Adaptation Gap Report, 2025

Why in news?

Recently, the Adaptation Gap Report: Running on Empty, 2025 is released by UNEP.

• It reports about how international financial flows are failing to keep pace with accelerating climate impacts.
• Released by – UN Environment Programme (UNEP).
• It is released ahead of COP30 of UN Framework Convention on Climate Change (UNFCCC), held in Belem, Brazil next month.

Key findings

• Financial requirement – By 2035, developing countries will require $310-365 billion annually, nearly 12 times more than their currently gets from the developed countries.
• Disappointing new climate target – At COP-29, Baku, Azerbaijan, developed countries agreed to only $300 billion annually by 2035 (demand - nearly $1.3 trillion) - New Collective Quantified Goal (NCQG) on climate finance.
• However, this target is insufficient to meet adaptation needs alone, especially since the $300 billion figure is not adjusted for inflation.
• Decreasing support – International public adaptation finance from developed nations to developing countries fell from $28 billion in 2022 to $26 billion in 2023, exacerbating the funding gap.
• Missing the target – Target agreed upon by countries at the COP-26 in Glasgow - to double adaptation finance to $40 billion by 2025 - will be “missed”, if these declining trends continues.
• Debt-heavy climate finance – Most of the money currently available for climate adaptation is in the form of debt, not grants.
• In 2022–2023, 70% of international adaptation finance was concessional (low-interest/favorable terms), but 58% of total finance still came through debt instruments.
• Raised concerns –
  • About long-term affordability, equity,
  • Risk of an adaptation investment trap where rising climate disasters increase indebtedness, make it harder for countries to invest in adaptation.
  • Vulnerable countries like least developed countries & small island developing countries, which have contributed little to climate change but suffer its worst effects.
  • Non-concessional loans have now surpassed concessional ones, mainly affecting middle-income countries.
• Betrayal for vulnerable countries – For decades, the developing and vulnerable countries have their own adaptation plans (172 countries), but rich nations have largely failed to deliver their promises (finance flows decreasing last year).
• Role of the private sector – The private sector is not contributing enough, but with targeted policy action & blended finance solutions, its contribution could increase significantly, potentially reaching $50 billion per year.

References

1. The Hindu | UNEP’s Running on Empty report
2. UNEP |Adaptation Gap Report, 2025