesses and 38 investors had committed to achieving net-zero carbon emissions by 2050 through the Race to Zero global campaign (UNFCCC 2020).

Figure 9 | Growing number of companies with climate commitments

 

Source: UNFCCC (2020).

The Science Based Targets initiative has seen a rapid increase in companies joining and setting targets. As of August 2020, 972 companies had publicly joined, and 407 of these had had their targets officially approved, including several which have met their goals and are looking to renew them (SBTi 2020a) (Figure 10).

Figure 10 | Number of companies that have joined Science Based Targets

 

Source: SBTi (2020a)

More broadly, there has been growth in target-setting by the world’s largest companies, although many major corporations still lack a serious commitment to climate change. By 2019, only 23 percent of Fortune 500 companies had committed to carbon neutrality, using 100 percent renewable power, or meeting a science-based target by 2030 (Natural Capital Partners 2019). A 2019 expanded look at the world’s largest companies, including the Global Forbes 2000, shows that more than 450 companies, or just over 20 percent, have climate commitments (NewClimate Institute 2019).

Despite the flurry of commitments and regular reporting on climate performance by many, there are still limited data to assess progress toward targets, with many companies not fully disclosing their GHG emissions. Third-party analysis suggests that four-fifths of companies are not on track to meet the global 1.5°C goal by 2050 based on their current emissions intensity and sector-specific emissions projections (Arabesque 2020).

While corporate commitment to mitigating climate change is growing, the pace and scale of action is wholly inadequate. A small minority of the millions of companies worldwide are taking the lead. Of the roughly 7,000 companies that regularly report climate information, only around 875 are showing year-on-year emissions decreases. Despite their commitment, the level of ambition is often still below the effort needed to achieve the goals of the Paris Agreement. The majority of companies’ targets aim for roughly half of the ambition required by the Paris Agreement (e.g., aiming for 15 percent reductions instead of 30 percent for short-term targets, and only 50 percent reductions by 2050) (World Economic Forum 2019). Combined with a lack of transparency, including irregular and inconsistent reporting, in reality, companies may actually be doing very little to mitigate climate change.

Climate Finance

Total global flows of tracked public and private climate finance exceeded half a trillion dollars for the first time, averaged across 2017 and 2018, a 40 percent increase from the 2013–14 average (CPI 2019). However, even though climate finance has increased over recent years, estimates show that it falls far short of what will be needed.

Although carbon pricing currently covers around 15 percent of global greenhouse gas emissions, less than 5 percent of global emissions are priced at a level consistent with achieving the goals of the Paris Agreement (World Bank 2019; IPCC 2018). At the same time, fossil fuel subsidies are not being phased out fast enough (OECD and IEA 2019).

Despite a growing number of commitments, only around half of major private sector banks have sustainable finance commitments, and many are still investing more in fossil fuels than they are in sustainable finance, including those with commitments (WRI 2019; Pinchot and Christianson 2019).

Increasing climate finance is critical to tackling the climate crisis because large-scale investments are needed across sectors to decarbonize the economy and adapt to the impacts of climate change, through efforts like switching from fossil fuels to renewable energy, electrifying transport, protecting forests and coastal wetlands, and improving building efficiency. Climate finance flows have, on average, been increasing year over year, but they still fall short of what is needed to meet temperature goals under the Paris Agreement. At the same time, support for fossil fuels is not decreasing fast enough.

Total global flows of tracked public and private climate finance exceeded half a trillion dollars for the first time, averaged across 2017 and 2018, a 40 percent increase from the 2013–14 average (Figure 11). The majority of climate finance flows come from private actors and are directed toward renewable energy, low-carbon transport, and other mitigation activities. While climate finance has increased steadily over recent years, estimates indicate that between $1.6 trillion and $3.8 trillion per year will be needed through 2050 to transform the energy system, and an additional $280 billion to $500 billion will be needed annually for adaptation in developing countries by 2050 (CPI 2019).

Figure 11 | Tracked global climate finance flows

 

Source: CPI (2019).

Aside from total climate finance flows, a few other indicators help show where and how the finance sector is incorporating the risks of climate change and investing in its opportunities.

As an indicator of investment interest in climate-aligned projects, green bond issuance has been growing steadily, from less than $10 billion in 2012 to $258 billion in 2019, representing a more than 50 percent increase from the 2018 figure of $171 billion. While this represents significant growth, it is still a small portion of the global $100 trillion bond market.

Carbon pricing—either through a carbon tax or an emissions trading scheme (ETS)—currently covers around 15 percent of global greenhouse gas emissions. This coverage is expected to jump to 20 percent when China’s national ETS comes into effect, which could be as early as the end of 2020 (World Bank 2020; Xu and Stanway 2020). While the number of jurisdictions covered has been increasing, less than 5 percent of global emissions are priced at a level consistent with achieving the goals of the Paris Agreement, which the IPCC identifies as at least $135/tCO2e in 2030 and at least $245/tCO2e in 2050 (World Bank 2019; IPCC 2018).

At the same time, fossil fuel subsidies are not being phased out fast enough (Figure 12). Because around two-thirds of subsidies go to oil, volatility in global oil markets that may raise energy prices leaves recent reforms fragile (OECD and IEA 2019). More recent data from the International Energy Agency (IEA 2020f) on just consumption subsidies indicate lower subsidy values in 2019 and estimated for 2020, due in part to declining oil prices during the COVID-19 pandemic, which also provides a favorable environment to further reduce subsidies and solidify recent reductions.

While most policy changes may not be advancing at the speed needed, private sector action has picked up pace. The Task Force on Climate-Related Financial Disclosures, founded in late 2015, issued its recommendations for what types of climate-related information companies should include in their financial filings in 2017 to increase transparency around climate-related risks. Since then more than 930 organizations with a combined market capitalization of $11 trillion have signed on, but recent progress assessments show that disclosures are often still insufficient for investors (TCFD 2019).

Other notable commitments and announcements in the past year indicate that the financial sector is beginning to incorporate the impacts of climate change:

  • BlackRock became the largest signatory (with just under $7 trillion in assets under management) to join the Climate Action 100+, an investor initiative to ensure that corporate greenhouse gas emitters take necessary action on climate change.
  • The European Union pledged to become a net-zero emitter by 2050—a key objective of the Green Deal—and mobilize €1 trillion for sustainable investments over the coming decade (European Commission 2020a).
  • In recent months, the world’s foremost economic institutions, including the International Monetary Fund, the Bank for International Settlements (BIS), the Organisation for Economic Co-operation and Development, and major central banks, have advocated for policies to cut greenhouse gas emissions. The BIS—known as the central bank for central banks—warned that climate change could cause “potentially extremely financially disruptive events that could be behind the next systemic financial crisis” (Bolton et al. 2020).
  • The UN-convened Net-Zero Asset Owner Alliance, representing nearly $5 trillion in assets under management, committed to transitioning investment portfolios to net-zero GHG emissions by 2050 (UNEP FI 2019).
  • More than 50 financial institutions have committed to setting science-based targets under the Science Based Targets initiative’s new guidance for financial institutions (SBTi 2020b).

Despite a recent increase in the number of commitments, only around half of major private sector banks have sustainable finance commitments, and many are still investing more in fossil fuels than they are in sustainable finance, including those with commitments (WRI 2019; Pinchot and Christianson 2019). Overall, climate finance flows have been increasing in both the public and private sectors along with political commitment to aligning finance with climate objectives, but these changes are not happening fast enough to stay on a Paris-aligned trajectory.

Adaptation

Countries are increasingly prioritizing and advancing adaptation measures. One hundred thirty-six nationally determined contributions (NDCs) contain specific adaptation components (GCF 2018).

As of November 2019, at least 120 developing countries had undertaken efforts to formulate and implement national adaptation plans (NAPs).

As of 2018, 40 developed countries had reported on adaptation progress in their seventh national communications, and 25 of 28 EU member states had adopted a national adaptation strategy or national adaptation plan (Nachmany et al. 2019; European Commission 2018).

According to CPI’s 2019 study, international adaptation finance increased 35 percent from 2015–16 to 2017–18—to an annual average of US$30 billion from $22 billion—though it still accounts for just 5 percent of tracked climate finance (CPI 2019).

This section provides a snapshot of the state of global and national adaptation progress.8

The importance of adaptation

Recent statements and commitments by countries signal that adaptation action is critical. This is in part due to the impetus provided by the Paris Agreement. Scientific evidence also continues to mount on the importance of urgent and immediate adaptation action (IPCC 2018, 2019a). Moreover, as communities around the world experience the adverse impacts of climate change, there is also greater recognition that adaptation can help avert or reduce losses and damage associated with these impacts (with benefit-cost ratios ranging from 2:1 to 10:1, and in some cases are even higher) (GCA 2019).

  • One hundred thirty-six nationally determined contributions (NDCs) contain specific adaptation components (GCF 2018).
  • As of November 2019, at least 120 developing countries had undertaken efforts to formulate and implement national adaptation plans (NAPs), and all 49 least developed countries (LDCs) are working on submitting their first NAPs by the end of 2020 or soon after. Most countries are explicitly addressing adaptation through laws or policies.
  • As of 2018, 40 developed countries had reported on adaptation progress in their seventh national communications, and 25 of 28 EU member states had adopted a national adaptation strategy or national adaptation plan (Nachmany et al. 2019; European Commission 2018).
  • Furthermore, in 2019, more than 170 countries endorsed the 2019 UN Climate Action Summit’s Call for Action on Adaptation and Resilience, and the Global Commission on Adaptation (GCA), convened by the heads of state of 23 countries, spurred financial commitments and major initiatives to accelerate adaptation action and support.

The COVID-19 pandemic has also been a painful wake-up call, exposing the compound risks that people, especially the most vulnerable, face. There is recognition that taking action today to reduce, prepare for, and better manage risks—including those related to health, the economy, and climate change—is imperative (GCA 2020).

Emerging trends

Nationally determined contributions, one manner in which countries communicate their adaptation actions and commitments to the UNFCCC, offer insight into which sectors and issues developing-country governments are prioritizing. An analysis conducted by WRI for the Green Climate Fund in 2018 (GCF 2018) found that in the 136 NDCs that include an adaptation component, some identify priority sectors or describe general sector-level goals, while others describe specific activities within different sectors. About 85 percent of NDCs with adaptation components include agriculture as a priority area. More than 50 percent of NDCs with adaptation components mention freshwater supply, disaster reduction, forests, and ecosystems. More than 50 percent reference health. Less than a quarter of NDCs with adaptation components refer to gender-, women-, or gender-responsive approaches, and less than a fifth reference the rights and knowledge of Indigenous Peoples.

A 2018 analysis of EU member states’ national adaptation strategies and plans also underscores certain trends. All member states with a national adaptation strategy or plan have a basic governance structure in place for adaptation policymaking. Climate change scenarios are widely available at the national level. Most member states use detailed vulnerability and/or risk assessments to prioritize adaptation options. And while most member states have begun implementing their national adaptation strategies or plans and have planned periodic reviews, monitoring and reporting are limited.

A 2019 global review of national laws and policies in developed and developing countries (Nachmany et al. 2019) found that many countries now have legislative and policy frameworks that set priorities for adaptation action. The most common areas of focus are information generation and sharing, adaptation planning, establishing institutional arrangements, building capacity for adaptation, and processes for monitoring and evaluating action. Key enablers missing from many of these laws and policies include greater investment in public goods (beyond early warning systems), integration of climate risk considerations in building codes and land use planning, and incentives to facilitate adaptation action.

Progress on mainstreaming adaptation into economic and development sectors is uneven. A 2015 study by the International Institute for Sustainable Development (IISD) of 15 developing countries in Asia and Africa found that some were actively mainstreaming adaptation into policy and programming while others were not (IISD 2015). A 2018 review of more than 100 mainstreaming efforts in developed and developing countries found that while many had integrated adaptation into sectoral policy documents and plans, only half reported concrete projects and activities (Runhaar et al. 2018). And while major bilateral donors and multilateral development banks have put in place processes to screen whether programs and projects may be at risk of climate change impacts, it is still unclear how screening results are used to change what decisions are made and how they are made (Larsen et al. 2018).

Requests for support also offer insight into the state of adaptation. Requests from developing countries for support to advance their NAP processes have increased dramatically. As of April 2020, the Green Climate Fund had approved 50 proposals, with 6 more in the final stages of approval; these 56 proposals had a combined value of US$132 million (GCF 2020). As of March 2020, 52 percent of adaptation requests from member countries to the NDC Partnership focused on finance and investment, as identified through a Support Unit analysis of adaptation requests (NDCP forthcoming). Requests range from support in identifying incentives to attract the private sector and understanding the risks of climate change from a financial and macroeconomic perspective to support in analyzing costs and benefits of adaptation options and developing bankable projects. The NAP Global Network, based on the analysis of requests of NDC Partnership member countries, reports a consistent demand for support in developing sector strategies as well as financing and resource mobilization strategies, communications, and capacity extension. The network also reports an increase in demand for support of monitoring and evaluation, as countries become increasingly aware of the need to define and track adaptation progress and effectiveness, as well as of private sector engagement and gender-responsive adaptation action.

Barriers to adaptation action

Barriers to accelerated adaptation action remain, and these barriers are well documented. They include lack of data and understanding about climate risks and about what works and why, short-term planning biases, fragmented responsibilities, poor institutional cooperation, lack of resources, and the often-limited ability of people most at risk to shape decisions.

Adaptation finance

In the absence of a comprehensive global-level assessment of how much governments currently spend on adaptation, Oxford Policy Management examined in 2019 for the Global Commission on Adaptation (Allan et al. 2020) regional- and country-level spending assessments, including climate public expenditure and institutional reviews and climate financing frameworks. The report concluded that a significant volume of investment in adaptation is already coming from public domestic sources (in some cases exceeding that from international sources) and that this falls short of current and projected needs and domestic policy ambitions. The most common reason for this shortfall in the short term is that climate change adaptation competes with other development objectives, and decisions on how public funds are allocated, spent, and reported against do not adequately prioritize adaptation.

According to a 2019 study by the Climate Policy Institute (CPI), international adaptation finance increased 35 percent from 2015–16 to 2017–18—from an annual average of $22 billion to $30 billion—though it still accounts for just 5 percent of tracked climate finance (CPI 2019). Three sectors account for 78 percent of total adaptation finance annually: water and wastewater management (32 percent), agriculture and land use (24 percent), and disaster risk management (22 percent). Public finance for disaster risk management projects grew the fastest, increasing 128 percent, from an annual average of $2.9 billion in 2015–16 to $6.6 billion in 2017–18. Public finance for adaptation in agriculture, forestry, and land use also increased significantly, from $4.5 billion in 2015–16 to $7 billion in 2017–18. While increasing, these flows fall far below adaptation finance needs, which in developing countries alone are projected to be between $140 billion to $300 billion annually by 2030 (UNEP 2016).

Start reading